BUDGET 2017: Rail gets better part of $1 billion

Thursday 25th May 2017

New Zealand’s rail infrastructure will get the better part of $1 billion from the government with money set aside to upgrade KiwiRail’s rolling stock and infrastructure, and Wellington and Auckland’s rail networks.

Some $450 million was set aside for KiwiRail over the next two years to help restore the southern trunk line destroyed by last year’s Kaikoura earthquake and improve its rolling stock, ahead of a planned review of the state-owned rail operator’s capital needs in the current year.

“The government wants to put the rail network on a longer-term sustainable footing,” Transport Minister Simon Bridges said. “In the year ahead we will be conducting a wider review of KiwiRail's operating structure and longer-term capital requirements.”

Budget documents show the accounting treatment of KiwiRail may need to change if its freight business no longer meets certain criteria, and that would increase the value of its assets by $4 billion, reversing earlier impairment charges of between $1 billion and $2 billion.

Another $98 .4 million will be invested in Wellington’s metro rail network, while the first tranche of the government’s commitment to the Auckland City Rail Link was allocated $436 million. The government expects to cover half the cost of the network, which is estimated at between $2.8 billion and $3.4 billion.

(BusinessDesk)

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