Two reports have been prepared, one by a ministerial advisory group and the other by the Ministry of Transport. As well as recommending what new ships should replace the current fleet of three, both are understood to consider the possibility of KiwiRail no longer running the service.
The Herald understands alternative options include the Interislander ferry service being transferred to a new entity with some Crown oversight, or sold to a private operator.
At the same time, KiwiRail board members are swiftly removing themselves from their decision-making positions. And it’s clear the Government is onboard with their exits.
The first to go was chair David McLean, who announced his early retirement last month - most notably in the same week the Aratere grounded near Picton.
In his statement on June 23, he said, “I understand the Government intends to announce my retirement today, so I have brought my announcement forward.”
He wasn’t set to finish until the end of October.
Finance Minister Nicola Willis said the announcement was unrelated to the Aratere incident but warned a wider “refresh” would be happening.
“We will be refreshing that position and we will be looking to refresh the board more generally to ensure it has the skills and expertise needed to lead that organisation into the future.”
Two weeks later, another two KiwiRail directors were heading for the door. On Tuesday, Rachel Pinn, a transport consultant, and Ed Sims, the former chief executive of Canadian airline WestJet announced their resignations from KiwiRail’s board. KiwiRail confirmed Sims’ resignation was effective from June 28 and Pinn’s would take effect on July 31, the same day as McLean’s.
The failed iRex project raises serious questions about KiwiRail’s ability to safeguard Cook Strait transportation, a vital trade and travel route for New Zealand, essentially State Highway 1 of the seas.
But it’s not just this failed venture, and the fact we’re now in a vulnerable position with no plan B, that is concerning. This week the Herald revealed the one Interislander ferry still sailing, the Kaitaki, has been missing a stabiliser fin for more than 18 months.
Without it, it can’t sail in large swells. And it seems nobody knows how or when it disappeared. The fact it was missing was discovered during a maintenance check in Sydney.
Government ministers have also raised “serious questions” about KiwiRail’s financial outlook and its safety record.
“We have serious questions about whether KiwiRail, operating under its current business model, will be able to operate without ongoing dependence on government subsidies and support”, Paul Goldsmith wrote in a proactively released letter from April.
The Minister for State-Owned Enterprises also outlines concerns about KiwiRail’s approach to health and safety and its ongoing asset management practices.
In an exclusive interview with the Herald last week, KiwiRail CEO Peter Reidy said he was not worried about losing his job and was committed to staying in the role.
In a previous statement he said KiwiRail remained committed to operating the Interislander service.
“We have run the service for over 60 years, and we want to continue to run it for another 60,” he said.
Whether the Government is convinced KiwiRail can will be revealed in the coming weeks.
