Dire Strait: Concern terminals won’t be ready in time for Interislander mega ferries

There is concern new terminals won’t be ready in time for the arrival of Interislander’s new mega ferries as Treasury calls in independent consultants to review the cost pressures KiwiRail is facing.

Greater Wellington Regional Council chairman Daran Ponter said KiwiRail was “up against it” in terms of time.

“There is no getting away from that and they know it, they must know it.”

KiwiRail has said it is constantly reviewing the project to ensure the necessary infrastructure is in place when the new ferries are delivered.

The stakes are high after the Kaitaki ferry issued a mayday call in January with 864 people on board after it lost power in Cook Strait and started drifting towards Wellington’s rocky south coast.

Just yesterday three sailings on Aratere were cancelled after an electrical alarm sounded when the ferry berthed in Picton.

In mid-2021, a $551m contract was signed with a South Korean shipyard to build two new mega ferries to replace Interislander’s ageing and increasingly unreliable fleet.

They are due to arrive in 2025 and 2026.

An artist's impression of the rear view of one of Interislander's new mega ferries. Image / iReX Project

But a final design for the landside infrastructure including wharves, seawalls and new passenger terminal buildings is yet to be confirmed. The iReX project’s website still says main construction work at Kaiwharawhara in Wellington is scheduled to start by mid this year.

Cost pressures associated with this work have been flagged in several Treasury documents and in statements made by KiwiRail.

The overall cost of the project, including the ferries themselves, was last estimated to cost $1.45 billion but the details of any potential budget blowout are being kept behind closed doors.

KiwiRail has been providing Treasury and Ministry of Transport officials information to support discussions on cost pressures.

A Treasury spokesperson confirmed infrastructure consulting firm AECOM has been contracted to review documents from KiwiRail.

“The advice from AECOM to officials is due in the coming weeks and will inform officials in preparing advice to Ministers,” the spokesperson said.

“It is intended that all material information will be proactively released when it is appropriate to do so.”

Ponter said cost pressures were not surprising as most other major projects were facing the same issues.

But he felt KiwiRail had left it “very late in the piece” to work through the consenting and detailed design phases for the landside infrastructure

“Those actions didn’t really commence in earnest until the ferry orders had already been placed knowing that the ferries were due by 2025.... we felt that they [KiwiRail] were already looking at a very ambitious time frame.”

Ponter was concerned the introduction of the new ferries could be hampered by the failure to deliver the landside infrastructure on time.

He stressed he was not close enough to the project to be privy to the planning underway and hoped KiwiRail was pulling out all the stops, including a backup plan.

“Because they could leave us all floundering if they don’t have the new facilities in place... I’m sure that KiwiRail will find a solution to these issues but they are up against it in terms of time.”

iReX project director David Warburton said a decision on the location of the new ferry terminal in Wellington was not made until December 2020.

This was following extensive community debate about whether it should be at Kaiwharawhara or Kings Wharf.

Warburton noted the regional council was an “active participant” in this debate.

KiwiRail found itself in a stoush with both the regional and city councils, CentrePort, Waka Kotahi and Bluebridge over where the terminal should be located until the state-owned enterprise backed down in 2020 and Kaiwharawhara was agreed upon.

At the time, KiwiRail capital projects and asset development chief operating officer David Gordon stressed the project could not be delayed any longer as the current ferries were old and needed replacing.

He warned that Kaiwharawhara was not the “status quo” as the project would require major redevelopment and throw up challenges.

Warburton said KiwiRail then moved into design development including detailed site inspections and further consultation.

Consents were approved in February 2022 and January 2023.

Warburton said the project was working in an environment of rising cost and resource pressures.

“Including significant inflationary escalation in material and labour costs, alterations in climate change and seismic specifications and building code revisions, all of which the project is working to address.”

KiwiRail is currently reviewing all aspects of the project to ensure costs are managed prudently.

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.