Wily Winston wins out over Willis, ordering rail ferries again

Tuesday, 1 April 2025

Winston Peters was in charge in 2020 when he gave $400m for the iRex project (left) which was cancelled by his National-NZ First-Act coalition government in 2023 after costs blew out by billions.

ANALYSIS: Winston Peters has won out over Nicola Willis, once again ordering rail ferries for the Cook Strait and securing himself a victory to crow about till the 2026 election.

The move will pay political dividends for Peters, at least in the coming 18 months. But the cut-price plan is not without risk, as the current fleet’s end-of-life nears.

There was also an important question the Rail Minister refused to answer at his grand reveal on Monday: will his ferry plan ultimately cost more than what Willis proposed last year?

Deputy PM Winston Peters announces the plans for new Cook Strait ferries. They will be ready in 2029.

Less than four months after he kiboshed the finance minister’s plan, wresting control of the project and once again becoming Rail Minister, Peters announced Cabinet’s agreement to purchase two 200-metre ferries to replace KiwiRail’s ageing Interislanders.

Listening with a tin-ear, the plan sounds remarkably similar to Willis’ plan, if not for an important detail. The ferries will have rail shunted directly onto them, instead of having rail freight transferred on-and-off as Willis’ “rail-compatible” ferries would have.

Cabinet has agreed on the package which Minister of Rail Winston Peters says will deliver the appropriate ships and infrastructure for the job at a 'significant saving' for the taxpayer.

It also sounds similar to a plan produced by Peters in 2019, if not for a question of scale. Then, as Labour leader Chris Hipkins recounted on Monday, Peters put forward a plan for two “mega” rail ferries. This iRex project in the years that followed blew out to $3.2 billion due to portside infrastructure -- a situation the Labour Government wasn’t happy about either.

“The Government's now come full circle. They've now committed to buying two new rail-enabled ferries … all New Zealanders know at this point is that they're going to end up with a smaller version of what they were previously going to get, and it's going to take longer, and in the meantime, the current ferries will limp along,” Hipkins said.

Rail-enabled ferries were not the priority for Willis when she delivered her plan in December, with a specific but undeclared “funding envelope”.

But it was for Peters.. Rebuilding the rail network after a period of privatisiation in the 90s, which continues to rankle with Peters has been a years-long project.

He said the cost of the project worked out by his team had not increased from the projections he provided Willis in April 2024. A claim that will prove difficult to verify when no dollar figures will emerge for some time.

“Have you lost the plot here? We’re saving the taxpayer billions of dollars … [it will be] a whole lot less expensive than what we faced,” he said.

“The only projects there was … iRex or this.”

Prime Minister Christopher Luxon stuck by Peters on this, also declining to disclose the funding envelope.

He did acknowledge Willis had a plan. Yet Peters had produced “a better plan, and that’s a good thing”.

It would be “a hell of a lot cheaper than iRex”, Luxon said.

Said Peters: “I can give you a thousand assurances, but some of us are half Scottish. We are more careful about saving your money, and we are about saving our own. That's been the driving thing. We're not going to waste one dollar of taxpayers money.”

Key to keeping the cost down was making the minimum viable changes to portside infrastructure. Wellington’s port would be modified instead of overhaulled; Pictons would need greater replacement.

Hipkins suggested this was kicking the can down the road. “It's probably going to cost New Zealanders more money, but at least it's good that they've made the decision.”

Peters will continue to claim this plan is better, no matter the cost.