Squeeze on KiwiRail services

The Government is considering scrapping some of KiwiRail's services in Gisborne and northern Wairarapa as funding for rail is squeezed by other infrastructure priorities.

KiwiRail made a profit of $125 million in the six months to December, but that was $67 million below its target. Without public funding of $260 million, it would have made a loss of $137 million.

Transport Minister Steven Joyce is considering a new business plan from KiwiRail.

Labour transport spokesman Darren Hughes said: "It seems crazy to me that we are going to see the doubling of the amount of freight moving around New Zealand in the next two decades and the Government is considering closing off options for rail."