The Government spent nearly $700 million buying back the rail network from Toll New Zealand.
Associate Finance Minister Trevor Mallard suggested that locomotives for KiwiRail could be assembled in the Hutt workshops, opening up claims of why Hillside, already a part of the new KiwiRail company, could not be part of the process.
Finance Minister Michael Cullen said yesterday that despite some improvements in the past few years, a significant investment was required just to keep some existing rail services running.
"This $80 million investment is our first step.
In the next few weeks, I will present a paper to Cabinet proposing to expand the role of rail in our economy and the investment necessary to make that happen."
Improvements for Auckland and Wellington commuter services and a major overhaul of the Tranz Scenic service, between Christchurch and Greymouth, were the first projects under way, he said.
Some urgent repairs and safety issues were to be addressed at the Wellington and Picton Interislander ferry terminals.
"At the time of high petrol prices and concern about climate change, New Zealand cannot afford a substandard rail system," Dr Cullen said.
