Winston Peters reveals new ferries deal, ‘saving billions’, says consultants had ‘hijacked’ past plan

Wednesday, 19 November 2025

The Government says its no-nonsense ferry plan has saved taxpayers $2.3b, returning the Interislander project to a smaller, cheaper scope with two new ferries and targeted infrastructure upgrades in Picton and Wellington, due for completion by 2029.

Two new 200-metre, rail-enabled Cook Strait ferries are to be built by a Chinese company for a fixed contract price of $596 million, and are due to enter service in 2029.

The announcement of the contract on Wednesday by Rail Minister Winston Peters comes almost two years after KiwiRail’s previous iReX (Inter-island resilient connection) plan to replace its ageing ferries was scrapped.

The death knell for iReX was the Government’s decision in December 2023 not to provide funding of $1.47 billion to continue the increasingly costly project.

The problem wasn’t the two new ferries that were to be built as part of iReX, and due to come in to service in 2026, but the rising cost of related landside work at Picton and Wellington.

The two new ferries are due to come into service in 2029.

Peters, in his Wednesday announcement, said the total programme would now cost less than $2b, with the taxpayer contribution being under $1.7b.

That meant meant taxpayers had “saved $2.3b while still getting the ferries and infrastructure they wanted,” he said.

The Government has announced details of two new 200-metre long Cook Strait ferries due to enter service in 2029.

That saving was achieved “because we have done away with the expensive consultants who hijacked the project by adding more and more infrastructure until Treasury warned the project would cost $4 billion”.

Peters’ statement did not mention the $222m paid to Hyundai Mipo Dockyard, which had been going to build the two ferries for the iReX project. Nor did it mention $449m spent on port infrastructure and project management costs as part of iReX, or wind-down costs for that project.

The Labour Party said the deal was a failure, with the Government agreeing to buy “smaller and more expensive ferries” after the axing of the iRex deal.

“We planned to pay $551 million for bigger and better, rail-enabled ferries. Winston Peters has agreed to pay $596 million for smaller ships of lower standard,” the party’s transport and rail spokesperson Tangi Utikere said.

But Peters, in a Wednesday afternoon press conference, lashed out at that earlier project, saying the new plan “saves billions” while delivering “the type of ferries people want” along with appropriate marine infrastructure in Picton and Wellington.

“We know this will work because the idea came from the ship’s masters union and has been assiduously tested by the ports, people in the practical business of ship and freight movement,” he said.

“Ask yourself, who’s more likely to deliver value for money… the people whose livelihoods are on the line or the expensive contractors who hijacked the iReX project.”

An impression of what the new Cook Strait ferries will look like.

It was “la la land” thinking to say the iRex ferries would have been in service in 2026, Peters added. “It could not be done,” he said, pointing to an absence of construction contracts as part of the deal.

The two new ferries due in 2029 were being built by Guangzhou Shipyard International, which Peters was due to visit next week with senior Ferry Holdings’ officials to acknowledge the agreement.

Details provided along with the announcement on Wednesday said the ferries would be 200m long, 28m wide, have capacity for 1530 passengers, and 2.4km of lanes for trucks and 40 rail wagons.

The ships were structurally designed for a minimum 30-year service life, and had significantly increased capacity compared to the existing fleet, the information pack said.

“The plan upgrades and reuses parts of Wellington’s existing port infrastructure, while rebuilding Picton’s facilities and delivering new assets for both ports.”

A table of estimated costs in the pack put the total cost of the project at $1.87b. That includes $596m for the two ferries, $531m for all Picton works, $325m for all Wellington works, and $415m for programme management and total contingencies.

A new wharf, a new linkspan, vehicle access bridge and passenger walkway would be built by Port Marlborough at Picton.

At Wellington, the existing wharf and berthing pockets would be upgraded. New infrastructure would include a new dual-level linkspan, linkspan approach structure, and passenger walkway.

Possible ways the changes might affect Aotea Quay operations were being evaluated.

Peters said money spent on infrastructure would be recovered over the life of the new Interislander ferries and infrastructure through port fees paid from Interislander revenue.

Interislander would be expected to build sufficient reserves to buy new ferries again in 30 years.

Peters, at Wednesday’s press conference, said the new ferries were “big enough to carry freight and families for the next 30 years, designed for comfort and freight capacity”.

“We will enter a new era of ship quality on the Cook Strait with these new ferries,” he added.