Tainui's superhub titan set to supercharge New Zealand economy

Hamish Lile​ has the sort of job that fuels young children's sandpit dreams.

A simple retelling of Lile's workday would say he's often tasked with moving big piles of dirt from one place to another.

On this day, the dirt in question is preload soil used to prepare a building site. As the pile of dirt grows, it compresses the ground underneath, replicating the weight of the soon-to-be-built structure.

Lile makes the task look deceptively easy as he shifts up to 18 cubic metres of sandy soil at a time with the aid of a 40-tonne dump truck. Yet Lile’s eyes – orbs of green seaglass – hint at the concentration required to operate the enormous machine as they flick between the dump truck's many mirrors, his controls, and the immediate surrounds.

Lile is one of more than a dozen staff from earth moving contractors C & R Developments operating what appear to be outsized Tonka toys across the earthy expanse on this Wednesday morning.

Bulk earthworks at the 92-hectare site on Hamilton’s eastern fringe started in January, the first stage in a $3 billion-plus development named the Ruakura Superhub.

The Ruakura Superhub site is on Hamilton's eastern fringe. The hub will be bigger than Auckland’s CBD once fully developed. Image: CHRISTEL YARDLEY/STUFF

The superhub is situated in a proverbial sweet spot, intersected by the East Coast Main Trunk line and bordered by the soon-to-be-completed Waikato Expressway. Its underlying ambition is to transform the movement of freight in the upper North Island and, in the process, generate major productivity gains for the country. It's also located in the middle of the golden triangle - a term favoured by politicians and economists to refer to the area encompassing Auckland, Hamilton and Tauranga.

Once fully developed, the superhub will take in 490ha – larger than Auckland’s CBD – and support 6000 -12,000 jobs, many of them highly skilled.

But the purpose and significance of Ruakura can’t be measured solely in economic outputs, or captured by financial spreadsheets. The story of Ruakura, at its heart, is about the people of Waikato-Tainui, their collective will to restore and rebuild what was taken, and their drive to leave future generations better off.

Hamish Lile behind the controls of a 40-tonne dump truck. Image: CHRISTEL YARDLEY/STUFF

‘It’s part of our DNA’

The Ruakura Superhub is part of a 605ha block of land returned to Waikato-Tainui as part of its Treaty of Waitangi raupatu (confiscation) settlement in 1995. The settlement, valued at $170 million, included the return of land, cash, interest, and a relativity clause. The Crown also issued an apology to the tribe, acknowledging past wrongdoings.

The negotiations were led by the late Sir Robert Mahuta​ who, like others, appreciated the settlement was a significant compromise - with the returned land representing a small fraction of what was taken by the settler government.

"People criticised us for settling for nigh on 3 per cent of the real value of the lands taken, but ... we needed to move out of grievance mode and into development mode," says Rahui Papa,​ who serves as Waikato-Tainui's current-day lead negotiator.

A straddle carrier manoeuvres past rows of containers at the Port of Tauranga.  Image: CHRISTEL YARDLEY/STUFF

"And to move into development mode we actually needed something, so we accepted that with the promise that the development would ensue."

The word Ruakura has two meanings. One refers to when you dig a hole, a rua, and come across the red parts of the earth. The other meaning refers to the coming together of two chiefs and their red plumes. Rua means two and kura are the plumes of a chief.

Traditionally, Ruakura acted as a place where Ngāti Wairere and Ngāti Hauā would come together, talk, and resolve any inter-tribal issues, Papa explains.

"So it [Ruakura] was a hub traditionally, and now it's moving to become a commercial hub."

The superhub site is bordered by the soon-to-be-completed Hamilton section of the Waikato Expressway.  Image: CHRISTEL YARDLEY/STUFF

The development of Ruakura builds on the extensive property portfolio of Tainui Group Holdings (TGH), the commercial arm of Waikato-Tainui. Its developments include New Zealand's largest shopping centre The Base in north Hamilton, Novotel Hamilton Tainui hotel, Novotel Auckland Airport hotel and the under-construction ACC building in central Hamilton.

