$2m Boost to Extend Dunedin Tunnels Trail and Grow Cycling Tourism

The newly announced funding focuses on stages 2 and 3, which will take the trail from Wingatui through Fairfield, Abbotsford, and Green Island.

The Government has committed $2 million to accelerate the expansion of the Dunedin Tunnels Trail, a landmark cycling and recreation project that is expected to transform Dunedin into one of New Zealand’s premier cycling destinations. Tourism and Hospitality Minister Louise Upston announced the funding, emphasising that the investment will strengthen Otago’s appeal, stimulate regional tourism, and broaden the area’s network of world-class cycling experiences.

According to Minister Upston, the Dunedin Tunnels Trail is not only a recreational asset but also an economic catalyst. The extended trail will help draw domestic and international visitors into the wider Otago region, generating new business opportunities, supporting hospitality ventures, and contributing to sustainable job creation. She noted that the project showcases the region’s unique landscapes, historic rail heritage, and vibrant communities, making it an ideal destination for cyclists seeking natural beauty and memorable travel experiences.

The newly announced funding focuses on stages 2 and 3, which will take the trail from Wingatui through Fairfield, Abbotsford, and Green Island. Once completed, construction will then progress to stages 4 and 5, extending the route to Kaikorai Valley and through the historic Caversham Tunnel, delivering a seamless connection into Dunedin City. The full vision for the project includes a 15-kilometre trail stretching from Mosgiel to central Dunedin, incorporating two heritage railway tunnels: the Chain Hills Tunnel at Wingatui and the Caversham Tunnel situated between Burnside and Kaikorai.

The trail's alignment has been carefully designed to integrate with Otago’s renowned cycling network. Once complete, riders will be able to access several of the country’s iconic Great Rides, including the Otago Central Rail Trail, Clutha Gold Trail, Lake Dunstan Trail, Roxburgh Gorge Trail, and the Queenstown Trail network. This interconnection places Dunedin in a much stronger position to attract multi-day cyclists, adventure tourism enthusiasts, and visitors seeking curated cycling journeys through the region.

This initiative forms part of the Government’s broader Major Events and Tourism Package, which aims to prioritise projects that create tangible regional benefits and can be rapidly implemented. Minister Upston said she is encouraged by the increasing optimism across New Zealand’s cycling and tourism sectors, noting steady growth in visitor arrivals and regional expenditure. However, she acknowledged that further work is required to fully revitalise the tourism industry and sustain long-term momentum.

The project is being co-funded by the Dunedin City Council, demonstrating strong local support and partnership. Construction of stages 2 and 3 is expected to be completed by mid-2027, paving the way for subsequent stages and the final connection into the city. Once delivered, the trail is anticipated to play a major role in reshaping Dunedin’s tourism identity, offering residents and visitors an accessible, scenic, and historically rich cycling route that enhances the region’s outdoor recreation offerings.