John Key, the Prime Minister of New Zealand, has said that KiwiRail might continue to rely on government subsidies as it is not likely to make a profit on its own.

The Prime Minister said that the government will continue to subsidise it into the future. A recent report by the state transport company said that it has considered cutting costs by closing down its freight business and withdrawing from operating the Cook Strait ferries. Officials said that KiwiRail makes a profit on its operations but added that it required around $200 million a year for its track and tunnels that are provided by the government.

Mr Key pointed out that it has been already recognised that the company will not turn commercially viable. He said, "I think ultimately what it means is the government is going to be contributing to the fortunes of KiwiRail for a very long time. They have an enormous amount of infrastructure that still needs to be upgraded. Of course that doesn't mean they don't have a responsibility to try and run KiwiRail as efficiently as they can and to make savings where they're appropriate, but no-one's arguing there isn't a place for KiwiRail and rail in New Zealand."

He also said that KiwiRail has hundreds of bridges and requires upgrading and heavy maintenance works on its network in the country. The government funds KiwiRail from the Future Investment Fund, which has money raised from this term's partial asset sales but once those funds are used, the government will have to look elsewhere to secure funding for the railways.