The Government is considering a passenger rail service from Auckland to Hamilton.

Transport Minister Phil Twyford says Waikato councils are considering the business case for the service which is expected to begin in 2020. The project would cost an estimated $57.77 million over three years.

"The initial service, intended to start in March 2020, would be operated by KiwiRail and include a northbound morning peak service and a southbound evening peak service," Mr Twyford said in a Thursday statement.

He said the passenger rail would stop at Frankton, The Base, Huntly and Papakura. As part of the project, he said the Huntly platform would need to be upgraded and a new island platform would need to be built at The Base.

"Our Government is committed to developing transport options in our urban areas by investing close to $4 billion in public transport, rapid transit and metro rail across the country through the National Land Transport Fund in the next three years," said Mr Twyford.

The passenger service would have four carriages and carry up to 150 passengers each way. As demand grows, Mr Twyford said, the rail service would be expanded to a five-carriage train capable of carrying up to 200 passengers.

"Instead of transport investment trying to play catch up, we need to lead growth and shape our towns and cities," said Mr Twyford. "More people are commuting between Hamilton and Auckland, and introducing this service will give them a choice in how they do that."

The New Zealand Transport Agency (NZTA) Board will now consider whether to fund the proposed Auckland to Hamilton rail passenger rail service in December after the councils have made their decisions.

It comes after the Government decided to keep 15 electric trains running between Hamilton and Palmerston North under state-owned KiwiRail, after committing an extra $35 million to refurbish them.

The plans to switch from electric trains to diesel under KiwiRail were announced in 2016 by the former National government. But an external review by engineering consultants Worley Parsons warned that diesel trains purchased from China have "a very high failure rate".

But the Government's rail ideas haven't always been received well. Transport advocates have called the Government's plan to build a light rail link from Auckland CBD to Auckland Airport "short-sighted" and a "disaster" for the city.

Newshub.