The concept facility, which will include log-handling yards, bulk fuel storage, warehousing and export container yards, was unveiled by Regional Economic Development Minister Shane Jones.
At three kilometres in length it has been designed for trains up to 1.5 kilometres long – a 60% increase in length and capacity.
“A purposely designed facility to link rail and road together like this hasn’t been seen in New Zealand,” KiwiRail chief executive Greg Miller said.
“We are creating something world-class, which will support the growth of Manawatu’s logistics industry well into the future.”
KiwiRail announced its decision to relocate its Palmerston North operations out of the city in November. That month it got a $40 million commitment from the Government’s Provincial Growth Fund to help it develop a new facility to better handle rail freight through the lower North Island.
Miller said Palmerston North is already a critical distribution point with goods going to and from the upper North Island, Taranaki, South Island, Wellington and Hawke’s Bay.
The state-owned company is now working with local councils, iwi and other stakeholders to identify potential sites around the city for the hub.
KiwiRail expects to identify a preferred technical site before consulting the public early next year. Land use designation for rail will be sought after that.
Miller noted the $40m PGF is intended as the catalyst for the hub’s development. It covers the facility’s design, land purchase and the planning process to have the land designated for rail use.
KiwiRail’s yard in Palmerston North was established in 1964 on what was then the city’s northwestern outskirts. It has since become surrounded by urban development.
The city has since developed its Northeast Industrial Zone further north, near the existing rail line and the city’s airport.