The Government of New Zealand has allocated NZ$548m ($384m) in this year's budget to maintain and upgrade rail network and freight movement capabilities across the country.

Almost NZ$450m ($315m) of the total funding is set to be invested in KiwiRail over the next two financial years.

New Zealand Minister of Transport Simon Bridges said: “Budget 2017 investment in New Zealand’s rail infrastructure and systems will ensure that KiwiRail can improve its resilience and reliability, while continuing to support tourism, freight and export industries.

“Restoring the South Island Main Trunk Line is a key priority for the government; KiwiRail has been making excellent progress clearing slips, obstructions, and reinstating the rail track so that this essential connection can open by the end of the year.”

Most of the funding will be invested in KiwiRail’s rolling stock and network in a bid to ensure the gains of the past two years are continued in future.

"KiwiRail has been making excellent progress clearing slips, obstructions, and reinstating the rail track so that this essential connection can open by the end of the year."

KiwiRail chairman Trevor Janes said: “Today’s announcement acknowledges the important role rail plays in the New Zealand transport system.

“KiwiRail transports around 25% of the country’s exports, plays a critical role in regional tourism and enables more than 27 million commuter trips in Auckland and Wellington each year.”

The government has also announced plans to invest NZ$98.4m ($69m) in Wellington’s metro rail network, which will be used to replace the remaining timber poles and overhead wires that deliver power for trains operating on the Hutt Valley, Melling and Johnsonville rail lines.

The government has allocated approximately NZ$1bn ($703m) for rail infrastructure in this budget with the addition of the Auckland’s City Rail Link investment.