The cost of major upgrades to Wellington’s rail network have blown out by $50 million and the project has been delayed by four years, with no guarantee the Government will meet the shortfall. 

18 new hybrid-electric passenger trains are due to arrive in 2028 to service the lower North Island between Wellington and Masterton and Wellington and Palmerston North. 

The much-touted new carriages are expected to increase journeys on the two lines by 1.5 million trips annually. 

But before they can hit the tracks, major upgrades need to be made to lines, stations - and most importantly - substations. 

Electrical work is needed to increase the frequency of the new trains, compared to services now, to accommodate the region’s growing population. 

Greater Wellington Regional Council chairman Daran Ponter said it’s “unfathomable” the upgrades would not be completed in time for the new trains. 

“It simply cannot happen and won’t happen.” 

The original business case for the substations had a price tag of $78.3m but a revised business case shows that cost has now increased to $128m. 

Greater Wellington Regional Council chair Daran Ponter wasn't surprised by the budget blowout. Photo / Mark Mitchell 

The upgrades were meant to be completed this year but have now been delayed until 2027, just one year before the new trains are scheduled to arrive. 

Ponter said he was not surprised by the cost increase. 

“I’m not aware of any major civil project that is being undertaken, whether it’s about rail, roads or other infrastructure, that isn’t facing these types of cost blowouts but it’s certainly disappointing and clearly it can’t continue.” 

The regional council wants the Government to pay for the budget blowout. 

Transport Minister David Parker wouldn’t say if the Government would meet the shortfall. 

“While further funding is not currently committed, it is important to note that this Government has invested more than $9 billion into KiwiRail nationwide since 2018 – far more than any previous Government.” 

Parker said that includes $600m in upgrading the Wellington Metro Network and the Wairarapa line, along with $26m for replacement carriages and platform upgrades on the Capital Connection. 

KiwiRail chief planning & asset development officer David Gordon said the latest business case reflected the better understanding it now had of what was required to build electrical capacity for the new trains. 

“The new business case which was submitted to Waka Kotahi factors in the significant costs associated with necessary upgrades to Wellington Electricity’s network. 

“It also factors in the need to build new substations as well as completely overhaul the existing ones.” 

Gordon said KiwiRail has enough money to proceed with initial stages of the upgrade work. 

KiwiRail will continue to work closely with the council to ensure the rail network can support the new trains he said. 

“This includes ensuring there is an appropriate amount of voltage to support the services.” 

Waka Kotahi multimodal integration national manager Deborah Hume confirmed the transport agency has received an investment proposal for more money. 

She said it is accepted there is a need to invest for future growth of the network and partial funding of $10 million for the $50 million shortfall has been approved. 

“However, a full commitment to providing the remaining funding being sought cannot be made immediately.” 

Hume said this will require further consideration. 

Nick James is a Newstalk ZB reporter based in Wellington with a focus on the environment, infrastructure, social and Wellington issues. He joined Newstalk ZB in 2021.