Accelerate 25: Draft Manawatu-Whanganui Economic Growth Action Plan Enabler Transport

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1 Accelerate 25: Draft Manawatu-Whanganui Economic Growth Action Plan Enabler Transport KEY INVESTMENT OPPORTUNITY: Palmerston North - Manawatu Regional Ring Road GOAL: To better enable economic growth and productivity through targeted transport investment into the Manawatu-Palmerston North Regional Ring Road, with specific emphasis on the vision of doubling agribusiness exports from $1.9 Billion to $3.8 Billion by INTRODUCTION Infrastructure to enable connection between people, goods, services and markets is critical to the realisation of this goal. The Government s strategic direction for land transport is to pursue improved performance from the land transport system by focusing on three core priorities: Economic growth and productivity [emphasis added] Road safety Value for money We believe without a doubt that by investing in the Manawatu-Palmerston North Regional Ring Road, we will achieve significant growth and economic productivity. This is not limited to growth for the Manawatu-Whanganui region, but growth for the betterment of the entire country. This paper has been prepared to highlight and demonstrate a strong case for immediate investment into the Regional Ring Road. The paper has been delivered in three parts. 1. An overview of where the Manawatu-Whanganui region fits within the wider North Island freight context, in particular its hubbing potential given existing and future freight volumes transported; 2. A description of the hubbing areas in and around the Palmerston North and Manawatu districts and how the Regional Ring Road will unlock the true hubbing potential for the central and lower North Island; and 3. A break down of the costs and benefits of investing in the Regional Ring Road network, in particular the benefits for the regional and national economy. PART 1: MANAWATU-WHANGANUI REGIONAL CONTEXT Strengths 1. Is geographically located between three key ports (Taranaki, Wellington, Hawkes Bay).

2 2. Is a natural freight hubbing area from which to distribute freight to and from the rest of the North Island (Freight often has to pass through our region on route to other areas). 3. Has substantially more freight being moved by road and rail than the Taranaki, Wellington and Hawkes Bay Regions The Region contains 18% of all Class 1 soils and 14% of all Class 2 soils in New Zealand, considered to be the most versatile soils for agriculture and horticulture and there is potential for further growth around the use of these soils. Figure 1: Central New Zealand Key Freight Nodes The regional economy is largely based on the production of primary industries, and because of this, the region s economy is heavily dependent on a reliable land transport network in transporting product from its point of origin to its destination. A large proportion of the region s primary product eventually makes its way out of the region for either export overseas or to be redistributed to other parts of New Zealand. Palmerston North and Manawatu are now recognised as the center of the growing freight distribution industry because of its location in the central-lower North Island, connected to the surrounding regions of Taranaki, Hawkes Bay, Waikato and Wellington via the State Highway, rail and air networks. The National Freight Demand Study 2014 provides a snapshot of New Zealand s current freight task and a forecast of what it will look like over the next 30 years and identifies the Taranaki, 1 Map of lower north island showing Key Freight Nodes

3 Hawkes Bay and Wellington regions as the key origin-destinations in moving freight efficiently and effectively through and around the region. The importance of having efficient and resilient transport connections to the northwest, south and east of this growing hubbing area cannot be overstated. Palmerston North has become an important freight distribution center, providing the primary sector with good road and rail transport routes to markets. In fact, Palmerston North has superseded Wellington in importance as a distribution center. Reasons for this are: 1. Palmerston North has become a key staging point for high value imported and domestic freight between Auckland and Wellington or between Auckland and the South Island. 2. Palmerston North has good access to hinterlands that produce New Zealand export commodities and provides the staging point for export of these out of the ports in Napier, New Plymouth and Wellington, or even Auckland and Tauranga. In particular, it is the staging point between Fonterra output from the Whareroa plant in Hawera and export ports in Napier, Tauranga and Auckland. 3. Palmerston North s health, retail, education, defence, freight distribution and logistics sectors have been key growth areas in the city. Logistics earnings in the city increased 119% between 2000 and 2013, strongly ahead of the 74% increase in the national logistics sector earnings (Statistics New Zealand). Major distributing centres based in the city that have contributed to this growth include Toyota New Zealand, Ezibuy Ltd, Foodstuffs New Zealand and Countdown. 2 PART 2: MANAWATU AND PALMERSTON NORTH HUBBING AREAS AND REGIONAL RING ROAD The Joint Transport Study (JTS) is a key evidence based 30 year strategy for the development and management of a strategic transport network, in and around Palmerston North and Feilding and the wider Manawatu area. The outcomes and works of the JTS have been included within the new Regional Land Transport Plan Contained within the JTS is a Regional Ring Road route which fully encompasses Palmerston North and provides strong connections to Feilding to the north, Pahiatua to the south and industries that they harbour. The Regional Ring Road also provides fluid connectivity with State Highway 3 to the northwest (Taranaki), State Highway 1 to the south (Wellington) and State Highway 2 to the east (Hawkes Bay). The functional idea is to allow heavy vehicles to more quickly travel from an industrial node to a State Highway by using a well developed connecting ring road. A map of the Regional Ring Road in relation to the Manawatu and Palmerston North districts and State Highways is shown in Figure 2. The images in this section show the industrial nodes along each section of the Regional Ring Road, as well as the key vehicle and freight movements. The maps have been provided to show the key industrial nosed and how the flow of freight traffic will connect with the Regional Ring Road (abbreviated as the primary collector route), and ultimately the State Highway network. 2 Integrated Transport Strategy for Palmerston North November 2015.

