Government funding advances next stage of Te Utanganui freight hub development

Government support of up to $22.4 million will help accelerate development of Te Utanganui – The Central New Zealand Distribution Hub in Manawatū, improving road, rail, air and port networks. 

The government loan to the Central Economic Development Agency (CEDA), approved through the Regional Infrastructure Fund (RIF), will support the next phase of planning and development for rail between Palmerston North Airport and Bunnythorpe, helping unlock one of New Zealand's most significant freight and logistics opportunities.  

The funding will be delivered in stages, with $1.9 million allocated to CEDA for pre-construction work, followed by $20.5 million for construction once a robust Business Case and delivery plan have been confirmed. 

The Business Case will inform what rail infrastructure needs to be built for the first stage of KiwiRail’s Regional Freight Hub, within the wider Te Utanganui precinct. 

Led by CEDA, in partnership with local councils, Iwi, KiwiRail and private sector partners, Te Utanganui is a nationally significant programme of infrastructure and industrial development that brings together road, rail, air and port connections to create Central New Zealand's leading distribution hub. 

CEDA Chief Executive Jerry Shearman says the funding is a major milestone for both the region and New Zealand's wider transport and logistics sector.  

"This investment provides the confidence needed to move forward with detailed planning and business case development for the first stage of the Regional Freight Hub.  

“Rail is a critical component of Te Utanganui and will help cement Manawatū as a strategic freight and distribution gateway for the country."  

Shearman says the project is already generating strong interest from industry and investors. 

"Alongside ongoing development at Palmerston North Airport, future industrial land opportunities in both Palmerston North city and Feilding, and work progressing on the business case for the Manawatū Regional Freight Ring Road, we're building the foundations for a nationally significant freight ecosystem.  

"Te Utanganui already includes more than 80 businesses across Palmerston North and Feilding and we are seeing interest from across New Zealand. We expect interest from private sector partners to grow as these catalyst projects progress.”  

The wider Te Utanganui programme is expected to unlock up to $1.5 billion in private investment over time, creating jobs during construction and supporting thousands of roles across logistics, manufacturing, warehousing and related industries as development continues.  

Te Utanganui is endorsed by 26 councils and regional councils across the central and lower North Island and continues to attract support from public and private sector partners committed to strengthening New Zealand's freight and supply chain resilience.  

Palmerston North Mayor Grant Smith says the funding demonstrates confidence in both the project and the region's growing role in New Zealand's freight network.  

"This funding is a timely boost for the continued expansion of Te Utanganui, and a real sign the Government backs its pivotal role in keeping New Zealand moving.  

 "Rail is a key part of the wider freight project, and its development will help drive business growth and new investment right across the lower North Island."  

Smith says Te Utanganui is already proving its value as a strategic freight and distribution location.  

"Te Utanganui is already one of New Zealand's key freight and distribution hubs. Right in the middle of the North Island, with major

road, rail and port links all on our doorstep, it's perfectly placed to move goods faster, smarter and more efficiently around the country.  

"The flow-on economic benefits from having a high-performing central rail hub will be felt at both a regional and national scale."  

Manawatū District Mayor Michael Ford says the district is already seeing significant demand for industrial and logistics land, particularly around Feilding and the Kawakawa Precinct.  

“The progression of the KiwiRail component strengthens the case for further investment and job creation across our district.”  

KiwiRail Executive General Manager Property Anna Allen says the loan to CEDA builds on earlier Government rail investment. 

“The full Regional Freight Hub is a long-term project, designed to cater for the central and lower North Island’s freight needs for many decades to come. 

“Since 2018 we have completed master-planning for the full hub, designated the land needed for the full hub footprint and purchased some land. 

“CEDA’s successful RIF application supports developing the first stage of the hub, which will enable greater use of rail and support regional growth.” 

Rangitāne o Manawatū and Ngāti Kauwhata view Te Utanganui as a significant development that will create enduring benefits for the region and for the future economic and social wellbeing of their people and the community. 

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