NZ’s KiwiRail is getting an extra $250 million windfall in the next financial year, thanks to the Government. And if the company meets its performance measures, it will get a further $500 million over the following two years.

Prime Minister John Key says he wants to turn KiwiRail into a sustainable rail freight business within 10 years.

KiwiRail says it wants to improve the Auckland-to-Christchurch rail link, increasing the amount of freight that can be carried on the inter-islander ferries.

Rail and coastal shipping are predicted to  double in the next 30 years.

But the KiwiRail money boost is getting mixed reviews in the agribusiness community.

Fonterra is welcoming the multi-million dollar cash injection. The giant co-op uses rail for transporting milk and fuel.

But Federated Farmers isn’t convinced the KiwiRail investment is a good deal.

Economics and commerce spokesperson Philip York says apart from the current use by the dairy and forestry sectors, he can’t see any profitable use of rail by agriculture.

He says $750 million is a lot of good money to throw after bad.

And many rail operators in small towns are expressing concerns over their futures.

Regional leaders are calling for the continued use of smaller lines falling into disrepair.

Masterton Mayor Garry Daniell says the Wairarapa line is steeped in rich history, and is useful for industry especially for carrying logs and milk.

KiwiRail will consult communities over the next year before deciding if the lines should be mothballed.