KIWIRAIL has assured the NZ Government it no longer expects maintenance costs for its three aging Cook Strait ferries to reach almost NZ$65 million per annum, despite expectations expressed in its own 2021 business case for new ferries.

In documents detailed by the NZ Herald’s Georgina Campbell, KiwiRail warned that the existing ferries would reach the end of their serviceable and economic lives by the mid-2020s and would become increasingly unreliable and costly to maintain.

“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,” KiwiRail had stated. At the time the annual maintenance bill was running at $31 million per annum.

The business case 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.”

The electronic systems that control critical systems on the ships become unsupported by their manufacturers and it is impossible to get replacement parts, the Herald reported the assessment as saying.

“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 has declined to provide an update estimate of maintenance costs for commercial reasons but in a meeting with transport minister Simeon Brown yesterday [18 June] assured the figure would not reach $65 million, despite enacting a far more rigorous program of work on all vessels under the guidance of Det Norske Veritas.

At a Transport and Infrastructure Select Committee meeting in Wellington today [21 June] minister Brown said the incoming Nationals had been “highly unimpressed” with KiwiRail’s maintenance of the Cook Strait fleet since coming into office.

In December last year finance minister Nicola Willis cancelled the iReX project that would have seen two new vessels in service by 2026, citing massive cost over-runs for replacement port/terminal facilities.

KiwiRail is still negotiating with Hyundai Mipo Dockyard over the cost of cancelling the newbuild orders, for which major components had already been built and tested.