Each build a success story in its own right.

Yet economic success is nothing new to Waikato-Tainui.

Before the confiscation of its lands in the 1860s, the tribe was regarded as a powerhouse in trade and enterprise. Its people traded in commodities such as flour, wheat and flax, and were involved in rope making and animal husbandry.

Commercial enterprise is part of Waikato-Tainui's DNA, says Rahui Papa.  Image: CHRISTEL YARDLEY/STUFF

"In 1863, with the wave of a quill pen, called the raupatu or the confiscation, that was a decimation of not only our cultural selves but our commercial opportunities as well," Papa says.

"But the commercial part of the Waikato-Tainui psyche has never been forgotten, it's part of our DNA."

A project of national significance

The Ruakura Superhub is anchored by an inland port situated next to the East Coast Main Trunk line and is expected to start operating by mid-2022. Stage one of the superhub development will see the inland port cover 9ha but will grow to 17ha. Ultimately, the port will cover 30ha. Two 800m rail sidings will be constructed at the inland port, allowing the site to accommodate the longest trains on the track. With future expansion, the inland port will be able to accommodate trains up to 1400m long.

Stage one of the development also includes a 35ha logistics zone, a 25ha industrial zone, a service centre alongside the Waikato Expressway, and a 10ha wetland.

Ruakura Superhub's inland port will be developed in stages.   Image: CHRISTEL YARDLEY/STUFF

The superhub's first tenant, PBT Express Freight Network,​ expects to be operating on-site by August, 2022. It's anticipated the superhub's warehouses will make use of automation, including fully automated operations such as dark warehouses.

Inland ports as a concept have grown globally over the past 20 years and complement seaports constrained by geography. Facilities such as cool stores can be relocated to inland ports, freeing up land at seaports for containers. Stevedore activities can also be moved to inland ports.

In 2020, TGH and Port of Tauranga agreed to a 50:50 joint venture to develop the inland port. Ruakura will deal exclusively with containerised freight.

The Ruakura Superhub will bring major importers and exporters together at one location, says TGH chief executive Chris Joblin.  Image: CHRISTEL YARDLEY/STUFF

One of the biggest selling points of Ruakura is its ability to bring the import and export supply chains together in one spot.

"Ruakura, at its core, is about the economics of empty containers," says Chris Joblin,​ chief executive of Tainui Group Holdings.

A common scenario is for imported containers to come into Auckland and then get sent to South Auckland and unloaded at various distribution centres. Many of those containers eventually find their way down to Waikato via road, rail or sea.

"If you think about the movement of all those containers, more often than not they are empty because they're getting repositioned to where the goods are," Joblin says.

Stage 1 of the superhub covers 92ha. The project will eventually cover 490ha.  Image: CHRISTEL YARDLEY/STUFF

“Whereas, if you have all the importers and exporters in one place, there's no need to do all that repositioning of equipment. So that creates a huge cost saving."

TGH estimates the superhub, once fully developed, will generate about $1 billion in productivity gains a year for the country's economy.

While the Covid-19 pandemic has placed constraints on global supply chains, it's also strengthened the importance of the superhub venture. Strategic reviews by companies point to the benefits of building distribution centres at scale near rail lines with direct access back to seaports.

"So what that has meant is that you've just seen Ruakura really accelerate from both a demand point of view and an understanding of the benefits that Ruakura will unlock for the customers and users of the site," Joblin says.

TGH is developing the inland port at Ruakura in partnership with the Port of Tauranga.  Image: CHRISTEL YARDLEY/STUFF

The superhub was first envisaged as a 30-year project but could now reach full development in 15 to 20 years. Driving tenant demand is development pressures and land shortages in Auckland, a move to e-commerce models, and a need for importers and exporters to resolve supply-chain issues.

