Auckland's $6 billion light rail project is on hold as the Government turns all its focus towards the Covid-19 response.

Transport Minister Phil Twyford's office confirmed this afternoon that a funding decision for modern-day trams was "on pause at the moment".

There was no timeframe for getting the project across the Cabinet table, a spokesman said.

At the same time, the Government has announced $3 billion worth of infrastructure spending, and another $1.2 billion going to KiwiRail.

More than a third of the spending is focused on the Interislander ferries which connect the North and South Islands and associated port facilities.

A total of $400m is earmarked to replace the Interislander ferries and improve portside infrastructure.

Light rail was promised by Labour to run from the CBD to the airport, and from the CBD to the West Auckland, within 10 years. Prime Minister Jacinda Ardern promised to build light rail to Mt Roskill within four years.

The project is worth $6 billion - but has so far made slow progress as bureaucrats grapple with one of the biggest projects in New Zealand's history.

Official papers and a statement from the NZ Transport Agency previously showed the task was more difficult than the Labour politicians envisaged with a business case for the CBD to airport line still being worked on months after it was due in December 2018.

Since then there has been ongoing back-and-forth about who will build the scheme, with NZTA and NZ Infra the two bidders.

An analysis of both bids has been completed, but the winner was yet to be decided.

Twyford's office told the Herald it remained committed to the project. But a decision on which delivery partner the Government worked with was on hold.

National's transport spokesman Chris Bishop said the fact light rail wasn't mentioned in the Budget announcements nor in the Prime Minister's speech spoke volumes.

"It's clearly going nowhere," he said.

"I think it's a monumental failure to honour their commitments made in 2017. Like Kiwibuild, it will represent the failure to deliver on major infrastructure promises."

While Labour and the Greens support the scheme, New Zealand First is more sceptical, with Shane Jones previously pouring cold water on the idea.

NZ First supports heavy rail, however.

Today, State Owned Enterprises Minister Winston Peters made the KiwiRail announcement.

"Rail is a critical part of our integrated transport network. Not only is investment essential to address decades of under-investment, but further investment in rail will play an essential role in our economic recovery post-lockdown," Peters said.

"The investment in rail infrastructure, is not only helping to secure the thousands of existing jobs at KiwiRail but will be a huge boost to New Zealand's civil engineering and construction sector, with hundreds of contractors, and their material suppliers, needed nationwide for track renewal, mechanical facility upgrades and ferry terminal projects."

Peters' statement said Budget 2020 included $246m towards investment in track and supporting infrastructure, $400m "to help replace the Interislander ferries and associated portside infrastructure" and $421m for new wagons and locomotives.

The other infrastructure projects are yet to be announced.

KiwiRail group chief executive Greg Miller said the $400m contribution to replacing Interislander's three ageing ferries and port infrastructure highlighted the service's importance.

"Our Cook Strait ferries are an extension of State Highway 1, moving 800,000 passengers and up to $14 billion worth of road and rail freight between the North and South Islands each year.

"They are a must have for NZ Inc. The two new rail-enabled ferries will be more advanced, have significantly lower emissions and last for the next 30 years. "