The Government of New Zealand has allocated NZD1bn ($651m) in the latest national budget to bolster railway infrastructure.
The funding will be available to state-owned rail operator KiwiRail over the next two years.
Of the total funding, around NZD375m will be utilised to replace the ageing fleet with new wagons and locomotives.
Another NZD331m will be invested in infrastructure maintenance, which includes overhauling railway tracks, signalling systems, bridges, tunnels and other supporting infrastructure.
The funding package allocated NZD35m to procure two new rail-enabled ferries.
Additionally, another NZD300m from the Provincial Growth Fund has been allocated for regional rail initiatives.
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New Zealand Transport Minister Phil Twyford said that the funding aims to rebuild the national railway network as a sustainable transport system.
Twyford said: “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.”
A long-term national rail plan will be developed later this year, the minister added.
KiwiRail Group chief executive Greg Miller said that the investment will help to build a solid foundation for the future of rail in New Zealand.
Miller said: “More than a billion dollars over two years is an outstanding level of investment from the government. It’s a real shot in the arm for KiwiRail, and a clear recognition of the value rail can add to New Zealand’s transport system.”
The funding is part of the New Zealand Government’s efforts to strengthen railway infrastructure in the country, which may boost regional economic growth, decrease traffic congestion and reduce greenhouse gas emissions.