Wellington's congested rail system is at "heightened risk" of collisions, with few failsafes and relying on train drivers, but is unlikely to see an upgrade because of lack of funding.
Two trains nearly collided in May 2016 when the driver of an empty passenger train stopped on the tracks 13 seconds before one carrying 79 passengers crossed the same tracks.
The Transport Accident and Investigation Commission investigation found a red stop signal had been set to hold the empty train just short of the cross-over point so a train with passengers could pass.
However, there was another signal showing green adjacent to the red signal meant for the empty train. The driver confused the two signals and failed to stop at the red light but realised his mistake shortly after continuing.
There was no collision and no-one was injured.
The TAIC report released in December 2017 stated that the existing layout meant there were fewer safety overlaps designed into the area at the station.
It found there were fewer failsafe back-up systems in place in the event of a driver failing to stop at a red light.
It also noted that any increases in commuter train services would increase the pressure on this bottleneck area, which would also increase the risk of relying on train drivers to stop at red lights.
TAIC recommended that KiwiRail develop a long-term strategy to improve the safety of the tracks and signalling infrastructure.
"To decongest and modernise the track and signal infrastructure at Wellington Station will require significant resources, which is unlikely to occur in the near future," the report stated.
"However, there will likely be future increases in rail patronage and the system is already congested."
The TAIC said that there were a number of measures that needed to be taken to reduce the risk of trains colliding.
The commission's chief accident investigator, Tim Burfoot, told Morning Report the station's tracks were congested and a long-term strategy was needed to fix the problem.
"To rely on humans alone without any back-up systems is not good because humans do make mistakes," he said.
KiwiRail accepted the recommendation and agreed to meet with the Greater Wellington Regional Council to develop a long-term strategy for improving the safety of the track and signalling infrastructure.
That included providing better recognition of signals, standard procedures for signalling trains through the area, better communication between train drivers and people controlling the trains.
KiwiRail, the council and Transdev Wellington are co-operating closely on operating and strategic matters, as required by a memorandum of understanding between the three organisations.
KiwiRail are in agreement to conduct a review of current arrangements to identify opportunities for attempting to reduce the risk to train operations in the Wellington station area.