THE NEW ZEALAND Government’s decision to effectively delay the KiwiRail Cook Strait ferry replacements until 2029 goes against the recommendations of its independent Ministerial Advisory Group, leaks indicate.
The Government cancelled the iReX project this time last year, citing an unacceptable blow-out in the total cost of new rail/ro-paxes and associated port and terminal infrastructure to NZ$2.3 billion. Twelve months on and KiwiRail is still negotiating to exit its NZ$550 million fixed-price contract with Hyundai Mipo Dockyard.
The government appointed the MAG in February this year to recommend cheaper alternatives to iReX and the three-man group handed up its very detailed findings in June. But only last week did the Government reveal its intentions (DCN 11 December).
According to excerpts of the report obtained by NZ media the MAG offered a number of considered options, which included options of design, builder, price and delivery date.
The report obtained by Stuff shows ministers missed the recommended July decision deadline, along with the recommended October contract deadline, and the government’s new estimated delivery date of 2029 is at least a year later than its expert group advised was possible.
Ministers were provided a commercially confidential list of indicative ship prices and potential delivery dates, Stuff reported. The cheapest option was NZ$282 million per ferry with delivery dates of September 2027 for the first vessel and December 2027 for the second while the most expensive option listed was $688m per ship with both to be delivered in the second half of 2028.
The Government has set aside $900 million in total and has apparently accepted advice the existing vessels Interisland Line Cook Strait vessels can continue operating safely and reliably until 2029, despite explicit MAG advice the only rail-enable vessel, Aratere, cannot remain in service that long.
A well-placed source described the Government’s decision as “disgraceful”. “It’s like being told you need a heart bypass but you’ll take your chances on postponing it for five years,” DCN was told.
