The Government has established a new company to procure replacement ships for KiwiRail’s ageing Interislander ferries today. Video / Mark Mitchell
Opinion by Georgina Campbell
Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.
A new company is being set up to procure two new ferries, larger than Interislander’s current ones butsmaller than the mega-ferries, which will begin operating in 2029. Deputy Prime Minister and New Zealand First leader Winston Peters has also been appointed Minister for Rail.
The new ferries haven’t been ordered, there’s no shipbuilder and there’s no final cost.
It makes one wonder what on earth the Government has been doing for the past year, especially because even these vague details aren’t set in concrete.
The Government is inviting the private sector to submit alternative proposals for a ferry service in case there’s a better idea floating around.
Finance Minister Nicola Willis maintains she has “delivered” but this is probably not what most people had in mind.
Finance Minister Nicola Willis and newly appointed Minister for Rail Winston Peters during their press conference on Wednesday. Photo / Mark Mitchell
As for the Government’s message to those people who might be disappointed in today’s announcement, Peters referenced a song by Little River Band: “Hang on, help’s on its way.”
The problem is that uncertainty over Cook Strait has already dragged on too long and now it feels like it’s back to square one but with a back-up plan in place.
The only reassurance is that Willis is confident this fallback position can be executed quickly if no one has any better solutions.
While it might not look like it, a lot of work has been going on behind the scenes since the mega-ferries were cancelled.
Willis said extensive due diligence has been undertaken in recent months with various shipyards around the world to understand the maximum cost of the new ferries.
“We have taken enough soundings to be assured that there are both slots for the building of ferries and that they would be deliverable on time,” she said at today’s press conference.
“And we’re not excluding any shipyards at this point from the ability to tender for those ships.”
Interislander's existing fleet of three ships will reach the end of its working life in 2029. Photo / Mark Mitchell
The Government has established a funding envelope and expects the costs will be “much less” than the mega-ferry project, which had ballooned to $3 billion.
It’s understood the expected portside costs would not break the Government’s funding envelope when added to the maximum price of the two new ferries.
Ministers are asking the Government to trust them that this project will be cheaper than the mega-ferries.
They will not disclose any costs after receiving advice as this would essentially invite those tendering for the work to climb to that number.
Willis hopes the total cost will be cheaper than the funding envelope they have set aside.
These ferries would begin operating in 2029, which is when the existing fleet will reach the end of its working life.
Happily for the Government, this timeline is possible after KiwiRail received new advice from global maritime experts that the fleet’s life could be safely extended.
This is after the business case for the mega-ferries said: “The existing ferries will reach the end of their serviceable and economic lives by the mid-2020s and will become increasingly unreliable and costly to maintain.”
But there is a three-month window before the Government hits go on this option.
This is the chance for the people who think they could do a better job than the Government to put their money where their mouths are.
KiwiRail's two mega-ferries were cancelled after the overall costs for the project ballooned to $3 billion. Image / KiwiRail
One of the biggest lingering questions (there are many) is why this didn’t happen in the past year.
Willis says they want to make sure they have fully explored the implications of the decision Cabinet has made so as not to repeat the mistakes of the last Government, which “ran blindly into one cost blowout after the other”.
The Government’s Plan B is certainly a better benchmark than the eye-watering mega-ferry project that makes anything look good in comparison.
Maybe there will be no viable alternative options from the private sector and in just a few months the Government will place an order for the two new ferries and that will be that.
In the grand scheme of things, a few months is probably immaterial.
However, the optics are bad.
Not having a plan locked in an entire year after pulling the plug on a project that would have secured the future of a critical supply route and notorious stretch of water is far from ideal.
The ball is now in Peters' court as Minister for Rail.
