$40m boost for Coastal Pacific train service

The new funding for the Coastal Pacific was announced by Prime Minister Jacinda Ardern at a function in Kaikoura on Friday. Photo / Kiwirail

KiwiRail has received $40 million of Crown funding to increase patronage on the Coastal Pacific passenger service in the South Island.

The funds will be used to operate the Picton to Christchurch service year-round, add an additional 63-seat carriage for peak seasonal traffic, and add a new premium luxury carriage.

KiwiRail acting chief executive Todd Moyle said the Coastal Pacific, which has resumed operations after two years of earthquake repairs to the line, had been bringing about 42,000 passengers and $34m a year into Marlborough and Kaikoura alone.

"With this investment we will see double that number within a decade, creating more than 400 new local jobs," he said in a statement.

"The new premium service on the Coastal Pacific will allow us to tap into the fast-growing, international high-value travel market to deliver more benefits to Kaikoura and Marlborough. KiwiRail will be investing in upgrading our reservation systems and in international marketing for the premium service."

The announcement takes to almost $90m the rail funding that has so far been pledged from the government's Provincial Growth Fund. That includes $40m committed earlier this month to develop a new freight hub at Palmerston North.

In addition, the New Zealand Transport Agency is considering funding a daily Hamilton-Auckland commuter service budgeted at $57.8m for its first three years' operation. In October Transport Minister Phil Twyford said KiwiRail would receive $35m over four years to restore its electric engines on the North Island.

The new funding for the Coastal Pacific was announced by Prime Minister Jacinda Ardern at a function in Kaikoura on Friday marking the resumption of the passenger service.

Full freight services resumed on the line in October, having been limited to night-time only runs for 13 months to enable repair work to continue during the day.

KiwiRail says the new premium passenger service may be operating in 2022, allowing for the refurbishment of the rolling stock.

To date, most of the PGF funding for KiwiRail has been for its freight business. The next largest sum was $5m toward restoring the Wairoa-Napier line.