Horizons Regional Council has endorsed in principle Greater Wellington Regional Council's Lower North Island Passenger Rail business case.

Horizons had input into the business case and assessed options for the future of passenger rail along the western corridor between the Manawatū and Wellington regions.

It will introduce its finalised business case in the 2020-21 Annual Plan and in 2022-3 HRC will go back to the community with how it intends to fund the region's portion.

The new business case covers six options, with the preferred option being a dual mode multiple unit (electric / diesel hybrid), and services of up to three return trips from Palmerston North to Wellington each weekday, with two return trips each weekend day, and a return trip from Levin each weekday.

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The business case proposes NZTA and Crown capital expenditure will cover 100 per cent of network infrastructure, 90 per cent of the rolling stock, and 50 per cent of the operations cost.

Horizons chair Bruce Gordon says there has been significant investment to retain the Capital Connection over the past three years.

"In addition to the $610,000 spent to date, a further $220,000 will be rated for in Years 2 and 3 of our Council's current Long-term Plan," says Gordon.

"However, the existing service rolling stock is nearing the end of its life.

"Added to this is the unprecedented urban growth in the southern part of our region, increasing road safety issues, increased awareness of vehicle emissions and their impact on climate change, and uncertainty over the Ōtaki to north of Levin expressway.

"Exploration of and a greater reliance on other transport modes is vital."

Horizons will be asked to cover a local share of the capital and operational expenditure for the 2025-26 implementation and beyond.

Revenue estimates have been conservative, however the expectation is that there will be increased patronage which will help to offset costs.

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"Working alongside Greater Wellington Regional Council to improve rail initiatives for the Lower North Island is mutually beneficial," says Gordon.

"Not only will the existing Capital Connection service be upgraded from one return weekday trip to multiple, new offerings will provide sustainable, modern, dual-mode trains to service burgeoning Wairarapa and Kāpiti-Manawatū corridor commuter and tourist markets with faster, more frequent, and rapid turnaround choices."

The Lower North Island Passenger Rail business case will be submitted to NZTA later this month, with a decision on central government funding approvals required by June 2020.