Ferries' future on hold in Auckland after contracting flop

Tuesday, 15 January 2019

Plans to launch new ferry services throughout Auckland have been cancelled due to cost.

A bid to launch a new wave of Auckland commuter ferry services and the building of new boats has collapsed due to a lack of funding.

Auckland Transport has gone back to the drawing board after the unsuccessful, long-running tender process, and some operators fear ferry growth could be stalled for years.

The council agency said the costs proposed by ferry operators were double what it had expected.

One ferry operator said without new long-term contracts, no-one would build much-needed new ferries.

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Ferries carry only about 7 per cent of Auckland's 92 million public transport trips a year but are touted as a mode with great potential to reach new suburbs without the risk of congestion.

Ferry patronage declined slightly in the past year and grew only 9 per cent between 2015-18 – about half of the overall rate of growth for public transport.

Ferries carry about 7 per cent of Auckland's total public transport trips.

It is an expensive mode of transport, with a new vessel costing $4-5 million and a limited number of operators with deep-enough pockets to invest large sums.

Destinations need deep-enough water and purpose-built wharves that can cost millions of dollars.

Subsidies are expected to reach $10 per ferry trip this year, compared with $3.75 for a rail trip and $2.65 a bus trip.

Auckland Transport had sought bids two years ago for an ambitious plan that required operators to build some new boats, of a size that it determined, and run more frequent services.

A decision was initially planned for March 2017, but struggled on until August 2018 when Auckland Transport canned it, saying the bids were unaffordable.

'I think we'll go backwards for a couple of years despite everyone's best intentions,' Mike Horne, the chief executive of Fullers, told Stuff.

Another industry source said ferry services had been neglected for two years with investment decisions on hold pending new long-term contracts.

Auckland Transport said it would be taking a shorter-term approach with the next step.

'We will now negotiate with current operators to extend contracts – a 3- to 4-year extension, to investigate ideas in our draft (yet-to-be-released) ferry strategy,' Colin Homan, the group manager of transport service development, said.

'There wasn't enough competition, and the prices were significantly more than expected.'

Ferry operators said despite its best efforts, Auckland Transport did not really understand the ferry business the way it understood bus and rail services.

Fullers said Auckland Transport needed to be making decisions now because it could take several years to design, build and commission new ferries.

As AT continued to work on its draft ferry strategy, Fullers commissioned and released its own view of what a ferry future could look like.

It included services to new destinations such as Browns Bay on the upper North Shore and Te Atatū in the west of the Waitematā Harbour.

Much of Fullers vision though depends on new infrastructure and service contracts provided by AT.

Horne said new ferry technology was also emerging, with the country's first electric ferry ordered for Wellington.

'There's an opportunity for collaboration between AT and a number of companies to start building and put together a couple of electric, carbon fibre ferries,' he said.

Auckland needed to tackle not only services and new boats, but critical infrastructure, which was missing, he said.

Fullers had to tow a ferry to Whangārei to have a damaged propeller fixed – a costly two-and-a-half week job which could have been done within hours if facilities had been available in Auckland.

Horne said in the shorter term, there were growth opportunities on existing runs but additional boats were needed.

Hobsonville Point, a rapidly growing northwest area which will eventually have 5000 homes, currently has a peak weekday service using a single ferry.

'There's a key opportunity straight away to grow the numbers using ferries,' Horn said.

'That's opposed to waiting for the service to get to a tipping point, then waiting six months to get extra capacity.'

Ferry services are disadvantaged by not being fully integrated into Auckland's electronic ATHOP fare system.

A journey combining several legs on buses and trains is counted as a single fare, saving travellers money, but ferry legs have to be paid as costlier stand-alone fares.

Planning committee chairman councillor Chris Darby said he had found no funding allocated in the next decade to fully integrate ferry fares into journeys across Auckland.

AT has been working for years on a plan to integrate ferry fares into the network system, making some trips cheaper, but could give no timeframe.

Another contentious feature of Auckland's ferry network is that legislation in the 1990s allowed Fullers to keep full control of the lucrative and most-used services to Waiheke Island and Devonport – effectively outside the council-controlled public transport network.

Critics have regarded those services as lucrative monopolies, but Fullers said it was the only company that generated enough cash, giving it the confidence to invest in new boats.

Auckland Transport will decide in the next months how to secure ferry services that had effectively been on hold through the unsuccessful tender process.

Its own draft ferry strategy will also be released for consultation, which will float ideas such as the agency owning ferries to be run by operators in the way the rail service functions.