KiwiRail appears to have lost its bid to keep operating Wellington's passenger train network.
The Greater Wellington Regional Council has said Transdev, an international company that already operates in Auckland, is the preferred tenderer for the contract.
KiwiRail has run the capital's Tranz Metro network since 2008, but Transdev looks set to take over next July.
KiwiRail chief executive Peter Reidy said he was disappointed by the prospect, as the number of passengers using the network has grown during its time in charge.
Mr Reidy said there have been about 12 million passenger journeys this year, up 4 percent on last year.
If the switch was confirmed, he said Tranz Metro staff would move to the new operator and there would be no immediate changes in the way the network was operated or its timetable.