KiwiRail is getting a major boost in the 2019 Budget with more than $1 billion earmarked for the organisation.

The funding includes $375 million to be spent on new wagons and locomotives, $331m on track and other infrastructure, and $35m on replacing the inter-island ferries.

The new ferries will be rail-enabled, allowing trains to use them.

Not all of that money is new – almost a third ($300 million) will come from the Provincial Growth Fund, which was announced in the last Budget.

That money will be used for tourism services in the South Island and reopening the rail line from Napier to Wairoa for forestry.

Deputy Prime Minister Winston Peters, who is also the Minister for State Owned Enterprises, said the new investment was “gratifying”.

“After 155 years of rail in New Zealand, the historic misstep of privatisation and the misstep of managed decline of the past decade, securing these assets for the future is especially gratifying,” Peters said.

New Zealand Railways had been privatised but was re-nationalised under the Helen Clark government. Underinvestment in rail was a bone of contention during the previous government.

Peters said the investment would help New Zealand meet its Paris climate change agreement commitments. He said freight moved by rail generated 66 percent less greenhouse gas emissions than that moved by road.

“We need to get over thinking roads are the answer to thinking,” Peters said.

“We want to see the right combination of road, rail, shipping and the like that works for business and makes transport easier,” he said.

$35 million in operating spending was given to maintain the electric locomotive fleet on the lower North Island main trunk line. The main line in the North Island is only partially electrified, which often leads to calls for the electric trains to be replaced by diesel.

The new spending will allow for the refurbishing of electric control systems and keep 15 electric trains running that would otherwise be retired.

Transport Minister Phil Twyford said the funding was to build a stronger rail network that shifts more freight by rail and fewer trucks on the roads.

…and rail for Auckland

The Budget also funds the Government’s share of the blow-out cost of the Auckland City Rail Link, which is $405.5 million. The Rail Link has been given $1.4 billion in capital spending, including the $855 million original cost, which is shared equally with Auckland City Council.

$134 million was given for running nine-car trains, and increasing station capacities.

The Provincial Growth Fund — all gone

The Budget also allocates another $380 million from the Provincial Growth fund. $1.7 billion has already been allocated to over 250 projects. The PGF’s $3 billion has now been fully allocated.

Along with the $300 million to rail, $40m has been given to projects in waste, and $40 million to projects in energy.

$1.7 billion has now been allocated from the fund so far and this Budget fully funds the cost of the $3 billion fund.

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