A $1 billion funding package will facilitate the “long overdue” redevelopment of KiwiRail, with money set aside for new rollingstock, track and supporting infrastructure.
KiwiRail will receive $375 million for new wagons and locomotives, $331 million in track and infrastructure, and funding to begin replacing its Interislander ferry fleet.
There’s also access to up to $300 million from the Provincial Growth Fund for regional rail projects.
Transport minister Phil Twyford said the budget put a strong focus on rebuilding rail as the backbone of a sustainable 21st century transport network, with plans for a long-term national rail plan to be developed this year.
“Our goal is to have a stronger rail network that sees more freight moved by rail and fewer heavy trucks on our roads, as well as better public transport options to give commuters choice,” Twyford said.
“Previous governments took a hands-off approach and left rail in a state of managed decline. That’s why we instigated the Future of Rail review to make sure we are taking a long-term approach to rehabilitating rail.
“Our New Zealand Rail Plan will outline the Government’s strategic vision and give a 10-year programme of indicative investments and benefits.”
The budget, announced on Thursday, will also provide $405.5 million in extra funding required for the City Rail Link, after the cost of the passenger rail project was revised upwards.
City Rail Link Ltd welcomed the announcements, which follows Auckland Council’s decision to add its share of extra funding earlier this month.
“Today’s budget news and the Council’s earlier decision are big and positive steps forward, and our sponsors’ confidence clears the way for us to get cracking on delivering a project that will have a huge impact on Aucklanders,” CRL chief executive Sean Sweeney said.
Australasian Railway Association CEO Danny Broad said the investments included in the budget would improve the reliability and competitiveness of rail services in New Zealand.
“We are seeing an investment boom in rail right across Australasia as governments are recognising the contribution of rail to ease congestion, add to economic productivity, reduce carbon emissions and improve road safety,” Broad said.
“We are particularly pleased with the announcement of the development of the New Zealand Rail Plan. Rail needs to be fully incorporated into regional and national transport planning, with appropriate funding mechanisms.”
Note: Figures in New Zealand Dollars.