Port of Tauranga chief executive Leonard Sampson​ says the Ruakura Superhub will benefit the seaport by staging and aggregating cargo before feeding it through to Tauranga. Like Joblin, Sampson says reducing the movement of empty containers around the North Island will generate significant benefits.

“The aspirations are to have large-scale importers located at Ruakura where containers are railed directly into the superhub. These containers then become empty and available for large-scale exporters that will be on site. Essentially, what it means is you'll remove the need for repositioning of empty containers out of Auckland.”

Port of Tauranga chief executive Leonard Sampson says the Ruakura Superhub will help aggregate cargo before it's transported to the seaport.   Image: CHRISTEL YARDLEY/STUFF

In 2019, TGH and the Port of Tauranga announced a rail services agreementto service the inland port with 80-plus trains a week operating between Tauranga and Auckland.

Visiting the tightly secured Port of Tauranga gives an insight into how Ruakura will eventually operate. Amongst the 24-7 bustle, straddle carriers shift and position freight containers. Full containers are stacked three high, while empty containers are piled eight high.

Greg Miller,​ chief executive of KiwiRail, says the Ruakura Superhub is another enterprise that complements the use of rail. Transporting freight by rail reduces road congestion, and aids the Government's goal of reducing carbon emissions. Once fully developed, the superhub is forecast to take 65,000 truck movements off the road each year.

The vision

A host of politicians have visited the superhub site ahead of its mid-2022 opening. Finance Minister Grant Robertson​ toured the site in May and predicts Ruakura will become a hub for the movement of freight in the upper North Island.

The location of the inland port next to the rail line and the Waikato Expressway is "absolutely perfect", especially given the constraints faced by the existing seaports, Robertson says.

"You've got the inland port that's going to be significant for New Zealand ... and obviously if we can get the inland port working with the rail line, then we're taking trucks off the road and that's good for our carbon emissions [and] good for people's productivity."

Finance Minister Grant Robertson is given a guided tour of the superhub site by TGH chief executive Chris Joblin, left.  Image: CHRISTEL YARDLEY/STUFF

The person credited with the idea of an inland port at Ruakura is Mike Pohio,​ former chief executive of TGH. Pohio joined the organisation from the Port of Tauranga where he was the container terminal manager. He also had oversight of the inland port at MetroPort Auckland.

Pohio's background expertise, his understanding of the capacity constraints faced by the seaports at Auckland and Tauranga, and the location of Ruakura and its large size, fed his vision of an inland port.

Another crucial factor in Pohio's thinking was the directive given to him by Waikato-Tainui, discouraging the land at Ruakura being developed and sold.

Former TGH chief executive Mike Pohio is credited with the idea of creating an inland port at Ruakura

"From my early days at TGH I got a very clear message from the tribe that developing and holding the land was a strong preference," he recalls.

Pohio says it's affirming that government ministers are supportive of the superhub project, but it wasn't always the way.

In June 2013, TGH in partnership with Chedworth Properties submitted an application requesting a change to Hamilton's district plan in relation to the proposed Ruakura development. Amy Adams,​ then environment minister, declared the plan change request a project of national significance and referred it to an independent board of inquiry. The board approved the plan change in 2014 and resource consents were granted by the Hamilton City Council and Waikato Regional Council in 2016.

New Zealand's standard of living relies on an efficient supply chain, says Mike Pohio.  Image: CHRISTEL YARDLEY/STUFF

Pohio says it's regrettable the request had to go through a board of inquiry process, but it did allow an opportunity for plans to be modified and enhanced.

“On the negative side, here we are in 2021, 15 years after the concept started, so it wasn't a quick buy-in at all,” he says.

“But the board of inquiry did reinforce our mindset that, yes, this is significant for New Zealand Inc and, in planning terms, those words of 'a project of national significance' rang true and will continue to ring true for the next few decades.

