In Parliament last week, he said Monday’s update – promised by the end of the month – would outline the type of ferries and the infrastructure plan, including port upgrade costs.
“There is a performance indicator in the freight world called a DIFOT – delivered in full on time. We’re on track to deliver the goods in full and on time,” Peters said.
What we won’t learn
However, it will not include details on the shipbuilder being selected by the Government and the results of the Government’s tender process seeking innovative ideas from the private sector. Those will be provided in two updates later in the year.
Hyundai-Mipo Dockyard (HMD) – which had the previous contract – and a Finnish firm are among the shipyards confirmed to be competing for the contract. Peters visited the South Korean HMD this year and noted this month it was the No 1 shipbuilder in the world.
A key question is whether the ships will be able to carry trains that can drive into the cargo hold – referred to as “rail enabled”. Other options include road bridging – where freight is lifted off trains, loaded on to the ships, then loaded back on to trains on the other side – which the Government has referred to as “rail capable” or “rail compatible”.
Only one of the three ferries in the present Interislander fleet can carry trains, and the ships set to be delivered next year under Labour’s plan may not have been able to use their roll-on, roll-off rail capacity until 2027 at the earliest.
Rail links
Concerns have been raised about the efficiency of road bridging and the ability for KiwiRail to transport rail equipment between the North and South islands. Some commentators have suggested that without at least some capacity for rail shipping, new railyards would be needed in the North Island.
What form the ships take will affect the type of port infrastructure required. Put simply, big ships add to the up-front construction cost, as does rail enablement.
The port upgrades – particularly the need to update the infrastructure in both Wellington and Picton, plus expanding capacity to handle larger ships, adding stronger seawalls and earthquake-safe moorings and linkspans – were the main source of cost blowouts under the previous Government’s plan.
Port costs
Finance Minister Nicola Willis indicated in December the Wellington and Picton ports would be asked to bear more of the cost burden of the upgrades.
Peters said engagements with the sector had shown there was “no shortage of good, pragmatic, sensible ideas when one is willing to listen and discuss”.
“We have met unions representing Cook Strait mariners, engineers, masters and crews. We have met on site with CentrePort to hear their views and see the infrastructure that has served our country for decades. We’ve met with the mayor of Marlborough, Nadine Taylor, and enjoyed hearing the priorities of her community and her council’s 100% commitment to practical, sensible solutions.
“The small but effective team at Ferry Holdings has met with KiwiRail, both ports’ officials, councils and many other interested parties, and they have done an extremely good job in the service of us all in this House and in the service of our country.”
Cheaper plan
The coalition remains confident its solution will ultimately cost less than the iReX project under Labour.
Willis has said that includes the break fee for the previous contract – the full cost of that has not yet been confirmed. The Government set aside $300 million for it in a contingency fund, but final figures could be lower or higher.
In July, was reported a further $484m had already been spent on the project, including $347m on terminal design, consenting and enabling works, and other works to keep the ports usable after iReX was cancelled.
Exact cost estimates for iReX vary depending on timings and who you ask. Total project costs at the time the ship contract was signed were about $1.45 billion, and by the time it was cancelled that had increased to just under $3b – some of that cost borne by KiwiRail and the ports.
Since December, Willis and Peters have pointed to officials’ advice warning costs could further increase, perhaps as high as $4b.
- RNZ
