Winston Peters woos jilted Interisland ferry builder Hyundai with Korean War talk

Rail Minister Winston Peters on his way into the House. Photo / Mark Mitchell

• Winston Peters highlighted New Zealand’s historical ties with Korea in talks with Hyundai Mipo Dockyard.
• Hyundai’s contract to build Interislander ferries was cancelled after the Government declined extra funding in 2023.
• Hyundai is still in talks with KiwiRail and may be considered to build the ferries under the Coalition.

Minister for Rail Winston Peters drew on the history of New Zealand’s ties with Korea, including the Korean War and the Asian financial crisis during the 1990s, in his talks with jilted Interisland ferry builder Hyundai Mipo Dockyard.

In Question Time, Labour’s transport spokesman Tangi Utikere asked Peters whether the Government had given any assurances to Hyundai it would not cancel a new contract to build the ferries – after the Government’s decision to decline extra funding in 2023 effectively led to the cancellation of the contract that had been inked under Labour.

“I reminded Hyundai that in 1950, when their country was under attack, my country came to their aid; when their currency collapsed in 1997 under the Asian financial crisis, my country was one of the nine that underwrote its currency,” Peters said.

“It’s a thing called respect and gratitude, and that he could go forward in the future and trust my country and me,” Peters said.

New Zealand sent troops to Korea during the Korean War, a deployment that lasted from 1950 to 1957. The cold conditions also created the conditions for a massive wool price boom that lifted the New Zealand economy.

Hyundai had been contracted to build new Interislander ferries under the previous Government, but KiwiRail cancelled that contract after the new Government took office and declined to increase the project’s budget. While the ferries themselves cost $551 million the cost of landside infrastructure to accommodate them had seen the total cost of the ferry project blow out to an estimated $3 billion.

Hyundai is still in talks with KiwiRail over the break fee on that original contract.

At the same time as exit negotiations are being undertaken, Peters confirmed on a trip to South Korea last week that Hyundai Mipo Dockyard may be in the running to build the ferries under the Coalition, which is asking for expressions of interest from shipbuilders. He met with Hyundai last week and described the meeting as “excellent”.

“I’ve got a serious contender back in the ring of potential contenders for the tender for two replacement ferries for the Cook Strait,” Peters told RNZ.

The Government has promised a “framework” for the next steps by the end of this month.

Shipbuilders from around the world have been invited to express interest in the project. These expressions will be narrowed down and a request for proposals will be issued.

By the end of the year, a winning proposal will be chosen.

The Government is also open to alternative proposals.

BusinessDesk reported the Government’s procurement website, GETS, had sought bids from maritime lawyers to help manage the “Request for Proposals” stage.

Treasury’s request said up to six shipyards were expected to be invited to take part and the maritime lawyers would be needed to assist with contract and commercial evaluations, conduct risk analysis and manage the transaction and completion process, among other things.

Treasury made it clear that, if the RFP phase happened, it didn’t necessarily mean Ferry Holdings, the company set up to procure the new ferries, would enter into a shipbuilding contract, BusinessDesk reported.

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.