Luxon has 'no regrets' about cancelling new Cook Strait ferries

Monday, 24 June 2024

KiwiRail Chief Executive Peter Reidy and Interislander Executive General Manager Duncan Roy address the media after Aratere incident.

Prime Minister Christopher Luxon has “no regrets” about cancelling new Cook Strait ferries that were under construction, despite an Interislander grounding.

The Government canned a billion-dollar project to replace Kiwirail’s ageing Interislander ferries in December, due to a cost blow-out. The state-owned rail operator sought a further $1.47 billion for escalating costs associated with constructing port-side infrastructure to accommodate the two large rail-enabled ferries, called the iRex project.

Despite the Aratere grounding in the Marlborough Sounds on Friday evening, again prompting questions about when safer and more reliable ferries might arrive, Luxon on Monday said he had “no regrets” about killing off the replacement ferry plan.

“You don't start a project at $750 million that then blows out into $3.2 billion with no end in sight and say 'That's the right solution' … No regrets about that.”

Luxon questioned whether the planned ferries, being built by Hyundai Mipo, would have arrived at the end of 2026 as planned.

'In theory they would do by the end of 2026. But of course there was lots of doubt about whether they would actually be arriving on time and there certainly was lots of doubt about whether the port infrastructure on both sides of the strait would have to receive those ferries would in fact be ready.“

He also restated the Government’s commitment to fund new ferries - out of the $7.5 billion multi-year capital allowance - but could only commit to these ferries being acquired by the end of the “useful life” of the current ferries, 2029.

“We're going to move as quickly as we possibly can.”

After canning the iRex project, the Government set up a ministerial advisory group to produce a report on how the purchase of new ferries should proceed.

Luxon said Kiwirail’s ministers received a report from this group at the end of last week, and it needed to be “digested” before it be made public, and he was not sure when this would be.