“After all, our standard of living rests on our ability to secure export earnings and our ability to have that direct connection with the rest of the world with an efficient supply chain.”

Doing things differently

In 2020, the Government invested $16.8m into Ruakura from the Provincial Growth Fund for the construction of roads. The investment was matched by TGH ($16.8m) while Hamilton City Council contributed $5m. Later that year, the Government announced $40m of "shovel ready funding" for Ruakura to fund water infrastructure and roads.

Joblin says the funding has allowed TGH to scale up Ruakura to meet demand and has put the superhub “on steroids”. It's estimated the superhub will be worth about 20 times the value of The Base shopping centre once fully developed.

But the beneficiaries won't solely be TGH or Waikato-Tainui.

Many New Zealanders don't realise how impactful the Ruakura Superhub will be once it begins operating, says Joblin.Image: CHRISTEL YARDLEY/STUFF

“The bulk of the value is actually going to cargo owners, by creating supply chain efficiencies, and the national economy,” Joblin says.

“One of the things that we strongly believe in is a rising tide floats all boats. What we are doing here, yes, will benefit our iwi. But it's going to benefit everyone. It's going to be massive in terms of jobs, productivity gains, and the environment. It touches everything.”

The investment required to develop Ruakura will involve a variety of ownership structures, partnerships, joint ventures, borrowing, and some public investment in infrastructure.

Cambridge-based C & R Developments is one company to already benefit from its association with the superhub. On the day the company was awarded the contract to do the bulk earthworks at Ruakura, its projects manager Nick Ross​ was about to lay off 30 staff.

TGH’s superhub venture is an example of how settlement money should be invested, says Maori Development Minister Willie Jackson.  Image: CHRISTEL YARDLEY/STUFF

Minister for Māori Development Willie Jackson​ says the Ruakura Superhub reflects the adage that when Māori do well, the country does well. The superhub is also a “great example” to other iwi of how settlement money should be invested.

“It has taken some time for iwi to get to this position, but I congratulate Tainui with regard to this. It makes good economics, it makes good sense, and the Government is very supportive of this.”

There are also plans for medium- to high-density housing to be part of the Ruakura development. Depending on some land being rezoned, Joblin says as many as 4500 affordable houses could be built. A percentage of the homes will be offered to tribal members first.

Chris Joblin, right, discusses the superhub project with Labour MP Jamie Strange, left, and Economic and Regional Development Minister Stuart Nash. Image: CHRISTEL YARDLEY/STUFF

Linda Te Aho​ chairs Te Arataura, the executive committee of Te Whakakitenga, the governance body of Waikato-Tainui, and says the superhub is the centrepiece of the tribe's long-term strategy for intergenerational wealth creation.

Reports detailing progress on the superhub are delivered to Te Whakakitenga every three months while fortnightly updates are given to Kīngi Tūheitia via a leaders’ Zoom forum.

When Ruakura was identified by the tribe's negotiators as part of the 1995 settlement, they appreciated it would be up to the next generation to unlock its potential.

A view to better the lives of the next generation shape the tribe's thinking, Te Aho says.

Waikato-Tainui Te Arataura chair Linda Te Aho says whenua is central to the tribe's identity.  Image: CHRISTEL YARDLEY/STUFF

“That's core to the way in which we view the world and our responsibility to future generations is leaving things in a better state than what we were left with.

“It's a very indigenous way of thinking.”

The tribe's wish to develop and hold land, rather than sell it, is also rooted in a desire to safeguard the wellbeing of future generations.

“Whenua is central to our identity as Māori, to our culture, but for Waikato-Tainui, it's the very reason why we exist as a tribal organisation,” Te Aho says.

“Our ancestors fought so hard to get the whenua back after the confiscation of the 1860s. The raupatu was one of the most traumatic things that happened in our history ... so it's really incumbent on this generation to make sure we hold onto the whenua as much as we can.”

