Budget 2024: Money to investigate emergency towing but no new Cook Strait ferries

• The Government has allocated $600,000 to explore emergency towing options for Cook Strait.
• Interislander’s Kaitaki ferry and the MV Shiling experienced power losses, highlighting the need for such measures.
• Transport Minister Simeon Brown has emphasised the commitment to a resilient Cook Strait connection.

The Government has announced $600,000 to investigate emergency towing options for Cook Strait, which the maritime union says is an ambulance at the bottom of a cliff.

There was no word in the Budget on what will replace Interislander’s cancelled mega ferries and Treasury says exiting the contract to build them is a fiscal risk.

Last week the Herald revealed the Government was considering advice on improving emergency towing after two recent mayday calls. There is no emergency towing vessel on standby in New Zealand to help large ships in strife.

Interislander’s Kaitaki ferry narrowly avoided disaster after it lost power in Cook Strait and started drifting towards Wellington’s rocky south coast with 864 people on board. It’s unknown how harbour tugs sent to the ship’s aid would have fared should their assistance have been required.

The MV Shiling then lost power 22 nautical miles from Farewell Spit. The ocean-going tug Skandi Emerald happened to be in New Zealand for a work assignment and was able to secure the ship and tow it to Wellington.

The Government has responded to this by allocating $600,000 in the Budget for “emergency ocean response capability”.

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Transport Minister Simeon Brown told the Herald the money is for undertaking a business case to explore options and costs.

”I have asked the Ministry of Transport to work with Maritime New Zealand to consider options including the ability to hold a vessel in place and being able to tow a vessel to a safe harbour.

”The Government is committed to ensuring a resilient Cook Strait connection to connect people and support the movement of freight across Cook Strait,” Brown said.

Transport Minister Simeon Brown says the $600,000 is for undertaking a business case to explore options and costs. Photo / Mark Mitchell

Maritime Union of New Zealand national secretary Carl Findlay said the money was an ambulance at the bottom of a cliff.

“They wouldn’t need it if they hadn’t been so silly to pull the programme on the new ferries.

“We’re coming into winter now and that strait is very dangerous and we know that we’ve got ferries operating there that are prone to breaking down.

“Instead of getting them replaced with state-of-the-art, good ferries that can actually do the job and aren’t ageing and need replacing, they want to get a vessel in there to tow them to safety.”

Greater Wellington Regional Council chairman Daran Ponter said emergency towing capability was about more than just the Interislander ferries.

He pointed to the Shiling cargo ship losing power as another example.

“When we think of Cook Strait, those ferries immediately come to mind as an ageing fleet that has had mechanical issues over the last few years. So, they immediately come to the forefront of our minds.

“But we would rue the day Shiling grounded on our coastline for the environmental damage that would have been caused. This is not just about the Cook Strait ferries, it’s about making quite a turbulent stretch of water safer.”

Maritime New Zealand director Kirstie Hewlett was pleased with the Budget announcement.

“It allows us to continue the work Maritime New Zealand has done so far on a business case for emergency offshore response capabilities.”

No new ferries announced in the Budget

Finance Minister Nicola Willis said the Government remained ready to invest in a ferry solution for Cook Strait and this was one of the reasons a generous amount of funding has been the multi-year capital allowance.

At present $7.5 billion remains in the allowance to be allocated to future projects.

Treasury identified Cook Strait resilience as a new risk in the Budget Economic and Fiscal Update.

It comes after the Government refused to give KiwiRail more money for two new mega ferries soon after it came to power - leaving the $3b plan to replace the ageing Interislander fleet dead in the water.

Recently proactively released documents revealed the extent of the cost blowouts that Willis faced. At one point, KiwiRail assured Labour’s Grant Robertson when he was Finance Minister that the worst-case scenario would be an extra $300m before requesting $1.2b a few months later.

KiwiRail is now negotiating the exit of its $551m fixed-price ship-building contract with Hyundai Mipo Dockyard.

“The amounts forecast for the wind-down may not be sufficient to cover these costs”, Treasury said.

I've been told that the break fee for cancelling the *fixed price* Cook Strait ferries could be as high as $200million. We pay this, get worse ferries, at a higher cost, & several years later while the old ferries break down increasingly. The financial wizardry of Willis & Brown. https://t.co/f42BceQhBH

— Michael Wood (@michaelwoodnz) April 11, 2024

There has been speculation, including by former Labour Transport Minister Michael Wood, that the exit cost could be as high as $200m.

A Ministerial Advisory Group has been tasked with finding alternative solutions for Cook Strait’s future.

“At this stage, any future fiscal implications for the Government from proposed alternative solutions are unknown”, Treasury said.

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.