Everything is on the table when it comes to finding the money for any upgrades to Wellington’s ailing port infrastructure and readying it for whatever replaces KiwiRail’s Interislander ferries.
Finance Minister Nicola Willis and State-Owned Enterprises Minister Paul Goldsmith have stood up a working group to brainstorm a future for the crossing, after cost pressures saw Willis axe the $3 billion iRex project to upgrade the ferries and build new, earthquake-resilient portside infrastructure.
The Cook Strait crossing is complicated, involving logistical challenges such as managing vast quantities of freight and traffic, as well as environmental ones, including the Strait’s famously temperamental weather, and that’s before you even get to the multiple earthquake faultlines - the chief cause of iRex’s cost blowouts.
Finding a suitable outcome is complicated by the sheer number of entities involved. Any decision is one for the Government and its state-owned enterprise, KiwiRail, who will use any new ferry infrastructure, alongside Bluebridge, its competitor, who will probably have to help pay for it.
It’s also a big decision for the port, known by its trading name, Centreport, as well as the two councils that own it, Horizon’s Council and the Greater Wellington Regional Council.
“I‘m interested in is having as many voices at the table and ensuring that people are keeping the options open,” Willis told the Herald.
Any solution will likely require costly earthquake-strengthening upgrades to Centreport and possibly the construction of a new ferry terminal to serve both the Interislander and Bluebridge.
“What we’re working to do is to put a range of options on the table because we are conscious there are a lot of people who benefit from upgraded facilities or who rely on good infrastructure at the port,” Willis said.
She said she was keen for users of the infrastructure, rather than the Government, to help pay for any upgrades.
Willis said she wanted an “open-minded approach” to what needed to be done, and where the money would come from to do it.
“Is there an opportunity for a public-private partnership? Is there an opportunity for different financing arrangements? Who is best equipped to do this work and who might want to be involved in investing in it?” Willis said.
One option could be a partial float of the port. Hawke’s Bay Regional Council sold 45 per cent of Napier Port in 2019 raising more than $200m for the council which was used to pay down debt and invest in new facilities at the port.
Act’s leader and Minister for Regulation David Seymour thinks that idea has some merit.
“Sounds like an idea worth considering,” Seymour told the Herald.
“Government should always be open to ensuring the capital it has is used for the greatest possible public benefit,” he said.
Willis added she had not been made aware that Centreport was keen to be floated, or sold, and it was not an idea she had considered. She would not comment on whether she thought the Port Napier float set a successful example that Centreport may want to follow.
“I would hesitate to comment in any way which would tell Centreport how to run their business. Except to say that we know that there are many ways to access capital and that we do want to see a thriving port,” Willis said.
The port is not owned by the Crown, but by two councils, which potentially constrains the amount of capital they can inject into the port, should it require additional investment.
Willis said any method of raising capital was up to the port and its owners.
“I’m certainly not entering into these discussions with a view about how they capitalise their business or how they finance it. It’s absolutely up to them to consider and to comment on and, and not really for me. How they choose to do it is up to them,” she said.
Asked for its view on the idea of a partial float, the port’s chief executive Anthony Delaney would only say that he was looking forward to “engaging with the Ministerial Advisory Group, the Ministry of Transport, Treasury and any other applicable stakeholders to find a way forward for the Cook Strait Ferries.
“This will no doubt consider all potential funding solutions including those explored previously by CentrePort, the role of CentrePort, and the best option to move forward with critical infrastructure for New Zealand’s supply chain,” Delaney said.
Horizons council, which owns 23.08 per cent of the port, would not comment on what it would like to see happen. Greater Wellington Regional Council owns the remaining 76.92 per cent of the port. Its chairman Daran Ponter said he did not have anything to say at this time.
However, Green Councillor Thomas Nash told the Herald that selling the port was “off the table” for him.
“Our council has been working towards greater public control and ownership of key strategic assets for the delivery of key public services,” Nash said.
The group assessing the future of the ferries is chaired by Nelson Airport chief executive Mark Thompson and includes Freightways, Auckland International Airport and Sanford director Mark Cairns, and former Cabinet Minister Roger Sowry.
The group is tasked with considering the “most cost-effective options to provide a reliable, resilient and safe ferry service beyond 2026/2027″.
The terms of reference for the group ask it to consider alternative “ownership and funding options to provide a reliable and safe ferry service for the Cook Strait”, which would refer to KiwiRail’s ferry service, rather than the ports that service it.
The group is backed up by a Ministry of Transport study that has been commissioned to look at the “long-term requirements for a resilient Cook Strait connection”.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.