The rail-capable ferry ran aground near Picton on Friday due to a suspected steering issue.\
Video / Supplied
New advice suggests ageing Interislander ferries could operate until 2029.
KiwiRail chief executive Peter Reidy is committed to continuing in his job.
Increased maintenance has improved the overall performance of the ferries.
KiwiRail chief executive Peter Reidy has spoken out about Interislander’s future, the performance of the ferries, and why he’s committed to continuing in the top job after a turbulent week for the state-owned enterprise.
In an exclusive sitdown interview with the Herald, Reidy has also warned that ageing ships candeteriorate “dramatically”. It comes as KiwiRail prepares to keep its Interislander fleet afloat until 2029 - three years after the new replacement mega ferries were due to arrive.
The peer-reviewed advice suggested there were no systemic issues that would prevent the life of the ships from being extended subject to investment and enhanced maintenance, Reidy said.
“If the Government says to us: ‘We want you to run these until 2029′, we’ve got the plan, we’ve got the people, we’ve got the detailed information, we’ve got the experts that can be next to us if that’s the mission,” Reidy said.
Asked whether he could assure the public that KiwiRail could safely run the ships until then, Reidy stressed that ministers still needed to be fully briefed about the advice.
“At this stage from what I’m seeing we have a positive plan going forward but like any asset, and I saw it in Arahura - within 18 months it changed dramatically, they get old ... they get to a certain age and all of a sudden the deterioration gets worse.”
Interislander ferry Aratere ran aground one week ago. Photo / Tim Cuff
The Arahura Interislander ferry retired after 32 years of service. It was suffering from splitting on its deck that quickly became too expensive to fix, Reidy said.
The oldest ship in Interislander’s current fleet is Kaitaki which is 29. Reidy said sometimes comparable ferries could operate until they are 35.
Maintenance was becoming increasingly more expensive and annual costs could reach $40 million in the coming years, Reidy said.
There have been some suggestions that the annual cost could reach $65m. Reidy said it was important to have a contingency because a major upgrade could “really wipe you out”.
It raised concerns about steel corrosion, metal getting weak and cracking, and prohibitive maintenance expenses.
“The existing ferries will reach the end of their serviceable and economic lives by the mid-2020s and will become increasingly unreliable and costly to maintain,” the business case said.
Reidy said the difference between this report and more recent advice was that more information is now known about the assets.
Asked whether the business case for the mega ferries was based on inadequate information, Reidy said he was not the chief executive of KiwiRail in 2021.
Reidy was the chief executive from 2014 to 2018 before leaving to take up the same position at Fletcher Construction.
He returned to KiwiRail in 2022 after his successor Greg Miller quit. Miller said at the time that sustained allegations in the media, while rejected by him, had become such a distraction that he had decided it was in the best interests of himself, his family, and the state-owned enterprise to step down.
KiwiRail chief executive Peter Reidy says he's not worried about losing his job and is committed to staying in the role. Photo / Mark Mitchell
Media reports had criticised the workplace culture under Miller. He was previously the board chairman.
Responding to this allegation, Miller has said: “On my watch, safety was the most important aspect of everything we did”.
In his interview with the Herald, Reidy said the organisation had “really stepped up” its approach to safety and maintenance since his return.
Apart from the Aratere grounding and Kaitaki mayday call, Interislander’s recent performance has been strong, he said.
Interislander had 99 per cent reliability and 92 per cent safe, on-time performance to schedule, from December to April.
This compares with the year before Reidy returned to the organisation when one in five sailings were cancelled.
KiwiRail has gone through 10,000 items in its asset-management system. Reidy said KiwiRail can look at a critical part of the ferries down to valves and rubber seals.
“Five or six years ago, we probably didn’t have that detail. We’ve got granular detail now,” he said.
Asked if the problem was therefore that KiwiRail had historically inadequately maintained its ferries, Reidy said plenty of money had been spent but the strategy needed to change to be more proactive as ships got older.
“Preventative maintenance rather than just fixing it when it fails.”
One of the reasons Reidy gave for keeping Interislander was its recent performance record which he said exceeded even the best operators globally.
During an urgent debate in Parliament about Interislander this week, Transport Minister Simeon Brown said there was so much focus on the “big shiny” new mega ferries in recent years that KiwiRail had lost sight of maintaining what they already had.
Reidy said he wouldn’t characterise it as KiwiRail having lost sight of that.
“A big capital project like we had with iReX [the mega ferries] does take management’s focus and attention and it’s natural at times to focus on what you’re driving forward but what I can say is the people that were running the Interislander ... they were still focused on the reliability and the safety of the business.”
Willis said she didn’t think an organisation with highly paid executives such as KiwiRail should have to spend a sum as big as it did on external consultants for advice on how to run its core business.
Reidy said the expertise allowed KiwiRail to challenge its future plan for the business against international benchmarks and stood by the “investment”.
He was not worried about losing his job and was committed to staying in the role.
“I was invited back here to improve the performance of this business and I can show you that we’re getting some performance improvement definitely in safety, last year we had a record financial result, it’s been a tough year this year but we’ve got a bold plan for the future.
“I can show you we are lifting reliability for customers, we’ve got a much better relationship with customers than we had three years ago, our culture is lifting, we’ve got some great execs [who] were brought on board from the private sector and have a bold ambition to improve this business.”
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.
