Interislander Replacement: Opposition 'Astounded', 'Disgusted' Over 'Omnishambles'

Thursday, 12 December 2024, 6:15 am
Article: RNZ

Russell Palmer, Political Reporter

Ferry replacement: Opposition 'astounded' over 'omnishambles'

The government's ferry announcement has done little to placate the opposition parties, even prompting calls for Nicola Willis to resign.

A year to the day after taking the decision to Cabinet to reject more funding for KiwiRail's iReX project, Willis stood alongside Winston Peters as he was named the new Minister for Rail.

She announced the other details of the government's new plan - at least, those details that could be announced.

This included setting up a new government-owned company to buy two new medium-sized ships to replace the ageing fleet of three ferries, one of which is able to carry trains. The ports will also be asked to bear more of the cost of the port build, which is what led to the cost blowouts of Labour's project.

And that's about it.

There is a funding envelope - but that's confidential, due to commercial sensitivity. It's unclear how much the new ferries will cost, how much the portside terminal construction will cost, and exactly when they will be sailing, though that is expected to be before 2029, when the old ships become defunct.

Whether the new ships can carry trains is also yet to be decided, as is whether KiwiRail will continue operating them.

The increased costs to the ports could mean increased costs for passengers and freight - again, unclear.

Opposition parties were unimpressed, to say the least.

National: 'No credibility from Labour'

Willis at her media conference was confident.

"I've delivered," she said.

Prime Minister Christopher Luxon said there was a "good solution in place and we're also allowing ourselves some time to see if we can improve further on it".

He said he could "absolutely" guarantee the total cost would be less than the $3 billion the government had said iReX would have cost.

Transport Minister Simeon Brown said he was "really looking forward" to working with Peters.

"It's great to have a plan in place, and a minister who's going to take that forward."

"I'm really looking forward to working with the Minister for Railways Right Honourable Winston Peters, he's going to do a great job.

"The reality ... if you go through a procurement process and you put the number out there, ultimately you can undermine your position. So we need to go through a sensible, sensitive commercial approach to this now, to get best value for money for the taxpayers of New Zealand."

He said Peters was now in charge of the project.

Paul Goldsmith had previously been a shareholding minister, as minister for state-owned enterprises, but will no longer be as Winston Peters takes responsibility for KiwiRail as minister for rail. He did not seem put out.

"It's fine, I've got plenty of other things to do, and so I'm sure Winston Peters will do a great job," he said. He was "absolutely" confident in Peters.

Hipkins: 'I was astounded'

Labour's Chris Hipkins said the decision to cancel the ship deal nearly a year ago had damaged New Zealand's international reputation and today's revelations were only an "announcement of an announcement".

"Nicola Willis still doesn't have any new ferries, still can't say how much it's going to cost, still can't say who's ultimately going to pay for it all. I think today's a hugely embarrassing day for Nicola Willis.

"We're now talking about potentially three or four years before we see any new Interisland ferries on the Cook Strait, we could have had new Interisland ferries on the Cook Strait the year after next, and unfortunately the decisions of this government means that's no longer possible."

He said the decision would end up costing, but the ferries were likely to be significantly more expensive and she was not being upfront with Kiwis about who would ultimately end up paying for the wharf and terminal upgrades.

"She seems to be saying that the port companies are somehow going to magic up the money to pay for that, and that that won't ultimately end up costing New Zealanders more."

It was "very unlikely" the decision to cancel the ferries would end up saving anyone any money, he said, and Willis was struggling to save face.

"I was astounded", he said, that after a year there was still "no more information about what they're actually going to do".

Luxon rejected those criticisms.

"No disrespect, but I mean, Labour, ah, it's just, there's no credibility from Labour on this. The project started off at $600 million or $700m, blew out to $3.2 [billion], on its way to $4b, they are economically illiterate ... so no disrespect but I take no lessons from Chris Hipkins.

"I just say to you when you have a funding envelope that starts at $600m and it turns into $3.2 [billion], we've seen that playbook. We saw it play out at Dunedin Hospital, we've seen it play out on ferries."

The Labour Party's media release was withering.

"This government is making decisions that will fail future generations. It talks about good infrastructure planning with one hand while running down our infrastructure just to make a political point with the other.

