ONE YEAR after cancelling KiwiRail’s iReX Cook Strait ferry replacement program the NZ Government has announced two new but smaller vessels will be built for 2029 delivery.
However, the government has not declared whether the replacement ships will be rail-enabled, and hasn’t ruled out a public-private partnership or outright private ownership. Instead it is establishing a new government entity to manage the acquisition.
And NZ First leader and deputy prime minister Winston Peters has taken on a new portfolio, Minister for Rail, and will oversee the project.
The government has declined to reveal the cost of the new ferries – “commercial confidence” – although NZ media had reported leaks suggesting NZ$900 million as the price tag. Under iReX the proposed new rail/ro-paxes were to be built by South Korea’s HMD for a fixed price of NZ$550 million, but costs associated with new terminal infrastructure at Wellington and Picton blew the expected total cost out to nearly $3 million.
This time the government has made it clear the respective port companies are expected to bear the cost of terminals, with that investment to be recovered from users.
While today’s announcement has been welcomed by KiwiRail and port companies as giving certainty to the situation, the broader reaction has been lukewarm at best with the sound of one hand clapping emanating from Transporting NZ, the Rail Advocacy Group, trucking and freight customers/companies, and Maori groups.
And there has been strident criticism from the government’s political opponents, who have slammed “a wasted year” that’s brought NZ no closer to Cook Strait service reliability.
[Finance minister] Nicola Willis has delivered a worse deal for the Cook Strait ferries that will end up being more expensive and take longer to arrive, the Labour Party said.
“For someone who rates their own fiscal management, Nicola Willis has botched the ferries deal,” Labour finance spokesperson Barbara Edmonds said. “She has taken a whole year to come up with smaller ferries that are going to cost the country more money in the long run. The portside infrastructure will still have to be built, she’s just burdening future New Zealanders with the cost.
“Nicola Willis came into Government and immediately rolled back the ferries deal with no plan B. It was a knee-jerk reaction and Kiwi companies and taxpayers will pay the price.
“This Government is making decisions that will fail future generations. It talks about good infrastructure planning with one hand while running down our infrastructure just to make a political point with the other.
“Nicola Willis’ legacy will be New Zealanders waiting years longer for smaller and lower quality ships and hiked costs to exit the existing contract.
“We are now at the end of the queue for new ships as procurement hasn’t even started. 2026 should have been the year for the delivery of new ferries, instead this government’s deal making means we will have no ferries, just a big bill for the cancellation costs.
“Cancelling the order for two rail-enabled Cook Strait ferries has already cost KiwiRail half a billion dollars in sunk costs and it will likely be hundreds of millions more to break the contract.
“Choosing to go ahead with ferries that are not rail-enabled would mean higher costs for ports, freight companies and consumers.
“Nicola Willis botched this deal from the moment she was in the captain’s chair. It was just the beginning of the poor choices she’s made over the past year,” Barbara Edmonds said.
Prime Minister Christopher Luxon say a procurement decision about the new vessels – of which no significant details have been released – will be made next March.
