AS MORE revelations emerge about aspects of owner KiwiRail’s management of the nation’s Cook Strait ferry company the NZ Government is using careful language in responding to calls for the privatisation of Interisland Line.
Finance minister Nicola Willis – who cancelled the iReX ferry replacement project last December after a major budget blow-out – has expressed disgust at the reported but unconfirmed NZ$8 million KiwiRail paid consultants McKinsey to undertake a strategic review.
Ms Willis questioned why KiwiRail’s ‘well-paid executive’ wasn’t able to do the core business of ensuring it was running efficiently: “I was immediately concerned by the magnitude of this cost. I view it as excessive and not justifiable.”
NZ media has noted that while prime minister Christopher Luxon and other senior ministers have asserted there are no current plans to separate Interisland Line from KiwiRail nor privatise it, neither have they definitively ruled these moves out.
The three-person independent Ministerial Advisory Group, appointed in February to advise on affordable replacement ferries, handed its report to government a week ago and the government is expected to unveil its key recommendations next week.
KiwiRail is still in negotiations with South Korea’s Hyundai Mipo Dockyard over the cancellation fee for the two iReX newbuildings, which were contracted at NZ$550 million and finally terminated in February under government direction.
There is speculation the cancellation penalty could be as high NZ$300 million given key components had already been acquired and tested, or HMD could be appointed to build the expected-to-be-more-modest replacements recommended by the MAG.
Meanwhile, following its Friday night grounding near Picton and Saturday night refloating Interisland’s rail/ropax Aratere was moved on Monday afternoon from the Picton ferry terminal to free up a berth. It was shifted to a log export wharf in Shakespeare Bay and remains under repair and MNZ detention. Apparently well-informed social media sources have attributed Aratere’s steering failure to a failed pinion shaft in the steering gearbox.
