Interislander ferry woes: Government all at sea over faltering plan for cheaper Cook Strait solution - Heather du Plessis-Allan

THREE KEY FACTS

• The Government has established a new company to procure replacement ships for KiwiRail’s ageing Interislander ferries.
• Costs for the original plan to replace the fleet with two mega-ferries ballooned to more than $3 billion, leading to their cancellation.
• KiwiRail is preparing to extend the life of its current fleet until 2029.

We’re not quite at the point where we can say that Nicola Willis made a mistake cancelling those mega ferries. But we got a lot closer this week.

Mainly, because we clearly can’t land a better deal. No ferries have been bought. And it’s been 12 months.

It’s hard to know what the Government’s been doing for a full year since cancelling the big boys. We know they’ve called around trying to buy some second-hard ferries - 21 times they were turned down.

We know they’ve also sounded out the market and got a fair idea of the price for a couple of medium-sized replacements. That’s probably where the rumours of a $900 million price tag come from.

But that’s basic market appraisal. It doesn’t take long. Even coalition in-fighting about what to do can’t explain a 12-month delay. And it’s not like they’ve got time to waste.

Time is a risk here. If we hadn’t cancelled those two mega ferries, they’d have been on the water in 18 months. Instead, we’re now having to wait five years for whatever we choose.

That’s five years of Nicola Willis getting white knuckles any time an Interislander ferry gets into trouble. And they probably will. In just the last two years we’ve had one lose power and drift close to rocks in Cook Strait and another run itself aground on a sandy beach.

Those are just the big incidents. There were a bunch of smaller whoopsies as well.

Finance Minister Nicola Willis and newly appointed Minister of Rail Winston Peters at this week's ferry announcement. Photo / Mark Mitchell

Until the replacement ferries arrive, the Government is at huge political risk if anything goes seriously wrong on the water.

Plus, those big boys are starting to look like a bargain. They would’ve cost $551m.

Too much, said Willis. Why buy two Ferraris when good, reliable Toyota Corollas will do.

But if the rumours are true - rumours which at least one major news outlet says it’s seen written down in advice to Cabinet ministers - then those two Toyota Corollas are going to cost us $900m.

It hardly feels like a good deal to cancel the Ferraris and then end up paying nearly twice as much for the Corollas.

To be fair, the vehicle wasn’t the biggest cost problem. It was actually the garaging for the vehicle.

This isn’t doing much for the National Party’s attempts to look like better money managers than Labour.

The port work that was required to dock the Ferraris either side of the Strait was going to cost $2.6 billion and counting. Total bill: $3.2b, and only headed north of that.

Some of that money still needs to be spent. Whatever ferries we get, we still need to upgrade the dilapidated port infrastructure to accommodate them. Cost: unknown. Expect it to be a lot. Infrastructure work in this country is never cheap.

Then add in the break fee we need to pay the South Koreans for cancelling their mega ferries - rumour is $300m - and now you’re getting into the billions.

If David Seymour’s whoopsie was right this week then the final bill could be around $2b.

I never bought into the idea that we needed to spend billions so we could carry heavy trains across Cook Strait on ships. But when the no-real-upgrade-on-the-status-quo Corolla deal starts looking like it’s around $2b, then $3-4b for the super flash upgrade starts looking like a bit of a bargain.

This isn’t doing much for the National Party’s attempts to look like better money managers than Labour.

Because remember, that’s why they cancelled the mega ferries in the first place. They were a wild, luxury purchase we couldn’t afford and Willis was here to tidy up the books.

That might’ve been too rash a call only a month into Government. Because now we’re getting less ferry for more money and we’re wasting hundreds of millions possibly on getting out of a deal. Hardly convincing money management.

There’s still time for this ferry decision to be redeemed. Who knows. Maybe Winston Peters will pull off a miracle and get the same or better for less.

Or this becomes a certain mistake.