KiwiRail's decision to replace electric trains with diesel is being slammed as "backwards thinking" by the Labour Party.
The 30 year-old Northern line electric fleet will be phased out, with Chinese diesel imports taking their place.
KiwiRail's justified the move, saying electric trains only operate on a small part of the line anyway, essentially creating a "railway within a railway".
"Imagine having to change planes at Hamilton and again at Palmerston North, just to fly from Auckland to Wellington. That's not efficient; it's costly and ultimately delivers a less reliable service," said chief executive Peter Reidy.
Labour Party transport spokeswoman Sue Moroney said the rash decision is a sign the State Owned Enterprise is under pressure.
"It is a messy decision and it feels to me as if the decision to go to diesel was made, and then Kiwi Rail has gone about trying to build a case to justify the use of diesel over electrics."
The switch to diesel will be 25 percent cheaper for KiwiRail to run, but Mrs Moroney said there's a much bigger picture to consider.
"If we are going to reduce the emissions in line with the agreements that we've signed, clearly we've got to make a substantial reduction in the emissions happening in transport."
She said the Government's never been committed to reducing emissions and greenhouse gasses.
KiwiRail said the move will reduce its carbon footprint because fewer trucks will be needed to move loads, despite diesel emitting five times more greenhouse gases than the current fleet.
"Every tonne of freight moved by rail delivers a 66 percent reduction in carbon emissions from road. That's critical for our customers, and for the country."
The 16 electric trains will be phased out over the next two years.