Transport funding for Auckland, KiwiRail

The Government has allocated $375 million to speed up the construction of major Auckland transport projects.

In addition, KiwiRail gets almost $200m, taking the total investment in the embattled state-owned passenger and freight business to $2.4 billion since 2008.

Transport Minister Gerry Brownlee said the $375m in capital funding, an interest-free loan to the NZ Transport Agency, was aimed at speeding up the construction of Auckland's $815m of transport upgrades.

"With freight demand forecast to grow by around 50 per cent across the country in the next 30 years, and by almost 80 per cent in Auckland, and with a growing population, we've decided to bring a number of important projects forward," he said.

The projects include the northern and southern corridors and State Highway 20A, the east-west link and the Panmure to Pakuranga phase of the Auckland Manukau Eastern Transport Initiative.

"Some of these projects were up to a decade from starting, but we've decided they simply must begin sooner to give Auckland the best opportunity of moving people and goods around the region," Brownlee said.

KiwiRail will get a further $198m from the Future Investment Fund for its Turnaround Plan, taking total Crown investment in KiwiRail to $2.4b since 2008.

The funding includes $25m to cover costs related to the ferry Aratere, which is being repaired.

The announcement follows problems with the replacement ferry, the Stena Alegra and after further issues with the Aratere were found while it was being repaired.

"KiwiRail has had a challenging few months, but looking more broadly at the rollout of its Turnaround Plan, we can see fundamental improvements in the company's operations," Brownlee said.

"KiwiRail is increasing revenues in its core operations and growing its share of the domestic freight market, and we expect that to continue.

"It was always clear that taking the business to financial self-sustainability was going to be a huge challenge."