The single largest beneficiary of the asset sales programme this year will be the loss-making state-owned railway, with $250 million of the approximately $600m proceeds from the part-sale of Mighty River Power earmarked for KiwiRail.
The budget forecasts $558.8m will be available to spend in the so-called Future Investment Fund, the money-pot from asset sales to invest in new capital infrastructure, in the 2012/13 fiscal year.
Almost half will help fund KiwiRail's massive network upgrade project.
Transport Minister Gerry Brownlee said KiwiRail was funding most of its reinvestment programme from its own balance sheet, and most of the government funding would be spent on freight service and network improvements.
He made no mention of the current push to keep open the Napier to Gisborne network which was washed out in a storm.
The budget documents also show KiwiRail needs another $90m of new capital next year.
A new, unquantified risk to the government's accounts from the fact that KiwiRail will need to write down the value of its assets, despite the reinvestment programme, is also identified.
The government earlier purchased the previously privatised rail company from Australia's Toll Holdings.
The government expects to raise between $5 billion and $7b from asset sales over five years.
The share float of Mighty River Power is expected in September or October, with details to be announced after legislation allowing the part-sales to proceed is passed in coming weeks.
Finance Minister Bill English also confirmed that proceeds from asset sales will be the source of any new capital for state-owned KiwiBank, which the budget documents identify as a new, unquantified fiscal risk.
The Future Investment Fund will also provide $88.1m for hospital redevelopment and $76.1m for an Advanced Technology Institute.