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But National says the announcement is a rehash of information released two years ago.
Laying out its 10-year plan for rail investment yesterday, the Government confirmed 100 jobs would be maintained at the South Dunedin workshop.
While there was nothing new for Hillside in the plan, the union representing rail workers was pleased the Government was showing its commitment to the future of the site.
In 2019 the Government pledged $19.97million towards the expansion and redevelopment of the workshop through the Provincial Growth Fund.
The rail plan said the work at Hillside would significantly improve safety, update the workshops, and mean more maintenance work on locomotives and wagons could be done in South Dunedin.
Several disused buildings at Hillside have already been demolished, and KiwiRail has previously said it hoped to redevelop the site as a South Island engineering centre of excellence.
Rail and Maritime Transport Union Otago branch secretary Dave Kearns said yesterday’s commitment was good news.
But he wanted to see investment in Hillside grow even further than what was in the plan at present.
"We’d like it to be bigger and bolder in terms of manufacturing," he said.
Dunedin National list MP Michael Woodhouse said there was nothing new in the plan.
"It’s really business as usual for Hillside," he said.
There was no indication in the plan of any further progress at the site, he said.
He was pleased KiwiRail funding was being folded into the New Zealand Land Transport Fund, something the union had been pushing for for many years.
Taieri MP Ingrid Leary said the signals for the future of Hillside were positive, although she did not know if any more funding was tagged for the workshop in the Budget, which would be released on May 20.
Rail was a crucial part of the Government’s transport plans, she said.