A new freight centre in Palmerston North is expected to provide spinoffs for Manawatū, bringing more business to the region.
The Provincial Growth Fund’s $40 million investment in KiwiRail for planning and buying land for the freight centre might be just the beginning, unlocking growth.
Spearhead Manawatū chief Craig Nash said the development would attract another $200m in investment into the facility, and create new business opportunities.
“It will have four times the productivity of the current site.
“The goal is to be the fastest and lowest-cost freight hub in New Zealand, that meets or exceeds best-in-the-world standards.”
A more efficient transport network, including a planned ring road around Palmerston North and replacement for the closed Manawatū Gorge route, would tie in with the freight centre as part of a broader transport hub.
There are already about 12,000 freight train services operating to, from, or through Palmerston North each year.
They carry a variety of freight, with pulp and timber accounting for 24 per cent of the 2.5 million tonnes that pass through.
Finished dairy products account for 19 per cent of the tonnage, with bulk wine, milk, meat and other produce making up the balance.
KiwiRail’s sales and commercial group manager Alan Piper said freight volumes were expected to increase by 60 per cent over the next three decades, and KiwiRail wants to secure or improve its share of the market.
Rail was two-thirds more fuel-efficient than road, with every wagon on the rails meaning one less long-distance truck on the roads.
But Piper said KiwiRail would work with the trucking firms on the project, as freight arriving or being loaded on the railway still needed to be delivered by road.
“We are not competing with trucks. It’s about how we work with road transport to create the most efficient distribution centre we can.”
Piper said moving from Tremaine Ave to a location near the airport would create new opportunities for businesses and industries that relied on a quick and efficient network for moving goods around New Zealand, and the lower North Island in particular.
The northeast industrial area was ideal as it was on the main trunk railway line and near the airport.
He said the Government’s injection would pay for planning and buying land.
“And then it’s up to us. Although it might not be us paying for the buildings.”
Nash said having KiwiRail and the New Zealand Transport Agency working together on distribution plans was vital to ensuring the planned regional freight ring road connected well to the new site.
It would make Palmerston North more attractive for a range of industries and manufacturers.
“It will be a major change for central New Zealand, and will unlock potential for companies to move here. It will be bringing the world closer to where we are.”