Mostly it's a consequence of population density. There's just not enough large cities close together.
I think it's probably also correct to say that New Zealand could sustain a larger passenger rail network if made the right investments. For example, Auckland <-> Hamilton <-> Tauranga could profitably support at least a few trains per day in each direction... _if_ it was electrified, with passing loops where needed, and with well-sited stations, and with the ability for trains to run into Britomart or at least Newmarket (both being stations close to central Auckland). However, there's a chicken and egg problem: unless you make investments like that, the service you can offer will be pretty crap and no one will want to ride your slow trains.
Mostly it's a consequence of population density. There's just not enough large cities close together.
I think it's probably also correct to say that New Zealand could sustain a larger passenger rail network if made the right investments. For example, Auckland <-> Hamilton <-> Tauranga could profitably support at least a few trains per day in each direction... _if_ it was electrified, with passing loops where needed, and with well-sited stations, and with the ability for trains to run into Britomart or at least Newmarket (both being stations close to central Auckland). However, there's a chicken and egg problem: unless you make investments like that, the service you can offer will be pretty crap and no one will want to ride your slow trains.