KiwiRail gets $250m initial boost

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The Government is committing $250 million now to KiwiRail and a further $500 million in principle to make it sustainable within a decade.

Announcing the plan today Prime Minister John Key and Transport Minister Steven Joyce said it was part of a $4.6 billion turnaround plan for Kiwi rail designed to see the rail freight plan become sustainable within a decade by getting it to a point where it funds its costs solely from customer revenue.

The lion's share of that $4.6 billion would come from the business itself.

"The government investment reflects the fact the amount of freight being moved on New Zealand's transport network will double by 2040," Mr Joyce said.

But the plan could see commuter fares rise as the rail network is told to look at how the costs are shared.

The plan could also see some smaller lines mothballed if they were not productive. The Napier - Gisborne line was one such line singled out by Mr Joyce.