Winston Peters scathing of ‘blinkered’ officials over Cook Strait ferries

Friday, 13 June 2025

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.

Rail Minister Winston Peters overruled “blinkered” Treasury officials who advised him to pursue road-only Cook Strait ferries, instead of the rail-enabled ferries he favoured.

But newly released documents also show Peters pushed ahead despite officials warning about risks that could cause “material cost increases” -- cost increases being the problem which had the Government kill off a prior ferry replacement plan.

“Their advice was so blinkered that it consistently presented its recommended solution as ‘cheaper’ even when their own analysis showed the option we selected had the lowest overall cost and the highest economic value,” Peters said, in a scathing criticism of the officials that advised him.

Treasury advice to Peters for the contentious ferry decision was publicly released on Thursday, the same day the Aratere broke down for nearly four hours after departing Picton on Wednesday night, reinforcing the fragility of the current ageing ferry fleet.

Rail Minister Winston Peters announces the plans for new Cook Strait ferries in March.

The Aratere will be retired in August to allow for needed infrastructure work for replacement Interislander ferries.

Replacement ferries, two 200-metre rail-enabled ships to arrive in 2029, were decided upon by Peters at the end of March, more than a year after the Government cancelled the prior iRex project, which would have acquired two larger rail-enabled ferries but suffered from a major cost blow-out in port infrastructure.

Road-only ferries ‘cheaper’

The papers show in March Treasury officials continued to argue for the road-only, or ROPAX option, as it was “ready to go, it achieves the intended project completion date of [redacted], it is less complex, it is cheaper, while achieving the desired operating parameters”.

Finance Minister Nicola Willis had, late in 2024, proposed purchasing ROPAX ferries, but Peters disagreed and wrested control of the project from her in December.

Such ROPAX, or “roll-on/roll-off”, ferries require rail freight to be offloaded and rolled onto the ferry, to be re-loaded at the other end of the crossing -- a process Interislander operator KiwiRail said was “effective and sufficient”, though it preferred rail-enabled ferries.

The Aratere arrives in Picton as the Kaiarahi leaves, in 2023.

As well as ROPAX, Peters was also presented with a rail-enabled option that required new port infrastructure, and a “Rail Max Reuse” option which would reuse as much of the existing infrastructure for new rail-enabled ferries but offered “a lower level of service”.

“We do not consider that the rail-enabled options generate material broader benefits for the transport system. This view is shared by the Ministry of Transport,” the advice read.

“There are operational advantages from rail-enablement but these do not fully offset the increased capital cost.”

Peters, in a statement on Thursday, said the officials took “such a narrow approach” they were “effectively on autopilot, believing the Government would agree to end 60 years of Interislander connecting road and rail”.

He said Treasury advised on the 2020 decision to buy rail-enabled ferries, so its “strong position against it in 2025 was of interest”.

Peters ultimately ruled out the ROPAX ferries and decided on the “Rail Max Reuse” option, which requires the re-purposing of existing infrastructure. A ship builder has not yet been contracted.

Further advice to Peters, later in March, showed Treasury officials told him there was also a risk that re-using the infrastructure “may impact KiwiRail’s ability to achieve its desired operational parameters”.

Other risks included uncertainty over whether a 70 metre wharf extension would properly accommodate the rail-enabled ferries, and this could “drive material cost increases” in the reconfiguration of rail yards.

Also, an elevated passenger walkway at the Wellington port may not be able to be reused, with some modification, on the ferries.

Ferry Holdings Limited, a Crown-owned company appointed by Peters and tasked with managing the procurement, backed the rail-enabled option, saying the more complex and expensive infrastructure was “not unmanageable”.

The Govt ‘ultimately’ pays

Greater Wellington Regional Council chairperson Daran Ponter said the council’s port operator, CentrePort, would be able to provide the needed infrastructure for the ferries despite the uncertainties, “because ultimately, the Government is paying”.

Labour Party transport spokesperson Tangi Utikere.

“We've sort of faffed around now for an extra two years, and even under the previous ferry contract, it was going to be touch-and-go as to whether we were going to be able to deliver the port side infrastructure on time.

“If they don't absolutely confirm what it is that they are going to be using on the Cook Strait, we could very well find that CentrePort and its contractors are again up against it to be able to deliver.

“That won't be on CentrePort. That will be a Government administration that really has, at times, looked bewildered.”

Labour Party transport spokesperson Tangi Utikere said the advice shows that cancelling the prior ferry project made it more difficult for Peters to pursue “the full range of options”.

“That wouldn't have been the case if Nicola Willis hadn't actually gone and cancelled the original ferry contract and the infrastructure that was in place.”

A late proposal for the ferry replacement, from an organisation which had its name redacted in the papers, was for a mixed-fleet of two ROPAX ferries and a smaller rail-enabled ferry only to carry freight.

This was rejected by Peters as being light on detail. It would have been “great” for CentrePort, while costly for Port of Marlborough.