New Zealand Finance Minister Bill English has announced that state-owned rail operator KiwiRail is set to receive $249m in additional transport funding over the next four years.
The operator will receive $210m in state funding during 2015 and 2016, along with a further $190m as a pre-commitment against the 2016 Budget.
KiwiRail chief executive Peter Reidy said: "Government investment in our business over recent years has enabled us to make significant improvements in the quality of our service offering, meaning we’ve become a more efficient and reliable supply chain partner.
"This has been reflected in the significant growth in freight volumes carried over that period, supporting the government’s ‘Business Growth Agenda."
With the next year’s allocation, the total capital injections to KiwiRail since the 2010 Budget will become $1.43bn.
In the last two years, KiwiRail helped the country to remove around 1.2 million trucks from roads.
Meanwhile, the government has warned that it will not sustain this annual financial support.
New Zealand Transport Minister Simon Bridges was quoted by The National Business Review as saying: "KiwiRail must continue to drive significant efficiency and productivity improvements to reduce an ongoing level of Crown funding required."
The latest funding comes from the Future Investment Fund created by the partial sale of government electricity companies and a reduced holding in Air New Zealand.