Council backs terminal in Tokoroa
South Waikato District Council has resolved to back the development of a road/rail freight terminal in Tokoroa. The project is $2.5 million dollar investment.
The development will be in partnership with KiwiRail, New Zealand Transport Agency (NZTA) RJ Lincoln Logistics (RJL) and other potential investors. The decision comes after almost six months of intense investigation on the economic viability and long term sustainability of the concept.
The rail siding will allow direct road/rail container loading and unloading; making Tokoroa a key distribution centre. The development will generate transport and storage business opportunities, encourage new business, provide employment opportunity and deliver an efficient freight solution that reduces the cost of doing business.
The $2.5million estimated cost excludes RJL's significant contribution of 'gifted' land for the access road and container load and unloading area and $1million for equipment to be used for loading and unloading containers from the rail.
The Council-committed funding will be broken into $770,000 from the $5 million economic and community investment funding that was recently consulted on, $500,000 from the newly developed DRIVE Trust and $1 million from increases in the market value of Council's SWIF investment over the past year. Some funding is planned to be received from external agencies. No funding is proposed to come from the $20 million that Council recently handed over to the South Waikato Investment Fund (SWIF) Trust.
"The development of this project fits perfectly with Council's two strategic objectives of economic development (more jobs) and district promotion," said His Worship the Mayor Neil Sinclair. "It also fits with on-going work around the long term concept to develop Tokoroa as a freight distribution hub for the immediate and surrounding districts using a rail/road terminal for the primary industries of farming, forestry and power generation and associated secondary manufacturing and engineering industries."
"Our community has a 10% unemployment rate, well above the national average. In an attempt to make our community more economically vibrant and less reliant on government services we need to focus on the real opportunities we have in our district that will create jobs and boost further economic development," continued Mayor Sinclair. "We believe a road/rail terminal is an excellent way to do this." Ends: words 364
What is it? The road/rail terminal terminal includes developing a rail siding, hardstand, local road connection and a container loading and unloading area. The facility will be available for all existing and new businesses to use. RJL will provide land and equipment and run the operation under an access and handling contract with South Waikato District Council, probably via the economic development trust Council has recently established.
Why Tokoroa? RJL operates a transport and bulk storage operation in Tokoroa using a rail facility at Kinleith. Due to the growth of freight volumes the current operation has outgrown this facility and needs to relocate to Tokoroa to remain efficient, reduce costs and handle further volume growth. The success of the rail siding at Kinleith provides proof that a freight and storage road/rail hub will work in the South Waikato. It has already shown that there is potential for growth if a full public terminal in Tokoroa was developed with a number of other parties interested in being involved.
Who are the project stakeholders? Council has strong support from the key stakeholders: RJL, KiwiRail, New Zealand Transport Agency (NZTA), Port of Tauranga and the local business community. All stakeholders believe that it will provide not only local South Waikato benefit, but positive regional economic development opportunities too. Nationally it may not be a major project, but for the South Waikato it would provide big opportunities.
Why will it work? There is extremely strong support for existing and new business development resulting from the construction of a road/rail terminal.
- Over the next three years, container handling is forecast to increase from 2,600 to 4,750 TEUs (standard container size for a ship)
- The move to a road/rail solution is expected to reduce road transport kilometres by 850,000 km annually. Over time, as the number of truck kilometres reduces, the number of accidents on our roads will reduce, especially between Tokoroa and the Port of Tauranga.
- It is estimated that KiwiRail revenue will increase by $1million annually.
- The project is forecast to create well in excess of 30 new jobs for the district in the next few years.
- The improved transport connection to the Port of Tauranga, along with the changing economic makeup of the district, is also expected to be the driver for new industry (such as for dairy processing) to consider Tokoroa as a viable location given our central location and key road/rail links.It will provide much needed new opportunity for economic growth in one of the district's key areas of opportunity - the development of a logistics hub for dairy, forestry and engineering. This will capitalise on the district's strategic advantages of central location for farming and forestry, access to State Highway 1 and rail, low cost and available industrial land, proximity to ports, a thriving and innovative engineering sector and a willing and business-friendly Council.What are the project's key objectives?
- Provide Tokoroa with a road/rail intermodal terminal to allow a direct rail link to and from the Port of Tauranga, with loading and unloading to and from road to provide local road access to businesses in and around Tokoroa.
- Generate economic activity, and therefore employment, for the South Waikato, from the development of a road/rail terminal, through:
- additional transport and storage network connection opportunities for new and existing businesses
- more efficient freight transport and storage for users
- targeted development of specific businesses that are looking to use rail transport eg milk processing.
- Provide viable solutions and choices for industry to manage the increase in New Zealand's freight requirements by making better use of existing network infrastructure so that efficient freighting decisions can be made.