Government earmarks $6 million for Whanganui's port and rail

The Government has announced $3 million to upgrade Whanganui's rail line on top of $3 million for the port revitalisation.

Whanganui's first slice of the Government's Provincial Growth Fund will be a $6 million contribution to an upgrade of the port and rail line.

Regional Development Minister Shane Jones launched the $3 billion fund in Gisborne on Friday alongside Prime Minister Jacinda Ardern where just over $60 million was dished out in the first round of grants.

Subject to a business case stacking up, Whanganui will get $3 million for the port revitalisation, $3 million for an upgrade of the town's rail line and $90,000 to assist with further technical and design work on the port.

The port money was a Labour Party election promise first made by former leader Andrew Little in June last year.

In 2016 the former National-led Government put $500,000 towards a detailed blueprint of the redevelopment.

"Redevelopment of the port precinct is a significant step that will help bring in new businesses and rejuvenate the region," Mr Jones says.

"The goal is to create a more extensive area for value-added specialist manufacturing and make Whanganui an attractive investment prospect for marine and logistics-related industries. "

Mr Jones said the port expansion was expected to create 160 jobs while upgrading the rail line would support KiwiRail in moving the growing export volumes in the region, including dairy products and logs.

"KiwiRail estimates that each year the project will keep 6250 trucks off the road and 563 tonnes of carbon dioxide out of the atmosphere by enabling freight to travel by rail."

Regional Economic Development Minister Shane Jones was in Whanganui in December.

The money will support the Whanganui District Council's plans for the port and mayor Hamish McDouall, who was at the fund's launch in Gisborne, welcomed the news.

"It is contingent on a business case so that's the key. Hopefully that will release the cash."

Mr McDouall expected further money coming Whanganui's way in future funding rounds.

"I have no doubt ... I think there's bound to be more and there are several potential projects around Whanganui I'd like to explore with Mr Jones."

Tree planting was one.

"I can see a real opportunity there for local government, local business and iwi to stick their hands up."

Whanganui Chamber of Commerce chief executive Marianne Archibald said investment in the port was important for Whanganui.

"It's great to see investment in the regions and it'll help New Zealand to grow by helping the regions to grow."

The work is expected to take three years.