Regional growth fund announcements made

The NZ Government has made an initial NZ$61.7 million down-payment on its promise to spend NZ$1 billion a year for the next three years on regional economic growth initiatives, with Cabinet papers signalling it will take three years for major projects to gain momentum.

Prime Minister Jacinda Ardern and Regional Economic Development Minister Shane Jones launched the Provincial Growth Fund at a ceremony in Gisborne on Friday, identifying for special attention six "surge" regions where efforts to accelerate regional growth are required and announcing a swag of funding for local road, rail, tourism infrastructure projects, along with feasibility studies for larger projects to follow.

While projects can be funded in any region, the surge regions were identified as Northland, Bay of Plenty, East Coast, Hawke's Bay, Manawatu-Whanganui, and the West Coast of the South Island.

Emblematic of the government's intention to unblock languishing regional projects is the decision to apply NZ$5 million from the fund to unblock the stalled initiative to reinstate the railway line between Napier and Wairoa, where a consortium of KiwiRail, Port of Napier, and the Hawkes Bay Regional Council had failed to move ahead after discovering higher capital costs for repairing the line than first anticipated.

The announcement was one of several amounting to NZ$9.2 million in commitments to the Gisborne and Hawke's Bay regions, which includes NZ$2.7 million for redevelopments at the Gisborne port, but does not at this stage mention any prospect of reopening the rail link between Gisborne and Wairoa, which was washed out in a storm in 2011.

Some NZ$750,000 is being granted for three feasibility studies on KiwiRail projects in Kawerau, Southland and New Plymouth, with the Kawerau study examining options for an inland hub to connect exports from Murapara and Kawerau to rail, while in Southland "KiwiRail will work with local forestry interests and ports to determine the best export flows for forestry and containers", said Jones in a statement. The New Plymouth study will focus on forestry export opportunities.

However, consideration of extending a rail connection to Whangarei's Northport, potentially as part of relocating Auckland's port to take it out of the city's central business district, will occur in the context of a wider Upper North Island Supply Chain study. KiwiRail has been asked to “put forward infrastructure proposals”.

“As of today, the Provincial Growth Fund (PGF) is open for business and has the potential to make a real difference to the people of provincial New Zealand,” said Jones.

Projects that contribute jobs in areas of high regional unemployment and to resilience in the face of climate change threats will be eligible, with the PGF to fund the plan for the government to plant half a billion trees over the next decade to complement another half billion to be planted by the private sector.

Source: BusinessDesk

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