KiwiRail is to submit a bid to build new freight wagons to replace its ageing fleet.
The state-owned enterprise wants to build 300 wagons, the first stage to replace 3000 as part of its turnaround plan.
KiwiRail chief executive Jim Quinn says he has faith in the capability of its workshops to carry out the construction.
However, he says that does not necessarily mean the KiwiRail tender will be successful, as there is a process to follow and criteria, such as cost, that need to be met.
Mr Quinn says one of the criteria in favour of the KiwiRail bid is that the wagons would be made in New Zealand.
Labour Party MP Clare Curran, who drafted the Kiwi Jobs Bill, welcomes the move.
The bill aims to maximise opportunities for local businesses that are competing for tenders.
