The Government's substantial investment through Budget 2019 builds a solid foundation for the future of rail in New Zealand, KiwiRail Group Chief Executive Greg Miller says.

Today the Government announced a $741 million appropriation for KiwiRail through Vote Transport over the next two years and a further $300 million available for regional rail projects through the Provincial Growth Fund (PGF).

"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.

"We know that rail, with 66 per cent fewer emissions per tonne of freight carried than trucks, has a key role to play in reducing New Zealand's transport emissions, relieving congestion on our roads, improving road safety and connecting our communities.

"This funding will allow us to improve the resilience of the rail network and invest in much needed wagons, locomotives and improve the productivity of our workshops so that rail services can be more reliable and operate more competitively in the market.

"KiwiRail operates across the country and we want to deliver more benefits to the regions. It's very encouraging that the Government has set aside $300 million for regional rail projects in this Budget, and we will be discussing regional rail opportunities with them".

The breakdown of Budget funding includes:

* $331m towards addressing legacy issues to improve reliability and resilience, such as maintaining existing tracks, signals, bridges, tunnels, new freight handling equipment and a new freight reservation and tracking system.

* $375m towards replacing 900 aging container wagons and start replacing the fleet of 48 South Island locomotives and some shunt engines, which are up to 50 years old; and improving the layout and efficiency of the major maintenance depots at Hutt and Waltham.

* $35m for progressing procurement of two new, rail enabled ferries that will replace Interislander's aging Aratere, Kaitaki, and Kaiarahi ferries.

* Potential to access up to $300m from the PGF for regional rail projects.

Mr Miller also welcomed the Government's announcement of the New Zealand Rail Plan.

"KiwiRail fully supports the New Zealand Rail Plan and will be working closely with the Ministry of Transport as it is developed.
"I see a great opportunity to think strategically about rail, including ensuring that it is integrated into transport planning across the country, and that there are appropriate mechanisms to ensure rail infrastructure is funded sustainably on an ongoing basis.

"For KiwiRail, the New Zealand Rail Plan will help ensure a level of certainty over the longer term, which is crucial for us to make effective commercial decisions.

"Combined with the Budget investment, the rail plan sets the foundation that will allow us to really grow rail for the benefit of New Zealand."

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