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It learnt yesterday it had won a $39.9 million Government contract to build 17 passenger carriages for TranzScenic rail routes.
Last May, it signed a $63 million contract to rebuild 36 carriages for the Auckland commuter network.
The new contract was "awesome news" for Hillside's 195 staff, and for about 50 Otago companies which supplied components and services, Hillside site manager Kevin Kearney said yesterday.
Hillside, which has been operating since 1875, is a division of KiwiRail, now owned by the Government.
Its staff includes coach builders, fabricators, electricians, painters, joiners and administration staff.
Staff numbers would not be increased to cope with the second contract but Mr Kearney said the new contract would ensure continuity of work for existing staff.
It was also good news for the Dunedin companies and Dunedin branches of national organisations which supplied carriage components, he said.
They included engineering, electronics, electrical, joinery, signwriting and glazing firms, as well as those providing items such as steel, paint, fasteners, welding supplies, hydraulic supplies and safety gear.
Mr Kearney described the Tranzscenic carriages as "whizz-bang", high-specification units which required a particularly high level of finishing.
Work would begin in January, and staff would be occupied on both contracts all year.
As the Auckland carriages were completed, more time would be spent on the carriages.
The TranzScenic contract was expected to be completed in February or March 2011.
"The work loading in front of us is pretty remarkable for an engineering company.
"Most only have six months of confirmed orders ahead."
Hillside doubled its staff numbers to just under 200 in 2002-03 and since then had worked on improving the function and finish of carriages and increasing productivity to ensure pricing was competitive, Mr Kearney said.
"We've built over 100 carriages since 2004 . . . and created a niche market for ourselves in New Zealand.
Our success is based on the guys' efforts and the quality of the product we produce."
Hillside's contract was part of a $115 million spending package announced yesterday by Infrastructure Minister Bill English.
The remaining $75 million will be spent buying 20 locomotives from China to be used on key freight routes and to free up other stock for Auckland commuter routes.
Mr Kearney said there was no company with the expertise or experience to manufacture them in New Zealand.