Provincial Growth Fund $40m for Palmerston North's preferred regional freight hub site

The preferred site for the regional rail freight hub between Palmerston North Airport and Bunnythorpe was announced this morning in Palmerston North.

Regional Economic Development Minister Shane Jones, Palmerston North Mayor Grant Smith, regional mayors, and MPs attended the announcement of the 2.5km long inter-modal freight hub.

Rangitāne iwi presided over the cultural pōwhiri.

Design, consenting, and acquisition of land for the regional freight hub is funded through a $40m investment from the Government's Provincial Growth Fund.

KiwiRail Group chief executive Greg Miller said he fully appreciated a project of this size represents a big change for the local community.

"That is why we want to work with the public as we finalise the design of the hub to ensure we have the right mitigations in place and any environmental impacts are minimised."

KiwiRail has contacted affected landowners and begins wider public consultation that will allow feedback on aspects of the hub footprint, and the mitigations it will be developing.

KiwiRail will be holding public meetings in and around Palmerston North in the weeks ahead.

The large gathering heard that the freight hub will have huge long-term benefits for Palmerston North and the wider Manawatū – with the ability to attract $2 to $4 billion of logistics investment into the area – while servicing the entire central and lower North Island.

"The hub will be New Zealand's first, truly world-class supply chain logistics precinct - including capacity for a log yard, bulk goods silo, container terminal (including free trade zone capability for exports), significant warehousing for freight partners, and KiwiRail's operations," Mr Miller said.

Mr Smith said the freight hub will integrate rail and road transport creating greater efficiency for moving goods between rail and road as well as taking advantage of the proximity to the airport, creating a fully integrated multi-modal rail, road and air hub – the only one of its kind in New Zealand.

"This is a significant investment into the city with long-term economic benefits for the region and New Zealand.

"The site will contribute substantially towards New Zealand's economic growth, connectivity, and resilience, and now more than ever we see the city's strategic importance in freight distribution, especially in an emergency."

"Integrating all of these services, on this scale, creates efficiencies and cost savings that will set the standard for New Zealand logistics and support the growth of Palmerston North as a distribution centre well into the future.

"Council, the wider region and all its key stakeholders are fully behind and supportive of KiwiRail's development," says Mr Smith.

"The city is eager to plan and contribute in consultation with KiwiRail, to enhance the KiwiRail offering to maximise benefits locally, regionally, across the lower North Island, and nationally.

"The city and the region have a cohesive vision and strategy focused on its natural advantages as a logistics hub, given our unique position with access to State Highway 1 and airfreight connectivity in adjacent developments.

"KiwiRail's development is a key part of that, but equally important is the regional freight Ring Road, which the New Zealand Transport Agency previously committed to delivering alongside the replacement Manawatū Gorge highway.

"With the freight hub now tangibly taking shape, we look forward to working with NZTA to advance the connecting Ring Road, to enable the realisation of the region's strategy, and unlock significant benefit not only for the region but also for the wider New Zealand economy.

Mr Smith said the freight hub will create over 300 jobs in Palmerston North.

"We're expecting it will unlock other significant opportunities for economic development, through more distribution and logistics companies relocating here, and an increase in associated trades and services to support them.

"These will lead to housing development and job security that will enhance Palmerston North as a secure and inviting place to live, work and invest.

"The city is already preparing council's long-term planning for this level of growth."

The expanding North East Industrial Zone on the main trunk railway line and near the Palmerston North Airport is designed to accommodate large-footprint industrial activities.

He said this is proving to be a destination of choice for distribution and logistics businesses in a unique multi-modal hub.

PNCC chief executive Heather Shotter said Palmerston North was on a trajectory of significant growth with other major projects in the City such as the Te Ahu a Tūranga – the Manawatū-Tararua Highway, Mercury Energy's Windfarm construction and record values in building consent.

"Following the Covid-19 pandemic, these labour and trades intensive developments will showcase Palmerston North as a leader in New Zealand's economic recovery.

"This development brings enormous long-term benefits to the wellbeing of the city and its residents which council fully supports.

"One of the benefits of moving more freight by rail is the alignment with our city's vision of reducing carbon emissions."

Mr Smith acknowledged the cooperation of those living within or near the proposed site, and the individuals and organisations who have assisted KiwiRail with their investigations into their preferred site.

Online consultation and more detail about the planned public meetings are available at:

https://www.kiwirail.co.nz/what-we-do/projects/regional-freight-hub/

KiwiRail will finalise the design of the regional freight hub and expects to begin the process to have the land designated for rail use, which is similar to a resource consent process, around September.