An in depth look at KiwiRail's new Interislander ferries. Video / iRex
OPINION
Designs for Interislander’s new ferry terminals are being refined and reviewed amid rising costs and resource pressures.
The details of this process are being kept behind closed doors with Official Information Act (OIA) requests hitting brick walls and other questions being left unanswered.
KiwiRail is also reviewing all aspectsof its iReX project to make sure costs are being managed prudently.
iRex stands for Inter-island Resilient Connection project.
It’s the project in charge of delivering two new mega ferries to replace Interislander’s current vessels as well as redeveloping the ferry terminal precincts in Wellington and Picton.
The project was last estimated to cost $1.45 billion.
These new ferries couldn’t arrive fast enough after the realities of Interislander’s ageing fleet were laid bare during Kaitaki’s mayday call in January, its subsequent gearbox problem, and the ensuing service cancellations.
But it’s not the arrival of the new ferries in 2025 and 2026 (for which a $551m contract has been signed with a South Korean shipyard) that’s of concern.
It’s the associated landside infrastructure being built here in New Zealand that appears to be under pressure.
This infrastructure includes wharves, seawalls and parking, through to the new passenger terminal buildings themselves.
In a February 2023 briefing to the incoming Minister for State Owned Enterprises Duncan Webb, Treasury officials said the project was at a critical phase.
This was as the scope and projected cost of the works were being finalised for the landside infrastructure, the briefing said.
KiwiRail was scheduled to write to ministers that month with an update on progress, costs and proposed funding arrangements.
“Any cost increases may put pressure on current funding arrangements, noting that the Crown has already committed to provide significant funding support to KiwiRail for the project,” Treasury officials said.
The Government has contributed $435 million to the project.
The Herald requested a copy of the update KiwiRail sent to Ministers under the OIA but it was withheld in full along with a relevant Treasury report.
Reasons for withholding the information included protecting KiwiRail’s commercial position and maintaining the effective conduct of public affairs through the free and frank expression of opinions.
However, when Treasury’s 2023 Budget Economic and Fiscal Update was published in May, iReX was listed as a new risk.
Questions have been raised about the physical capability of two harbour tug boats to assist an Interislander ferry when it issued a mayday call in Cook Strait. Photo / Mark Mitchell
The update said estimates for the landside costs have “increased significantly” since initial funding was committed.
The Herald asked KiwiRail under the OIA how many different designs for the landside infrastructure were drawn up during the concept design stage, how much each design cost, and which firms they were designed by.
A detailed explanation of the material differences between early designs and more recent ones was also requested.
KiwiRail also declined to release this information as decisions on the iReX project were still under active consideration by ministers.
But iReX project director David Warburton did say designs were being reviewed.
“The team has been working through the various stages of design refinement as would be expected with a project of this size. This design review and refinement process is in progress and will continue.”
Warburton said further engagement with the Government was required before the review is concluded.
“Like many large and complex projects, iReX is working in an environment of rising cost and resource pressures including significant inflationary escalation in material and labour costs, alterations in climate change and seismic specifications and building code revisions, all of which the project is working to address.”
He would not elaborate on exactly what engagement with the Government was needed before the review could be completed.
KiwiRail is also reviewing all aspects of the project to ensure costs were being managed “prudently” while delivering the benefits expected from it, Warburton said.
A Capital Letter asked Warburton whether the landside infrastructure was tracking to budget and would be delivered on time.
He said the reviews were being worked through to finalise budgets and ensure the necessary infrastructure is in place when the new ferries are delivered.
“This is one of the largest and most complex construction projects in New Zealand, covering construction on land and in a marine environment, as well as catering for ship, road and rail transport and that complexity is reflected in [the] detailed design and review process we are working through with our funders and partners.”
It’s these words which are perhaps the most concerning in my view.
You don’t have to look very far in this country to see examples of other large and complex construction projects which are either behind schedule or over budget or both. This is not a problem unique to KiwiRail.
Think Auckland Light Rail, City Rail Link, or the NZ Upgrade Programme roads.
It doesn’t exactly fill you with confidence, does it?
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