Spending $115 million on new carriages and locomotives for KiwiRail was the first rail infrastructure spending to be approved that made sense, Infrastructure Minister Bill English said last night.
Mr English has been critical of the previous Labour government's decision to pay as much as it did to buy back KiwiRail from Australian-listed Toll Holdings.
The previous government made decisions that did not provide value.
His team had been working through the decisions to find the areas where value could be added to the economy, Mr English said.
"The decision to build new carriages was the first investment that made sense.
"It's long overdue."
Although the decision to use Hillside for the work was made by the KiwiRail board, Mr English was pleased Dunedin retained the skilled staff that allowed the work to be undertaken in the city.
Asked if the Government's decision to spend money and invest in infrastructure could help give confidence to businesses to do the same, Mr English said he hoped so.
The national infrastructure unit within Treasury would improve the way public sector agencies managed their existing infrastructure assets and would lead to stronger forward planning of infrastructure needs, he said.
A national infrastructure advisory board, to include representatives from the private sector and local government, would also be established to advise the unit said Mr English.
Dunedin South MP Clare Curran said the injection for Hillside would provide certainty for jobs.
"I absolutely applaud that."
However, the Government was sending mixed messages about its long-term commitment to a countrywide rail system which would benefit all New Zealanders.
"Rail is our future both for freight and for passenger services.
"It's a public good, it's an economic way to shift freight and it's good for the environment."
