Passenger trip numbers on Wellington's rail network fell by about 125,000 in the first three months of this year compared with last year.
KiwiRail attributes the drop of almost 4.5% to train breakdowns and disruption during major upgrading work.
Chief executive Jim Quinn says the problems with reliability have been regrettable.
He says the problems should be eliminated when the $500 million upgrade is finished next year.
Bus to replace some trains during the upgrade and as a result of breakdowns, have to date cost KiwiRail $2.9 million, excluding GST.