Reidy said KiwiRail visited the shipyard after the Government called time on the project but today he confirmed discussions have started with HMD to enter a termination agreement.
He said the cost of exiting the contract was commercially sensitive and something KiwiRail was looking to negotiate.
The decision was made after considering other options over the past few months including making the portside infrastructure cheaper by reducing its 100-year design life, Reidy said.
“It all comes down to risk and the trade-offs so, we’ve worked through that and we respect the Government’s decision. We now move to the next option which is looking for replacement ferries.”
KiwiRail was in the market for a ‘Plan B’, Reidy said.
“The first place to go is the used ferry market- let’s see if we can do that quicker. But we’re out there talking to a number of players and just seeing what options are on the table.”
The Government has announced it will appoint a ministerial advisory group (MAG) to provide independent advice and assurance to ministers on future options for a Cook Strait connection.
The Ministry of Transport will also lead an assessment of long-term inter-island service requirements.
KiwiRail expects replacement options for the Interislander ferries will be part of these broader reviews.
Reidy said they will be working with customers and international shipbrokers on options to source suitable replacement ferries.
“KiwiRail will be working closely with the Government, MAG, and all stakeholders on options for a safe, reliable and resilient Cook Strait connection to transport freight and passengers,” KiwiRail said.
“KiwiRail would like to thank our people, contractors, our port, Mana Whenua and union partners, and all those who have worked tirelessly on this project up to this date, but, unfortunately, we cannot proceed without further Government funding. We respect the Government’s role as shareholder and funder to make this decision.”
He thanked HMD for their partnership through the design phase of the ferries.
“HMD has continually shown its value and professionalism as one of the world’s leading shipbuilders, with work delivered to the highest quality.”
KiwiRail to front select committee
KiwiRail bosses will front a select committee meeting tomorrow where they are expected to face pressing questions about the future of the ferries.
Transport and Infrastructure Select Committee chairman Andy Foster confirmed KiwiRail will front the committee for an annual review of the state-owned enterprise.
“In the time available for select committee scrutiny the committee generally chose to hear from the larger organisations within our delegations, and which had the most significant issues that we wished to consider.
“I don’t think anyone would be surprised that KiwiRail would be one of those organisations.”
Reidy cancelled a pre-arranged interview with the Herald about the future of the ferries last week as he prepares for the select committee meeting.
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.