4 Figure 2: Regional Ring Road The provision of greater accessibility to key surrounding ports is a strategic advantage of the Regional Ring Road. The regional ring road also provides good connectivity with the North Island Main Trunk Line which runs through Feilding, Palmerston North and Longburn (essentially alongside the industrial nodes), and also with the Palmerston North Regional Airport. A number of key arterial routes in urban areas are experiencing congestion at peak times, in particular Tremaine Avenue in Palmerston North. While impacting poorly on the freight distribution through increased travel times and cost, it also has social impacts through reduced safety, increased driver frustration and increased burden on lower quality roads used as alternatives routes. Key Hubbing Areas in the Manawatu and Palmerston North Districts Within the Palmerston North and Manawatu Districts there are a number of key industrial areas that will contribute to growth. These are: 1. North East Industrial Zone (NEIZ) This is an area at Railway Road, Palmerston North, which largely supports freight and distribution activities (Foodstuffs, EziBuy). An existing 100 hectares of land is under development and will connect to the Regional Ring Road to serve as a distribution and warehouse centre for the Lower North Island. A proposed rezoning of a further 126 hectares of land from rural to industrial will expand the existing industrial area, extending it beyond Richardsons Line, and including a further area between Roberts

5 Line and Railway Road. This will provide additional land for large floor plate industrial activities, such as logistics, transport and warehousing. The NEIZ is located adjacent to the Palmerston North Airport which plays a critical, strategic role as the gateway to central New Zealand facilitating air traffic flows from and to the Manawatu, Ruapehu, Rangitikei, Whanganui, Tararua and Horowhenua districts and beyond. Palmerston North Airport s 24 hour, seven day operating capability, combined with our geographic location, provides a comparative advantage for the further development of airfreight and associated support operations. Already a strategic base for Freightways and NZ Post, Palmerston North Airport Limited continues to actively pursue opportunities to grow the airfreight/logistics footprint. 2. Longburn and Braeburn Areas Longburns proximity to State Highway 56 and the North Island Main Trunk Line makes it suitable as an industrial growth node with strong opportunities for greater road/rail integration and connectivity. It is identified for future wet industry including dairy related activity and general industrial development (including freight and distribution activities), and is currently serviced by an existing industrial area and the Fonterra (Braeburn) site.

6 3. Kawakawa Industrial Park An area located south of Feilding around Turners Road through to Kawakawa Road. Existing industrial zoned land will be expanded to attract primary industry processing activities (meat processing plants, rendering operations, farming products suppliers). A number of these industries exist in this area and there is significant opportunity to attract further investment.

7 4. FoodHQ Innovation Campus Adding value to food exports through food innovation is a growing part of the regional economy and will be a key enabler of regional growth into the future. Key to this is the FoodHQ collaboration based at Massey University in Palmerston North. Plans are in place to merge the current Massey University campus with the Fitzherbert Science Centre to create a super campus. This will mean that the current high speed environment of Tennent Drive may be replaced with a high quality urban environment designed for both people and motor vehicles that will enable economic growth.

8 PART 3: COSTS AND BENEFITS OF REGIONAL RING ROAD TO REGIONAL AND NATIONAL ECONOMY. Below the Regional Ring Road projects are shown in light of their cost to fully implement, the benefits they will provide, both socially and economically, and their contribution to the country s GDP. Regional Ring Road Projects Priority Projects Current Construction Year (Planned) Indicative Cost ($M) Approximate Construction Year (Vision 3 ) Safety Benefits Productivity Benefits 1 Kairanga to Bunnythorpe 1-3 $22M 1 3 The social Bunnythorpe Bypasses 3-6 $25M 2 Ashhurst to 3-6 $18M 3 6 Bunnythorpe No 1 Line/Rongotea 6-9 $26M Road to Longburn Manawatu River bridge $90M importance of vehicles out of our cities and urban areas. Safer connectivity between Feilding and Palmerston North The Regional Ring Road will contribute significantly to the goal of doubling agribusiness exports from $1.9 Billion to $3.8 Billion by Without external funding this vision will not be attainable. 3 Based on ratepayer and NZ Transport Agency funding alone, it will not be achievable to have these projects funded/completed until the dates shown in the Current Construction Year (Planned) column.

9 Benefits The improvements along the Kairanga to Bunnythorpe corridor are the most critical to enabling growth and should be completed first due to the strategic location of the industrial areas it serves. Existing land uses are currently dependent on moving through urban corridors, for example, Tremaine Avenue, which are under pressure, rather than utilising the ring road network as it is not up to standard. There are immediate benefits to be realised from unlocking this area. Given that the NEIZ Zone is the largest industrial park in the region, and will serve as the main distribution and logistics centre, the development of this strategic corridor will enable heavy vehicles to fluidly travel north, northwest, south and east to the surrounding key port destinations. Currently it is poorly serviced by poor carriageway widths, stop controlled intersections, and an inadequate supporting road hierarchy which requires a number of turning movements. As a result drivers take alternative routes, often through residential areas increasing potential economic and social costs. The ideal would be to construct the necessary bypasses at Bunnythorpe, and high speed roundabouts at key intersections to facilitate efficient movements. Following the Kairanga to Bunnythorpe corridor, it is considered that the Bunnythorpe bypasses are of similar importance and so have been earmarked for completion in the same three year period due to their strategic location to the key industrial areas they support. For the Bunnythorpe bypasses, providing a key connection between Feilding and Palmerston North will also provide for residential growth and better social connectedness. The completion of these projects will provide for freight movements north and east of the key hubbing areas. The No.1 Line/Rongotea Road to Longburn improvements (western link) and the Ashhurst to Bunnythorpe corridor (eastern link) have been grouped together as the second most important package of works. These complete the eastern and western linkages of the regional ring road around Palmerston North and therefore better enable freight movement east, west and south to key port destinations. The Manawatu River bridge crossing has also been grouped in the second block of priorities as this will complete the regional ring road connections to the south and will provide good connections to the Defence Force, Massey University and FoodHQ campuses.