Horizons and Greater Wellington Regional Councils have secured $5 million in funding from Waka Kotahi NZ Transport Agency to pursue a detailed business case, and begin the purchase of regional passenger trains.

Waka Kotahi is fully funding the project that will enable the councils to complete a detailed business case around the purchase of new trains, expected to cost $300m.

Horizons Regional council chair Rachel Keedwell says this is a solid green light for getting regional passenger rail moving again.

"The funding will help address capacity issues in the next five years and enhance connections between the Manawatū and Wellington rail corridor."

"While one of the main aims of the new trains is to deal with capacity issues in the immediate sense, we also expect the new trains will aid population and growth over the next 10-15 years and provide more comprehensive options for people wishing to travel between the two regions.

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"The Capital Connection has seen an annual average growth of 3.1 per cent over the past four years and is fast approaching full capacity.

"This could be a great win for regional rail passengers and the economy.

"Passengers would enjoy more capacity and services, while business would see more movement in the labour market as people take advantage of the opportunities that exist in each region.

"The funding comes at a time when people are looking at smarter ways of working and connecting people against a backdrop of Covid-19 and climate action.

"Our initial business case championed electric or dual-mode fleets to replace the older diesel trains that are coming to the end of their lives.

"The new trains could help lower carbon emissions, and the extra capacity and regular services could give people confidence to move away from their cars and on to the train." says Keedwell.

Horizons and GWRC will now continue detailed investigations, including market assessments to better understand options, risks and costs, in a fast-changing technological environment before completing the detailed business case and the purchasing process for new trains.