How much Winston Peters’ Cook Strait ferries deal has actually saved

Sunday, 23 November 2025

Vernon Small is a journalist and former Labour Government advisor.

OPINION: Anyone who read Harry the Dirty Dog will remember that after he got so grubby his family didn't recognise him, he flip-flopped and even flop-flipped – he tried all his old tricks - to convince them it was really him.

For some reason Gene Zion’s enduring 1950s kids classic came to mind this week as NZ First leaped from avid advocate to avowed enemy of ACT’s beloved Regulatory Standards Act.

Just days after providing the votes that put the law on the statute books, NZ First leader Winston Peters declared he was so filthy on it that he would campaign for its repeal.

It seems stability and the constraints of the coalition agreement can justify voting for a law that is a transgression of the “fundamental principles of democracy and the paramountcy of Parliament” by giving an unelected board the power to publicly pass judgement on whether laws or regulations are in line with the principles of the Act.

The Act has sparked fervent public opposition and NZ First had been getting a lot of stick over backing it, so it is no great revelation it would want to distance itself from it.

But the strength of Peters’ condemnation and the suddenness with which it was announced was a surprise.

Seems it also came as a shock to Peters’ own MPs. Casey Costello had strongly endorsed it during the third reading vote last week, but only, it transpires, because she had not talked to Peters about it. So not a position hammered out at caucus then?

In truth it is just the latest in a series of “them not us” positioning comments from Peters that (as noted here last week) give him wriggle room at the next election; space to campaign without unequivocally supporting the return of this government and certainly not in harness with the ACT party.

They include Peters’ rejection of National’s talk about asset sales and his stunning swipe at the Government’s economic performance – or at least the pace of its success – last week. They came on top of his doubts about the gene technology bill, differing stances on solutions to the energy crisis and the wisdom of importing LNG, and sniping with Prime Minister Christopher Luxon over whether “I” or “We” is the correct form to claim credit for government achievements.

ACT leader David Seymour said Peters is getting ready to flip to Labour. That was on message for fishing in the conservative pool of voters where he and Peters both cast a line.

More likely Peters’ instinct – call it a strategic plan if you like - is to reestablish his role as the reasonable voice at the political sweet spot, where he could be seen going either Left or Right … while offering soft centrist National and Labour voters a way to minimise the influence of either ACT or Te Pāti Māori.

His oversight of the plan to replace the Cook Strait ferries, further fleshed out this week, only goes to reinforce that positioning, while at the same time wiping some of the egg off the coalition’s face for its trigger-happy scuttling of the previous government’s iRex project.

Peters – who took over the project a year ago after 12 months of little progress and no sign of the “Toyota Corolla” second hand ferries Finance Minister Nicola Wilis had talked up - this week outlined a plan costing an estimated $1.86b including two ferries built in China (for a fixed price of $596m), port-side developments of $531m in Picton and $325m for Wellington and $415m for project management costs and a contingency.

Up to a point, that contrasts well with the iRex project’s fixed price of $551 million for two ferries built in South Korea and the $2.9b to $3.1b overall price of Labour’s plan … but only if you ignore the $671m in sunk costs of scrapping the previous scheme that includes $220m for breaking the South Korea ferries contract. (In addition, at least $85m of the iRex spending can be re-used in the new project.)

The final bill, including the cost of dumping Labour’s plan, will be about $2.5bto $2.6b - remembering we will get two smaller ships two years later (but with similar capacity) and less ritzy developments at the Wellington and Picton terminuses. That is some $500m less than iRex (providing the new project is not bedevilled with the same cost escalations).

Meaningful but not earth shattering.

But before you think Peters’ political positioning will see him offer any easy favours to Labour, perhaps by leaving other ministers to carry the can for the knee-jerk cancellation of iRex, think again.

Instead, he claimed shamelessly this week that “the Government has saved the taxpayer billions” with the new Cook Strait plan. To get to his $2.3b of savings he has taken the Government’s $1.7b share of the project (after deducting Wellington and Picton contributions to portside costs) and compared that not with the $2.9b to $3.1b iRex figure but with an alleged warning from Treasury that Labour’s iRex “would cost $4b”.

The $4b figure seems to be based solely on a Treasury note from July 2023. It said that the mean cost overruns for similar projects were 32% (which had already been exceeded by iRex) and when projects overran by 50%, the mean cost overrun was 183%. “On this evidence, the total cost of iReX could approach $4 billion.”

That’s a “could” not a “would” and the number is based on international mean cost overruns, not anything specific to iRex.

But politics is politics, and Peters is the master of it.

He may be flipping and flopping on some things, but never on positioning himself as the hero of the hour.

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