Interislander grounding: A predictable event that could have been much worse

Saturday, 22 June 2024

Luke Malpass is Politics, Business and Economics Editor for The Post and Sunday Star-Times.

OPINION: It could have been so much worse. When the Interislander ferry Aratere ran aground near Picton late on Friday night after a mystery steering issue, there was a sense of inevitability about it.

Forty-seven people were stuck on the ferry overnight. All have now safely come to shore and crew swapped out. The boat was successfully refloated at high tide last night after KiwiRail sought global advice.

Early last year — the same weekend as the Auckland floods —another ferry, the Kaitaki, lost power and drifted dangerously close to rocks off Wellington’s south coast.

The fact that all eyes were on the Auckland flooding meant that the ferry situation did not get the national media coverage it would have otherwise.

On that occasion there were more than 800 people on board and had power not been partially restored, New Zealand could have been looking at its worst maritime disaster. On this occasion there were fewer people, and the boat apparently malfunctioned and subsequently ran aground in a comparatively safe place.

The current government-owned ferries — held by the state-owned enterprise KiwiRail — are either at or past the end of their lives. They are limping along and the costs of keeping them sea-worthy are astronomical. According to a KiwiRail report from 2021, the cost of maintaining the fleet could hit $65 million by next year, by which point the ferries will also be at the end “of their serviceable and economic lives”.

The solution to all of this was to be a brand-new set of ferries from the Korean Hyundai Mipo Dockyard. Commissioned in 2021, these were meant to be delivered by late 2025. By November 2023 that had been delayed to February 2026 to avoid the busy summer season.

In mid-December last year the whole project was scotched amid a cost blowout worth billions, according to then new finance minister Nicola Willis.

Considering the new ferries were being built for $551m, that $65m annual service cost looks astronomical and the new ferries relatively cheap. But the ferries were only going to be about a fifth of the final cost (at the most), because their increased size and rail capability meant that massive landside upgrades were needed. And it was those upgrades that had gobbled up the budget.

The ferries are still on order as far as we know, although KiwiRail will likely look to on-sell either the ships or the contracts to avoid significant break fees.

The pressure will now come on the Government. KiwiRail and everyone else involved will do their best, but it is a fact that these ships will become more dangerous the more they are nursed along and the more their lives are being extended. It’s a numbers game.

That means the Government’s plan to change up the Interislander replacement plan takes on a new urgency. Practically, it needs to find vessels to replace the current ones and quickly. Politically, they need to be a significantly lower cost than the abandoned Interislander and new ferry terminals.

The Government rightly was appalled at the mission creep and cost blowouts of the Interislander iRex project. But the fact is that if the so-called gold plated option turns out to be about the same price or not much more expensive than an inferior option, while also getting more port facilities etc, by definition it isn’t really gold plated.

If it turns out that there aren’t really much cheaper and suitable options — that are as timely — the Government should not be above sticking with the plan it inherited.

There are now inquiries underway about what went wrong and who or what might be responsible. But this is now a matter of urgency. The Aratere will be out of action for the forseeable future.

It is only luck that one of these breakdowns has not been more serious. These vessels are massive machines, often carrying hundreds of people, that travel across expanses of deep cold water complete with swells and winds at times. A malfunction in the wrong place could be fatal.

Should that happen, an inquiry won’t be needed to know what went wrong. And multiple Governments and ministers — which own the company that runs the Interislander — will carry moral responsibility for not having replaced vessels in a planned and timely manner.

This Government has prided itself on getting on with things quickly and making decisions. This is an area where it will have to do so.

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