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Extra $121 Million To Be Spent On Rail Network This Year

Fuseworks Media
Fuseworks Media

Wellington, Oct 1 NZPA - An extra $121 million improving the rail system in the current financial year is small change compared to the money needed to build new roads, Finance Minister Michael Cullen said today.

Speaking at a ceremony to formally hand over the shares in KiwiRail to the New Zealand Railways Corporation, Dr Cullen said the $121 million was the first instalment to fill the gaps in the rail system over a five year period.

The Rail Development Group had recommended that more than $1 billion be spent over five years on the replacement of locomotives, rehabilitation of key parts of the network, upgrading information technology and creating freight hubs, Dr Cullen said in a speech at Auckland.

"I am delighted today to announce that as a first instalment, the Government has committed $121 million for rail industry improvements in the current fiscal year over and above previously forecast spending," Dr Cullen said.

The Government committed to $80 million in new spending on rolling stock in July.

The KiwiRail board members will be expected to report early next year on their view on their investment and funding needs for the remainder of the five year capital programme.

Dr Cullen said rail in New Zealand in recent years had restricted resources of wagons and locomotives which KiwiRail -- as the rolling stock operator -- would look to improve.

Ontrack, which runs the tracks and associated infrastructure, was already making upgrading improvements.

Both organisations will be run by the New Zealand Railway Corporation.

Dr Cullen said the $121 million was "virtually small change" when compared to the projected costs of major roading projects such as Wellington's Transmission Gully and Auckland's waterview tunnel.

National's finance spokesman Bill English said Dr Cullen was taking a "blank cheque approach" to rail.

The Government had spent too much on purchasing the business and while National was committed to investing in rail to make it work, it would take a more careful approach.

ACT leader Rodney Hide described rail as a black hole sucking up taxpayer dollars.

Dr Cullen said considering the energy challenge New Zealand faced in the coming year, the black hole of funding looked more like a pot hole that urgently needed to be filled.

Corporation chairman Jim Bolger said the board had already began the task of establishing priorities for the money and it was a matter of establishing the balance between improving infrastructure, buying new rolling stock and upgrading support systems.

The former National prime minister said he had no doubt about the value of the spending.

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