Finance Minister Nicola Willis insists the Interislander ferries will continue into the future, even as she’s sunk KiwiRail’s hopes of a “once in a lifetime” project to ensure the service’s longevity.
Willis announced the Government would not fund the “iRex” cost blowout to $3 billion, which would have seen major development at the ports of Picton and Wellington, as well as the purchase of a new fleet of ships to carry passengers, trucks, cars and trains. The first ship was set to be launched in January 2025.
But KiwiRail chairperson David McLean said the iRex project was over following Willis’ Wednesday announcement. The state-owned enterprise would instead look to exit its contracts and wind up the project, but may need to buy the ships regardless – and then find a new buyer.
The new ships and berths were meant to improve the reliability, efficiency and sustainability of the Interislander ferry service.
The KiwiRail fleet is ageing, increasingly expensive to maintain, and prone to breakdowns.
McLean said it would take “years” to develop a Plan B.
What are the options now for Cook Strait crossing planners?
Lease someone else’s ships
KiwiRail chief executive Peter Reidy said the organisation would consider if it needed to lease smaller ships that would not require the same level of landside infrastructure development.
Of its three-ship fleet, KiwiRail owns just one rail ship, Aratere, which was purpose built for the Cook Strait in 1998.
Over the years, KiwiRail has leased and bought a number of ships – but these haven’t been able to carry trains.
Anthony Phelps/STUFF
The Interislander and Bluebridge ferries provide Cook Strait crossings.
Order smaller ships
Willis said it was a major issue that about 80% of the iRex cost was for landside development, such as building new terminals and loading yards.
To reduce that cost, she was asked if KiwiRail considered ordering smaller ships that could more easily fit into the existing infrastructure. She said those options “have been floated”.
Build a bridge
The idea of a Cook Strait tunnel or bridge has been floated for decades. But if money is the issue sinking the iRex development, then a bridge won’t fly.
In 2018, a Stuff investigation found it would cost about $40 billion to tunnel the Cook Strait.
ROBERT KITCHIN/The Post
Finance Minister Nicola Willis says the iRex project has overblown its budget.
Leave it to business?
The Government could decide not to intervene or fund any Cook Strait development. As Willis noted, “there’s already a competitor on the Cook Strait, being the Blue Bridge theory”.
But she said there was a case to invest in landside infrastructure which more than one company could use.
“I see that there will continue to be a case for public investment in ferry services,” she said.
How far that investment could stretch remained unclear.
“Our coalition Government is committed to having a resilient, safe, and reliable Cook Strait ferry service, but that cannot mean that we have an open chequebook to provide whatever is asked in whatever circumstances,” Willis said, during a debate about the Interislander project in Parliament.
Look for a private investor?
The Government could look to a private company to invest in the Interislander’s new ships. This could take the form of a private public partnership (PPP) or partial privatisation of KiwiRail’s ferry operation. The Government has not indicated, at this stage, that it is considering these options.
