New rail-enabled ferries were due to be delivered in 2026 after the then-Labour-New Zealand First coalition struck a deal in 2018 for two mega rail-enabled ferries to be built in Korea.
The bigger ships meant new port infrastructure was required and the original price tag of $700 million rose to $3 billion by the time the new Government was sworn in.
While the mega ships don’t come cheap, it was the work required to make them fit in New Zealand ports that blew the budget, Finance Minister Nicola Willis said.
The project to replace the Interislander ferry fleet, iRex, was cancelled by the coalition in December after it declined KiwiRail’s request for further funding.
KiwiRail had requested a further $1.47b, a component of which had been agreed to in principle by the previous Government, to address cost escalations related to associated harbourside infrastructure in Wellington and Picton, including to accommodate new larger ferries.
KiwiRail's Interislander fleet is ageing. Photo / Mark Mitchell
Asked on Tuesday whether the ferries the coalition is set to announce will be cheaper than Labour’s iRex project, Christopher Luxon told Morning Report, “yes they will”.
He refused to go into any further details, however, saying the public would have to “wait until the formal announcement where all the detail will be revealed”.
That announcement is expected to be on Wednesday – the deadline set by Deputy Prime Minister and New Zealand First leader Winston Peters for the alternative ferry plan to be made public.
NZ First has long campaigned for the ferries to continue to have rail enablement.
On Monday evening Labour leader Chris Hipkins said he understood the new ferry project involved smaller boats that don’t have rail capacity, and will cost more than what Labour had projected.
He said Willis' announcement this week will make her “look particularly stupid”.
KiwiRail bosses last week in a scrutiny hearing confirmed the iRex contract had been cancelled, but warned costs were yet to be settled and negotiations were set to drag out into next year.
That cost will only add to the final bill for cancelling and replacing the previous project – unless the same company has been negotiated with for the coalition’s alternative plan.
The company in February confirmed to the Government it was in the process of terminating the contract and the Korean company had been advised to stop all ship design and production.
- RNZ
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