en.Wedoany.com Reported - The New Zealand government has approved NZ$22.4 million in funding to support the rail component of the planned large new freight hub, Te Utanganui, in Palmerston North.

Rail Minister Winston Peters and Regional Development Minister Shane Jones said the funding will advance the Bunnythorpe regional freight hub, one of three projects under the broader Te Utanganui multimodal freight plan.

The Regional Infrastructure Fund (RIF) loan will support pre-construction and construction phases of rail infrastructure designed to connect rail, road, air, and sea freight networks in the lower North Island.

Peters said the project will improve freight efficiency and strengthen regional supply chains. He described it as critical freight infrastructure that will leverage rail and road to boost efficiency, enhance supply chains, and drive economic growth in the lower North Island.

Peters also noted that the broader development still requires investment commitments from freight operators and port companies, but the government funding will allow the next phase to proceed while continuing to secure strategic land holdings.

The funding will be released in stages, with NZ$1.9 million allocated for pre-construction work and an additional NZ$20.5 million for construction, subject to approval of a detailed business case and delivery plan.

Jones said the government investment aims to de-risk the project for private investors. He noted that early-stage infrastructure costs are high and typically do not generate immediate revenue for investors. Through the RIF, the government helps mitigate risks for the broader project, giving private sector investors confidence to co-invest.

The project is led by the Central Economic Development Agency, in collaboration with local government, Māori tribes (iwi), KiwiRail, and private sector co-investors.

An estimated 100 to 300 jobs are expected to be created during the initial construction phase, while the broader Te Utanganui plan is projected to support thousands of jobs over time in logistics, manufacturing, and related industries.

Jones said the project will help unlock industrial land, improve freight network resilience, and support long-term economic growth in the lower North Island.