The Ruakura Superhub is the centrepiece of Waikato-Tainui's long-term strategy for intergenerational wealth creation, says Linda Te Aho.  Image: CHRISTEL YARDLEY/STUFF

Papa refers to the guiding statement left by the second Māori King Tāwhiao in which he says this way of life can not be inherited by our tamariki or mokopuna: E kore tēnei whakaoranga e huri ki tua o āku mokopuna.

The directive to create a better way of life for the next generation also bestows a responsibility on them to do the same for those who follow. That way, successive generations become stronger and stronger.

"I put it this way, we used to live in the castle," Papa explains.

"With raupatu, we were relegated to the garage. Now, we're getting back into the castle."

Rahui Papa says Waikato-Tainui is reclaiming its status as an economic powerhouse.  Image: CHRISTEL YARDLEY/STUFF

‘The bigger picture stuff’

Growing up in Hamilton's Fairfield neighbourhood, Cedric Crow's​ driving ambition was to get a high-paying job and to move far away.

"I hated the whole growing up in Fairfield and I remember just wanting to get out of it completely," says the trained civil engineer.

But life has a way of changing and moulding a person's perspective.

Working on community-based projects in his professional life and becoming a father changed the 36-year-old's world view. His greatest motivation now is helping others.

In March this year, Crow joined TGH in the role of infrastructure project manager. His responsibilities involve "basically everything that's horizontal" such as the building of roads, lighting, the wetlands and planting. He's also the conduit between TGH and Hamilton City Council, and works with Crown Infrastructure Partners in terms of external funding.

Cedric Crow grew up in Hamilton's Fairfield suburb and now has a key role with the Ruakura Superhub project.  Image: CHRISTEL YARDLEY/STUFF

One of his most rewarding roles, however, is that of infrastructure lead in the team responsible for social procurement.

"Social procurement is looking holistically around how many people will be employed if a business gets the work, where are they going to get their materials from, is it locally sourced, and what are the outcomes of their training programmes. Procurement should not just be about price, it should be about the total outcome."

Being involved with an organisation that works for the betterment of Waikato-Tainui is also a major box ticked.

"Working on a project that has the ability to positively influence the community and support the tribe, that's the bigger picture stuff. A lot of the stuff that happens at Ruakura will flow on to the people in Fairfield. It's that stuff which matters to me."

Enhancing the environment 

TGH's goal is for the Ruakura Superhub to be the most sustainable commercial hub in Australasia.

That commitment will see a focus on eco-friendly building practices, the use of an embedded solar power network throughout the precinct, and the enhancement of storm water through open swales and a 10ha wetland.

More than 1 million native plants are being cultivated in iwi-affiliated nurseries and will be used in the wetland and throughout Stage 1 of the project. All the plants have been eco-sourced.

More than 1 million native plants will be used throughout stage 1 of the superhub development.  Image: CHRISTEL YARDLEY/STUFF

Work to shape the wetland started in January. Prior to being returned to Waikato-Tainui, the land where the wetland is located was a research farm. Felled exotic trees have been passed on to tribal carvers or turned into lizard habitats. Other off-cuts have been turned into firewood and gifted to schools.

The wetland will receive storm water from the entire development.

"Our sustainability ethos is we want the water that comes off this site to be cleaner than when we get it," Joblin explains.

Work on the superhub's wetland started in January and will eventually be opened up to the public.  Image: CHRISTEL YARDLEY/STUFF

"By using open swales and the wetland, we can achieve that. The wetland also recreates the natural habitat that was once there."

Once the plants are established in the wetland, the site will be opened to the public who will be able to access it via a walking and cycleway boardwalk.

Joblin says the wetland helps TGH meet its environmental obligations, but the company strives to go beyond what is mandated.

"We want to create a real habitat and open it up so the public can engage and participate. We're also kaitiaki of the whenua here and that's an important role.

Story by Aaron Leaman - Stuff

Republished with permission.