About regional passenger rail
How regional passenger rail is funded
Regional passenger rail services in New Zealand receive funding from regional councils and the Government to help keep fares affordable. Without this support, ticket prices would be significantly higher.
Public funding reflects the wider benefits of rail, including reduced road congestion, lower emissions, and better connections between communities.
KiwiRail operates Te Huiaopen_in_new for Waikato Regional Council and the Capital Connectionopen_in_new for Greater Wellington Regional Council and Horizons Regional Council. Both services are jointly funded by regional councils and NZTA.
The future of regional passenger rail
Regional rail is a low-emissions form of public transport and is seeing renewed interest.
Historically New Zealand had numerous inter-regional passenger trains in the North and South Islands, but as roading improved, car ownership increased, and with the advent of fast domestic air-travel, demand for these passenger rail services fell away.
Today, there is a clear process to consider the viability of and establish further inter-regional passenger trains in New Zealand.
The critical step is achieving support from local government and then central government.
It's a three-step process:
Councils first need to understand the potential demand for any service, the costs required to access the carriages, locomotives and crews to operate, and the timeframes required to deliver the service.
This is the business case, which we can help with.
Regional rail can be expensive – Te Huia cost around $92 million to build and operate the service over five years – so understanding public demand for a new inter-regional service is crucial.
Regions would then prioritise the new service in their Regional Land Transport Plan (RLTP), which is used by NZTA Waka Kotahi to determine regional transport initiative funding.
Including a regional rail proposal in the RLTP clearly signals a new passenger rail service is ready for funding.
On the other side, the Government would then consider if this should be prioritised in the New Zealand Rail Plan – a 10-year vision for rail in New Zealand to guide future investment decisions.
Once the work has occurred on the cost structures and the operational considerations, the councils and Government can then determine the funding required and work can proceed to developing the assets and readying the service.
This process can take years as refurbishment of existing assets (e.g. carriages) or procuring new assets may be necessary.
The Ministry of Transport is working on guidance for local councils to assist in the planning, costing, and other considerations for establishing a new passenger rail service.
NZTA Waka Kotahi, responsible for funding the Government’s contribution to these services, and KiwiRail, as an operator of these services, are involved in this work.
Inquiry into the future of inter-regional passenger rail
Parliament’s Transport and Infrastructure Select Committee called for submissions on their inquiry by 21 October 2022. KiwiRail's submission provided context on our role, the processes and considerations typical of any new service.