ℂ𝕙𝕒𝕝𝕝𝕖𝕟𝕘𝕖 𝕥𝕠 𝕎𝕚𝕝𝕝𝕚𝕤’ 𝕔𝕠𝕤𝕥𝕚𝕟𝕘𝕤 𝕠𝕟 𝕤𝕙𝕠𝕣𝕚𝕟𝕘 𝕦𝕡 𝕚𝕟𝕥𝕖𝕣-𝕚𝕤𝕝𝕒𝕟𝕕 𝕤𝕖𝕣𝕧𝕚𝕔𝕖

InterIslander ferry 'Aratere' departs Picton. passing National Geographic research vessel 'Orion'

𝕋𝕙𝕖 𝕗𝕚𝕟𝕒𝕟𝕔𝕖 𝕞𝕚𝕟𝕚𝕤𝕥𝕖𝕣 𝕋𝕣𝕚𝕔𝕠𝕝𝕒 𝕎𝕚𝕝𝕝𝕚𝕤 𝕚𝕤 𝕤𝕦𝕣𝕖 𝕒𝕝𝕥𝕖𝕣𝕟𝕒𝕥𝕚𝕧𝕖 𝕡𝕝𝕒𝕟𝕤 𝕗𝕠𝕣 𝕚𝕟𝕥𝕖𝕣-𝕚𝕤𝕝𝕒𝕟𝕕 𝕣𝕖𝕤𝕚𝕝𝕚𝕖𝕟𝕔𝕖 𝕨𝕚𝕝𝕝 𝕔𝕠𝕤𝕥 𝕝𝕖𝕤𝕤 𝕥𝕙𝕒𝕟 𝕥𝕙𝕖 𝕟𝕠𝕨 𝕕𝕖𝕗𝕦𝕟𝕔𝕥 𝕚ℝ𝕖𝕏 𝕡𝕣𝕠𝕛𝕖𝕔𝕥 – 𝕓𝕦𝕥 𝕠𝕥𝕙𝕖𝕣𝕤 𝕒𝕣𝕖𝕟’𝕥 𝕔𝕠𝕟𝕧𝕚𝕟𝕔𝕖𝕕

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op brass at KiwiRail say it’s disingenuous to quote the final Inter-island Resilient Connection – iReX – figure as a “quadrupling” of the original estimate.  

Chief executive Peter Reidy and chair David McLean were at pains to point out to Parliament’s transport select committee that the starting point of $775 million, which dated back to the indicative business case made in November 2018, was unfair. 

“You’d be better to start at the detailed business case,” MacLean said. 

“Before that it was just a random number, a pie in the sky.

“My point is at that stage location hadn’t been identified, but carry on,” Reidy added.  

However, it’s a line Finance Minister Nicola Willis repeated only two hours later, comfortable with the rationale to effectively scrap the project by refusing further Crown funding. 

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“That project had blown out completely and quadrupled in cost and in my view it would keep blowing out in cost. There were massive delivery risks. I don’t think those ships would have been up and running on time. I think we made a good decision,” she said. 

The hapless @nicolawillismp is blinded by her extreme right-wing ideology and facts make no difference to her stupidity. She is stuffing the main transport/freight link between islands bc of her high-handed arrogance and wanting to fund landlords wealth https://t.co/wn98AqI7Wc

— iNeanderthal (@PublicationsPro) February 16, 2024

The final cost estimate was $3 billion at the end of November – double the cost from when the detailed business case was developed in June 2021. 

In December Willis confirmed the Crown would not provide the extra $1.4b required since that date. 

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As a result, KiwiRail this week confirmed it would be terminating the the contract signed in June 2021 with Hyundai Mipo Dockyard for the two new ships it had procured.

The two rail-enabled ferries would have tripled rail freight capacity, and would be able to carry nearly double the number of passengers compared with the current fleet. 

The commercial opportunity was a critical part of KiwiRail’s quest for financial sustainability, with Reidy repeating to MPs this was about allowing KiwiRail to grow. 

Willis, not convinced by that, described it as a “pet project”.

“You know, what’s in the best interests of KiwiRail may not be the same thing as what’s in the best interest of New Zealanders and it’s our job on behalf of taxpayers to think about New Zealanders as a whole, not just KiwiRail.”

As at December 31, 2023, KiwiRail had spent $424 million on the iReX project, not including contract break fees for the ships and other costs, with approximately 150 other contracts to cancel. 

It may also need to undertake remediation works in Picton where there had been plans for an overbridge on Dublin Street. A decision on whether the New Zealand Transport Agency may pick this up has yet to be made. 

Until that happens, Marlborough Mayor Nadine Walker describes the site as a “sea of road cones”.

“There’s quite a lot here to be unravelled,” she said. 

But with the Interislander fleet all coming towards end of life (Aratere and Kaiarahi were built in 1999 and Kaitaki was built in 1995), KiwiRail has a much larger task at hand – finding different, suitable vessels, something McLean said would not be straightforward.

Reidy added there were only 22 second-hand ships worldwide that would be suitable to sail the Cook Strait, and none were currently for sale.  

The ferry deal being cut would never be struck again – the cost of procuring the same ships would today cost as much as 40 percent more than the fixed price agreed to in 2021.  

Aside from the ships, Reidy said the terminals in both Wellington and Picton still needed work.  

“The terminals have to be built. New Zealand has to find a solution. Port of Marlborough wharf has probably got about two to three years left; it is in a very end-of-life state. You talk to Centreport, there’s work they’ve got to do as well.” 

Port Marlborough chief executive Rhys Welbourn later told Newsroom the maintenance programme would be reviewed to ensure reliable service for at least another five years.  

“Which, following the comments made today in the hearing, we understand will be some years beyond the life of the current Interislander fleet.” 

The cost escalation for the Wellington terminal was mostly to blame for the project’s blow-out given its location in a high-risk seismic area, something Reidy said only became apparent once the project could progress and further work could be done. 

Despite the explanation, a ministerial advisory group is now tasked with reconciling a plan B. 

The group was confirmed on Thursday and will include former general manager of both the Interislander and Centreport Mark Thompson, Mark Cairns who sits on various transport boards and former National Party minister Roger Sowry.

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But Green Party transport spokesperson Julie Anne Genter said there was no way another option to do all that was required would cost less. 

“There’s no time like the present, it’s going to cost less to carry on with the project as it is now, than to kick it down the road another few years. 

“I think that it’s highly unlikely we’re going to get reliable secondhand ships that have the capability and capacity to ensure that we have frequent and sustainable rail connection for freight between the two islands.” 

But Nicola Willis said there were options. 

“There are a number of shipping firms around the world who do have ships. There are lease options, there are buying options, there are secondhand options and that’s why we’re appointing a ministerial advisory group to put all of those options on the table for us.

“I’m confident we’ll get a better result for taxpayers, and a better result for ferry users … That’s why I’m appointing a ministerial advisory group so it’s not just KiwiRail giving me views on this.” 

She said the advisory group would also explore which other groups should be responsible for paying for upgrades to port infrastructure.

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