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.

South Dunedin's Hillside workshops is getting a significant boost from the Government. Photo: ODT

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.

Regional development minister Shane Jones makes Provincial Growth Fund announcements at Hillside Workshops this morning. Photo: Craig Baxter

Since then some work has continued, however, and private companies have also used 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.''

Dunedin-based Scott Technology is getting a $5.8 million boost. Photo: ODT files

The PGF was also investing almost $8 million in the smaller engineering and manufacturing sectors, which Mr Jones said were vital for the region both in terms of economic growth and employment opportunities.

"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: