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Minister for Rail Winston Peters will announce the next steps in the Government’s journey to replace the ageing Interislander ferries today. Peters took on the rail portfolio and the responsibility for managing the ferry procurement late last year . When he took the portfolio, Cabinet set a deadline for the end of March for Peters to come up with a proposal to get new ferries on the strait.
The announcement is the latest twist in a saga which began with an indicative business case, submitted to the Government in 2019 to replace KiwiRail’s three existing Interislander ferries for $775 million – including the cost of building new landside infrastructure to accommodate the new larger ships. Fast forward to 2023 and the project’s cost had blown out so much that the Government was forced to agree to an injection of $750m into the project – a sum that, despite being nearly as much as the entire project cost just five years earlier, was not considered enough then to complete the project, which had at that point exploded to $2.6b.
By December 2023, the project had escalated to $3b, at which point Finance Minister Nicola Willis pulled the pin, declining KiwiRail’s request for additional funding. The big question surrounding the project is whether the new ferries will be “rail enabled”. Rail enablement means locomotives can drive on and off the ferries, seamlessly shunting their cargo between islands.
Ferries on the strait have been rail-enabled since the 1960s – and the ferries Labour had planned to build were meant to be rail-enabled too. Last year, Willis produced a “viable proposition” of two 200m ferries, which would have been “rail capable”. This would have meant freight could be taken to the ferry by rail, loaded onto separate wagons which would go onto the ferry, and then taken off again at the other end.
KiwiRail changed its tune slightly on rail enablement and became open to non-rail enabled options, but Peters remains keen. Last year, when Peters was asked whether he would prefer rail-enabled ferries, he said: “Well, of course I would. Because for 100 years that’s what we’ve been planning to do.
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