Maintenance costs double for KiwiRail’s ageing Cook Strait Interislander ferries

Estimated annual maintenance costs to keep KiwiRail’s three ageing Interislander ferries running could almost double to $65 million by next year, and keeping the ferries afloat will be an “ongoing battle”.

A previous assessment of the fleet’s condition raised concerns about steel corrosion, metal getting weak and cracking, and prohibitive maintenance expenses.

The project to replace the fleet with two mega ferries was left dead in the water in December after overall costs, including new terminals and wharf upgrades, ballooned to almost $3 billion and the new Government refused to fund the blowout.

Finance Minister Nicola Willis has previously refused to commit to replacing the fleet by 2026, which is when the now-cancelled mega ferries were due to arrive.

Given the project’s history of delays, budget blowouts, and other problems, Willis said people were “dreaming” if they thought the mega ferries would be up and running with the necessary port development in place by that time.

A Ministerial Advisory Group is looking into new options for the future of the ferry service.

The 2021 detailed business case for the mega ferry project paints a challenging picture of the reality KiwiRail will be up against while attempting to keep its ships in shape for longer.

“The cost of maintaining the current fleet is becoming prohibitive,” the report said.

It cost $33m to maintain the fleet in 2021/22.

KiwiRail estimated the annual maintenance cost would almost double to $65m if the existing fleet is required to continue across 2025-2030.

“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,” the report said.

“Ships’ lives cannot be extended in perpetuity. Rust and obsolescence of systems means the ships will ultimately lose their maritime ‘warrant of fitness’ and have to stop operating.”

Finance Minister Nicola Willis has previously refused to commit to replacing the Interislander fleet in some shape or form by 2026. Photo / Mark Mitchell

The Herald asked KiwiRail for updated estimated maintenance costs but none were available.

Interislander executive general manager Duncan Roy said the cost of maintaining the fleet is commercially sensitive - however, it was expected to rise as the ships age.

“KiwiRail will continue to run a safe and reliable Interislander service for passengers and their cars, and freight, while working with stakeholders on the ferry replacement project,” Roy said.

The mega ferry business case specifically addressed the physical condition of the Interislander fleet and said KiwiRail was “pushing right up against an unacceptable risk profile”.

There were concerns about the corrosion of pipes, deck plates and tanks due to the harsh marine environment. An example was given of $300,000 being spent on repairing just one small section of pipe.

“A major issue faced with the fleet is corrosion in pipework and exposed decks, which Interislander is dealing with at dry dock, but [which] will be an ongoing battle up until the ships retire from service.”

Repetitive vibration caused by mechanical equipment and heavy seas would eventually cause the metal in key parts of the ships to become weak and crack, the report said.

“Sometimes this can be very sudden and unexpected.”

Estimated annual maintenance costs to keep KiwiRail’s three ageing Interislander ferries running could almost double to $65 million by next year. Photo / Mark Mitchell

The electronic systems that control critical systems on the ships become unsupported by their manufacturers and it is impossible to get replacement parts, the report said.

“Many systems now also lack internal knowledge as staff will have retired, which is just as important as the parts themselves.”

As the fleet ages, regulatory inspections become much more detailed and stringent, meaning the ships could be out of service for longer periods of time, the report said.

“On top of being very expensive and uneconomical, at worst, the regulator may prevent the ships being used for operations.”

KiwiRail’s most recent half-year report said its leadership team was committed to safety and service reliability for customers.

This was shown by Interislander’s determination to move on from the incident when its ferry Kaitaki lost power in Cook Strait with 864 people on board and started drifting towards the South Coast, the half-year report said.

“The safe and reliable operation of the Interislander service is an absolute non-negotiable requirement for KiwiRail. Since this event, we have conducted a full review of all our asset management practices, using global maritime experts (Det Norske Veritas) to ensure we are operating the Interislander to [the] world’s best-practice standards, based on the age and condition of our existing fleet.”

Roy said the three ships were the workhorses of Cook Strait.

“They have delivered excellent performance in recent months, with our enhanced maintenance programme producing tangible results, with 99 per cent reliability and 92 per cent safe, on-time performance to schedule during December to April.”

KiwiRail told Transport Minister Simeon Brown in a weekly report from earlier this year the investment in maintenance has helped rebuild confidence in Interislander.

The state-owned enterprise also told Brown Interislander passed its annual Maritime New Zealand (MNZ) audit with excellent results and its operating licence was renewed.

“Just over a year ago, our MNZ audit found nine non-conformities (some major) and 13 observations. A year later and we have recorded zero non-conformities and four observations. This is an exceptional outcome and has come about through a lot of hard work at many levels.”

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.