Mayor says Invercargill ratepayers should not be asked to fund passenger rail after $3.4m Government loan

Correction, 6 November 2026: an earlier version of this story described the Government's $3.4 million loan as funding a 12-month trial of the Mainlander train between Christchurch and Invercargill. The 12-month trial is a Canterbury commuter service between Rangiora, Rolleston and Christchurch. The loan also supports Mainland Rail in moving its existing Christchurch to Invercargill Mainlander service from monthly excursions to a regular timetable. The headline and story have been amended. We thank reader Wayne Drogemuller for pointing out the error.

Invercargill mayor Tom Campbell says the city's ratepayers should not be asked to help pay for passenger trains, after the Government announced a $3.4 million rail loan on Saturday, a week before the general election.

The loan, from the Regional Infrastructure Fund, goes to Mainland Rail and covers two different things. The first is a 12-month trial of commuter trains in the mornings and evenings between Rangiora, Rolleston and central Christchurch from mid-2027. The second is help for the company to turn its existing Mainlander, which already runs between Christchurch and Invercargill as a monthly excursion in former Capital Connection carriages, into a regularly timetabled service stopping at Ashburton, Timaru, Oamaru, Dunedin and Gore. Announcing the package, Rail Minister Winston Peters and Regional Development Minister Shane Jones said the long-distance service was not commuter rail but a separate deal with Mainland Rail to increase frequency on the route.

For the commuter trial, councils must first confirm they will cover half the cost before the money is released. The Christchurch, Selwyn and Waimakariri mayors have written letters of support, the Government said. According to RNZ, the councils' share amounts to a $1.7 million gap, and how many councils will be asked to pay is not yet clear. The Government has not said that Southland councils would be asked to contribute to the Mainlander timetable.

Mr Campbell told RNZ the announcement had taken him by surprise and that the timing invited an obvious conclusion: you would "almost think" there was a general election coming up, he said.

He said the Government had spent the term telling councils not to raise rates beyond a set point, so an invitation to help pay for a train would not "be well received here".

The mayor said population growth since the old Southerner stopped running in 2002 gave a service a better chance than before, but it had to run commercially "or not at all", and a 12-month trial was too short a horizon for ratepayers to invest in.

Councillor Ria Bond, a former NZ First MP who has campaigned for the train's return, called the timing "disingenuous". She told RNZ the Government was dangling a carrot while blaming councils for wasting ratepayer money, and said she felt the region was being set up to fail. She argued a trial was unnecessary because demand for public transport was already obvious, and said the service would help people who cannot drive and those avoiding high fuel prices.

New Zealanders had grown weary of transport schemes with price tags in the hundreds of millions or billions of dollars, Mr Peters said. Fares were expected to be in line with what rail commuters pay in Auckland and Wellington, and would be announced nearer the start date. He told the Otago Daily Times he was confident the service would stop at the restored Mataura Railway Station when it reopens in late 2027.

The South Island's rail corridors were regional infrastructure assets, Mr Jones said, and there was an obvious benefit in bringing passengers to spend money in the towns of Canterbury, Otago and Southland.

Paul Jackson, chief executive of Mainland Rail's parent Rail & Tourism Group Holdings, told the NZ Herald the company had been talking to central and local government about a trial for some time and saw the loan as a vote of confidence in its ability to return its carriages to service.

The Southerner ran daily between Christchurch and Invercargill from 1970 until 2002, when it was withdrawn for lack of passengers. Mr Peters has backed the return of passenger trains to Invercargill throughout the campaign, and in 2025 the Government funded the restoration of the Mataura station.

Mainland Rail is now expected to start planning both services with KiwiRail, the rail regulator and the councils involved, and the Government says start dates will be announced closer to the time. Mr Campbell said the loan announcement had come without warning to his council, which has yet to receive any formal request to contribute.