A rail hub dedicated to handling and transporting logs from around the lower North Island is to be built in Marton and receive $9.1 million from the $3 billion set aside in the Government's Covid-19 Response and Recovery Fund.
"Marton is central to significant forests in Rangitīkei, Manawatū and Horowhenua regions that are mature and will continue to produce mature trees and increased volumes for the next 15 years," Infrastructure Minister Shane Jones said.
"It is also a key service town for agriculture in the area, making it a good location for a freight hub."
Rangitīkei mayor Andy Watson has welcomed the announcement, saying after being involved in the project for the last three years, he is thrilled to get it over the line.
"This is a game-changer for our district, our district was built really partly on being the centre for the rail hub for the North Island and to be able to go back to that sort of status is fantastic.
"It is dependent on resource consent so we have a district plan announcement which will be due in the next few days, but if we don't get that district plan decision through I'm sure we will look at alternatives."
He said if the district plan decision goes through, the hub will be built on land parallel with the existing rail network between malting company Malteurop and State Highway 1.
Jones said the rail hub will not only attract more commercial developments to the immediate area, it will also take freight trucks off the roads.
"Parts of this region are deprived, with few options for economic development. This construction project will benefit the building and associated industries, boosting the local economy and keeping people in jobs. It also provides potential for the region to diversify and boost the local economy."
The Rangitīkei District Council has estimated that this build, which will include a debarker facility, will create up to 83 jobs.
Watson said those jobs are for the direct rail link and on top of that there are industries that want to come to the district that could potentially lead to hundreds of jobs.
"We've got a fair degree of surety that we've got companies that want to be here and set up and the rail junction is really the link that makes that possible."
There had been a lot of discussion around bio-forestry and the possibility of getting a conventional sawmill and possibly a plywood mill and a production system that takes wood waste and converts it to PLA (polylactic acid), Watson said.
Many of the jobs and industries are world-leading with high-paid jobs which Watson hopes will attract more people to the Rangitīkei district.
"It's another piece in the jigsaw in moving our district forward."
Watson did not want to comment on the exact cost of the build as it would have different stages.
The first stage will require construction of a road off Makirikiri Rd and rail sidings, with council working with KiwiRail.
"There is a lot of private money that gets put up in addition to the governmental money so it's a very big project."
In July, Jones announced the Government would invest $40m from the Provincial Growth Fund to buy land to build a 2.5km long road-rail centre between Palmerston North Airport and Bunnythorpe.
Watson said that hub was not designed to handle a huge amount of forestry, meaning the Rangitīkei rail hub would have a different function.
"There are reasons why forestry and industry want to come to Marton - in terms of forestry it is that we have the trees."