KiwiRail will receive $250 million of capital in 2012/13 for its Turnaround Plan to ‘help the rail freight business become sustainable’, Transport Minister Gerry Brownlee has said.
The Budget 2012 appropriation is the final round of a three-year $750 million Government funding package supporting the objectives of KiwiRail’s Turnaround Plan.
“The plan is designed to help the rail freight business become sustainable by 2020 so it can fund its business solely from customer revenue.
“While the lion’s share of the investment is coming from the business itself, Government funding over three years demonstates our commitment to improving the rail freight network by providing capital investment to kick-start the growth process,” Mr Brownlee says.
KiwiRail has undertaken a significant investment programme over the previous two years, including new locomotives and wagons, and refurbishment of the current locomotive fleet.
Renewals and upgrades of the rail network to improve transit times have also been funded to improve reliability.
“Most of the Government funding will be spent on KiwiRail’s freight services and network improvements, contributing to the ongoing investment in locomotives and wagons, infrastructure upgrades and track renewals. This will continue to remove capacity constraints and improve reliability,” Mr Brownlee says.
“Some progress has been made in increasing freight revenue and volume on rail corridors where investment has been made.”