The New Zealand Government has allocated NZD1.2bn ($717m) in its Budget 2020, which will be available to state-owned rail operator KiwiRail.

This funding will help in increasing the passenger numbers and freight on rail.

Last year, the New Zealand Government allocated NZD1bn ($651m) in its latest national budget.

The latest round of funding has allocated NZ$400m for replacing the old Interislander ferries and NZ$421m to aid the ongoing replacement programme for some of the oldest locomotives.

Additionally, the budget has allocated NZ$246m to ensure that the rail network in the country is reliable and resilient, which will include more than 3,000km of track, 1,000 bridges and nearly 100 tunnels.

It is also topped off National Land Transport Fund with a contribution of NZD148m.

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KiwiRail Group CEO Greg Miller said: “The Government’s investment allows us to continue with our locomotive replacement programme and raise the standard of our rail lines, bridges and tunnels across the country. This will enable KiwiRail to offer better and more reliable train services for our customers, and move more of New Zealand’s growing freight task onto rail.

“This funding recognises that rail has a greater role to play in New Zealand’s transport sector and that it can make a valuable contribution towards lowering our transport emissions, reducing road congestion and saving in road maintenance costs, which benefits our nation as a whole.”

He added that the contribution to replace the three ageing ferries of Interislander and the landside infrastructure shows that ferry connection is important for the country.

Transport minister Phil Twyford added: “The coalition government has a bold vision for a 21st century rail network as outlined in the draft New Zealand Rail Plan. We need a resilient and reliable rail system to support freight and get our cities moving.

“Budget 2020 builds on the substantial investments we’ve already made in rail through past Budgets, the Provincial Growth Fund, and the New Zealand Upgrade Programme, which will help future-proof the economy and reduce emissions.”