Picton will be shocked ferry project dead in water - mayor

Wednesday, 13 December 2023

KiwiRail says the project will be wound down as it cannot afford to proceed without more Government help.

The Government’s decision to pull the plug on KiwiRail’s inter-island ferry project will be a shock to people in Picton, says Marlborough’s mayor.

Nadine Taylor said the port town had been “very engaged” in the Inter-Island Resilient Connection (iReX) project and had been a “great supporter of it”.

“A large number of workers had been expected to work on the iReX project over the coming years,” Taylor said on Wednesday, adding she was disappointed it wasn’t going ahead.

Finance Minister Nicola Willis announced on Wednesday she had declined to provide $1.47 billion to continue the project.

Originally, when it was announced in 2020, the work was expected to cost under $1 billion. On Wednesday, Willis said the latest briefing indicated it would cost $3 billion. She described it as a “massive cost blowout”.

A new temporary terminal in Picton was officially opened in July, so the old one could be ripped down and a new one built as part of the iReX project.

KiwiRail chairperson David McLean said the board was advised by the Government on Tuesday that it had decided not to provide further funding for the iReX project.

“Unfortunately, we cannot proceed without further government funding. We respect the government’s role as shareholder and funder to make this decision.

”The board will now oversee the wind down of the project and review our plans for the Cook Strait connection.”

A rendering of the new Interislander ferry.

An alternative suitable long-term solution could take years to develop, McLean said.

The iReX project would have transformed the Interislander fleet, with two new rail-capable, low-emissions ferries and new terminal infrastructure in both Wellington and Picton. The first new ship was meant to be launched in January 2025. Hyundai Mipo Dockyard had already been contracted to build the ships, however, Willis said on Wednesday she had been told Hyundai had not yet started building the ships.

Port Marlborough had a “fixed-price” deal with KiwiRail to deliver its part of the project. That price was fixed at $110 million, borrowed from the Marlborough District Council.

Taylor said while the decision would not directly impact Marlborough’s ratepayers financially, it would have an impact on New Zealand’s long term inter-island infrastructure.

“I want to emphasise to Kiwis and overseas travellers that Picton is open for business. The Interislander and Bluebridge ferries are working as normal across Cook Strait,” she said.

“I would like to sit down with the new Government and talk through what the future looks like for our inter-island infrastructure. There is no doubt that we need to invest in this national transport connection for the long term. The question now is how and when we will do that.”

The mayor said Port Marlborough, which is wholly owned by Marlborough District Council, had robust agreements in place with KiwiRail that required the completion of early works at the port of Picton and the reinstatement of any affected assets.