New Zealand / Local Democracy Reporting

The former port chair who questioned the ferry project plan from the start

22:24 pm on 26 December 2023

Former Port Marlborough and district councillor David Dew questioned the risks of the ferry terminal redevelopment in early 2022. Photo: Supplied / Stuff

A former Port Marlborough chairperson and district councillor says it came as no surprise that the government has called time-out on the Cook Strait ferry project.

After all, he had warned people of the risks long ago.

Early last year, the former councillor David Dew opposed the Marlborough District Council guaranteeing a $110 million loan on behalf of Port Marlborough for their share of the ferry precinct redevelopment, as part of the Inter-island Resilient Connection (iReX) Project.

Finance Minister Nicola Willis earlier this month announced the government would not be pumping any more money into the project, which meant it could not proceed.

"I always thought the day would come," Dew said.

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"I know a lot of people didn't want to think about it, but if you sat back and took a logical look at what was being put forward, it was pretty obvious where we were going to end up."

Dew was one of the 27 people that made a submission to the council during consultation on the $110m loan.

At the time, he said he had concerns about the risks the council was taking as the Crown had refused to guarantee the loan because it was already committed to supporting KiwiRail.

"They're making the assumption that you can trust the Crown, and trust state-owned enterprises," he said at the time.

The iReX project would have transformed the Interislander fleet, with two new rail-capable, low-emissions ferries and new terminal infrastructure in both Wellington and Picton.

The Marlborough District Council last year agreed to borrow up to $110m for its share of the Picton ferry terminal redevelopment. None of the money has been spent. Photo: Stuff / Anthony Phelps

The first new ship was meant to be launched in January 2025. Hyundai Mipo Dockyard had already been contracted to build the ships. However, Willis said she had been told Hyundai had not yet started building the ships.

In Picton, the iReX project included a new terminal building, a new wharf and passenger walkway, a new rail yard, new vehicle boarding, and a Dublin St bridge over railway lines, to improve traffic flows in the port town when larger ferries came in.

The Waitohi Picton ferry precinct redevelopment, as the Picton part of iReX was dubbed, was going to need up to 300 workers.

In a letter sent to the council in February 2022, before the council signed off borrowing the $110m, Dew asked the council what legal advice and analysis it had undertaken on the risks inherent in its deal with KiwiRail.

He told the council not to forget it was "well known" KiwiRail was totally dependent on Crown funding to operate, and a change of government could see funding cease.

None of the $110m had been spent before the announcement.

Work in Picton continued in the days after it was announced the iReX project would be wound down. Photo: Stuff / Anthony Phelps

Dew said last week that a subsequent meeting with the members of staff at the council did not ease his concerns at the time.

"Of course, my concern was the council would advance this loan, and spend a whole lot of money and get left high and dry," he said.

"It [meeting the council] made no difference.

"Because the reality of it was, when you get a project like that, if they got halfway through it ... and the port company had come back to the council and said 'well look, we've run out of money', what are we going to do?

"The council would have been left between a rock and a hard place."

He said they were "dead lucky" the project had been cancelled before the loan had been spent.

"It's a shame that so much time has been wasted going down the rabbit hole that was always a rabbit hole."

Local Democracy Reporting is Public Interest Journalism funded through NZ On Air