"Nicola Willis' legacy will be New Zealanders waiting years longer for smaller and lower quality ships and hiked costs to exit the existing contract. We are now at the end of the queue for new ships as procurement hasn't even started. 2026 should have been the year for the delivery of new ferries, instead this government's deal-making means we will have no ferries, just a big bill for the cancellation costs."

Willis 'should resign' - Greens

Greens Transport spokesperson Julie Anne Genter said a year on, the public was no closer to procuring new ferries.

"I think it's an omnishambles, Nicola Willis should resign over her catastrophic decision to cancel the ferries," she said. "Basically they're trying to pretend that they're making progress to cover up the fact they made a terrible decision last year."

She said the decision to cancel would end up costing the country $1b with nothing to show for it.

"I'm not sure what Minister Peters is going to be able to do because we have no money for the desperately needed investment in rail, because this government is wasting money on a bunch of highways."

She had heard suggestions the break fee for the shipbuilding contract could end up being well over $300m, she said.

Her written statement said the full cost to the country as a whole could run into the billions, "due to the pressure this piles on our freight system, and the damage to infrastructure by forcing more trucks onto our roads.

"By undermining rail and pushing more trucks on our road system, the government is creating more carbon emissions and further hampering our country's progress on meeting its international climate change commitments.

"The government has messed around for a year and still we have no clarity on what the actual ferry solution will be. No amount of window dressing by Nicola Willis will obscure the fact that Aotearoa New Zealand needs rail-enabled ferries."

ACT: 'Fraction of the price'

ACT leader David Seymour said the new deal would cost a "fraction of the price", and the option of private investment or a mixed ownership model remains on the table, "so I'm really actually quite happy with where we've got to".

"Fraction of the price, private money options are open, I think it's a very good design."

He said he believed retaining the ability for trains to go on the ships was unlikely, as it would add complexity and cost - with a lot of extra weight, and the need to ensure the carriages and freight aligned correctly.

"If you can find one for the price that we're prepared to pay, maybe - but I suspect that will be challenging."

His written statement celebrated costs saved.

"Taxpayers are the winner from today's Cook Strait ferry announcement ... this Government is committed to having a resilient, safe and reliable Cook Strait ferry service to support the movement of freight and people. ACT's focus in this process has been on valuing taxpayers and ensuring the government doesn't throw good money after bad.

"Indicative costings for the two new ferries and landside development are approximately half the at least $3 billion cost of iReX, of which the Crown was asked to fund approximately $2.2 billion."

He shared that information despite Willis' caution about disclosing costs. He also shared his hopes of privatising the service.

"The Schedule 4A model announced today allows for private investment, with the Crown able to sell up to 49 percent of its shareholding. Private investment will bring private market discipline which will lead to a better and more cost-effective service in years to come.

"ACT is making the government work smarter to do more with less, so Kiwis can keep more of their own money and build a better future for themselves and those they care about."

NZ First: 'Hitting the ground running'

Peters told reporters the announcement was great news for the public, and the benefits would be "very obvious as the ensuing weeks unfold".

"We'll be hitting the ground running, as I said. I've got a lot of people to talk to, and when we've done all the research we'll start unveiling the answers."

He refused to say whether he asked for the job of Rail Minister, but that he had been pleased to turn things around when he had the portfolio under the last Labour government.

Seymour's comments about the cost of the new ferry plan were unhelpful and inaccurate, he said.

NZ First Senior Minister Shane Jones, asked if the ferries would be delivered by 2029 said: "well, that's certainly the plan, hmm".

"I think it's important to keep the pressure and secure that kind of outcome, but in terms of the innards of the deal, go to my rangatira Winston Peters."

He was confident his boss would soon have answers.

"These are matters that are a little bit like a rolling maul, the ball will soon emerge."

Te Pāti Māori: 'Disgusted' it's taken so long

Te Pāti Māori co-leader Debbie Ngarewa-Packer said the announcement was more of the same from the government.

"They continuously establish entities and places for mates ... all they needed to do was get something out there that could go from one port to the other.

"Again, the government that doesn't want to see more bureaucracy and positions set up is going to do that all over again."

She said she was "really disgusted it's taken this long, there are people in the community that needed a solution yesterday."

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