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Dunedin's mostly moribund Hillside workshops are about to be brought back to life with an almost $20 million injection of Government funds.
The Government has also announced $5.8 million of funding for a manufacturing agriculture technology business unit within Dunedin-based company Scott Technology and smaller amounts of funding for seven other projects.
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The Government announced today it is dedicating $19.97 million from its Provincial Growth Fund (PGF) to re-establish the Hillside workshop as a mechanical hub and heavy engineering facility to service KiwiRail's trains.
Regional development minister Shane Jones and trade and export minister David Parker made the announcement in Dunedin this morning ahead of further PGF announcements this afternoon.
Most work at Hillside ended in 2012, after KiwiRail awarded an estimated $29 million manufacturing contract to a Chinese company in what was a terminal blow to the workshops.
Bradken has used the foundry and luxury train company Antipodean Explorer has used space there to upgrade its carriages.
Mr Jones said today under the Labour-led Government rail was back on track and the days of managed decline were over.
"Hillside is the only heavy lifting rail facility in the South Island so it is vital to KiwiRail's business,'' Mr Jones said.
"The Coalition Government is investing more than a billion dollars in rail, including $300 million from the PGF in Budget 2019.
"It makes sense to ensure there are quality facilities available to support KiwiRail to maintain their trains and undertake a range of heavy maintenance and upgrade work.''
"We are providing $5.8 million towards the establishment of a dedicated manufacturing agriculture technology business unit within Dunedin-based company Scott Technology.
"This unit will be dedicated to automation solutions and services for New Zealand food processors, producers and their suppliers.''
The funding package also included nearly $500,000 for the Southland and Otago Regional Engineering Collective (SOREC).
Mr Parker said the funding would support the collective work that SOREC was doing to find ways to reinvigorate the sector.
"Both this and the seven other projects that received funding today will create a step change in productivity and efficiency, and lead to the development of 87 new permanent jobs in the region.''
The nine engineering projects funded:
- Southland and Otago Regional Engineering Collective ($495,000 over 3 years) towards establishment of the Collective to bring a coordinated approach across the sector to build capability and capacity.
- Scott Agritech ($5.8 million) for the establishment of a dedicated Agritech Business Unit to become a New Zealand-specific and customer-led supplier of automation solutions and services for mainly food processors.
- Petridish Ltd ($240,000) towards equipment and salaries for its 'Makerspace' area that allows manufacturing businesses to trial and test new, innovative products.
- United Machinists ($520,000) towards purchasing a specific piece of engineering equipment to accelerate the manufacturing of parts and products.
- Site Weld ($350,000) to purchase three pieces of engineering equipment for its fabrication, repair and maintenance services business, which services mining, industrial, heavy transport, marine and forestry sectors and is regularly involved in Health and Safety
- Farra Engineering Limited ($325,000) towards the installation of a Horizontal Floor Borer machine which will help complete maintenance work in shorter timeframes for several major South Island power generators.
- Bison Group Limited ($110,000) towards creating a demonstration space to showcase its products that lift and weigh shipping containers and for additional equipment.
- Red One Fabrication Limited ($93,000) towards a specific piece of engineering equipment to help this company, which is a leader in the innovation and design of Stainless Steel and Aluminium products for the Aviation industry, increase its output.
- KiwiRail Dunedin Hillside Workshops ($19.97m) to upgrade the two main workshop buildings, overhaul mechanical plant, to enable KiwiRail to increase the services it undertakes at Hillside.