KIWIRAIL’s new Cook Strait rail/ro-pax ferries will cost no more than NZ$596 million and the total project will come in under $2 billion, according to the New Zealand Government.
Giving a typically pugnacious speech in Wellington yesterday deputy PM and rail minister Winston Peters addressed rail and maritime unions, iwi, and the chairs, chief executives and team members of CentrePort, Port Marlborough, and KiwiRail to say “These ferries are for all New Zealanders, and we appreciate the support for commonsense.
“These teams picked up a clarion call for fiscal discipline, without compromising on the ships and infrastructure New Zealanders want and need,” Mr Peters said.
“At our behest, and then with Cabinet’s support, we safeguarded the long-term future of the Interislander, preserved rail on the Strait, and saved the taxpayer billions. In fact, we have saved the taxpayer $2.3 billion.
“The programme will be less than $2 billion, but the taxpayer contribution is within the $1.7 billion Cabinet allocated when we started our no-nonsense ferry solution.
“That is $2.3 billion less than the $4 billion cost explosion Treasury warned of in 2023, after project managers pushed egregious, wasteful and unnecessary scope into the infrastructure programme.
“And before the apologists start saying the cancelled ferries would have been here in 2026. No major construction contracts were entered under iReX, but they still said they could complete work in 2026 within two years. They were in La La Land.”
Mr Peters drew a comparison with TT Line’s travails, saying “We would have ended up, as they have in Tasmania, where ferries arrived long before the infrastructure was ready. The Tasmanian Devil was in the detail all along.”
“We will rebuild the marine infrastructure in Picton and Wellington but keep the assets that still have life left in them, and make use of the yards, buildings, and road and rail infrastructure. That saves billions.
“We know this will work because the idea came from the ship masters’ union and has been assiduously tested by the ports; people in the practical business of ship and freight movement, not boffins and bean counters,” Mr Peters said.
The minister stressed Interislander is a commercial business operating in a competitive market. Funding put in by the ports and Ferry Holdings will be recovered over the 30-year life of the ferry and infrastructure assets, through port fees paid by Interislander revenue. Interislander revenue will also need to build sufficient reserves to buy new ferries in thirty years.
“We are buying exactly the type of ferries people want: big enough to carry freight and families for the next 30 years, designed for comfort and freight capacity, and meeting modern safety requirements.
“And the fixed price for these two ferries is $596 million, just a fraction more than the cancelled ferries with its famously good price – not hundreds of millions more as the naysayers have been shouting for months and months.
“We have also secured a ship builder of serious quality. Guangzhou Shipyard International is the largest modern integrated ship building enterprise in Southern China. They received the highest overall rating through Ferry Holdings’ competitive tender process, impressing with their technical expertise and ability to deliver on time and on budget.
“Next week, we will travel to Guangzhou with the Ferry Holdings Chair and Ships Programme Director to acknowledge this significant agreement, not just between the shipyard and Ferry Holdings but also as a significant contribution to economic relations with China.
“Despite the risible attempt to turn iReX into a pathway to prosperity for the consultant class, hijacking a project founded on prudency in 2020; we saw through them, we kicked them out, and we took control again.
We saved $2.3 billion in the process, retained rail ferries, and have now secured the ferry contract and the path to completion in 2029,” Mr Peters said. “We did what we said we would do.”