Advocates divided as government unveils Cook Strait ferry plan

Transport advocates are divided over whether rail-enabled ferries are needed ahead of the Coalition announcing its long-awaited replacement project for the Interislander ferries today.

There had been reports the government would buy two smaller ships for $900 million - much more than the $551m Labour contracted in 2018.

The coalition ditched the previous replacement project, called iRex, because the two mega ferries needed major terminal and port upgrades at Wellington and Picton, which would have pushed the overall cost to $3 billion.

Read more:

• How Labour's compromise over iReX ferry project led to $100m 'cost burn'
• Interislander: Officials' mistrust of KiwiRail led push to scrap project A recent history of Cook Strait ferry woes

Infrastructure New Zealand chief executive Nick Leggett said it wanted a Cook Strait ferry service that was reliable and safe, but he was not too concerned about roll-on roll-off rail capability.

Leggett told Morning Report the most important thing was a trustworthy inter-island connection that would protect economic productivity.

But Rail and Maritime Transport Union general secretary Todd Valster has warned the number of movements and time taken to shift freight on and off ferries that aren't rail-equipped will be highly inefficient.

"It does affect the rail network full stop by having two railways, one in the South Island and one in the North Island.

"It will be immensely difficult to run two railways, a lot of double up on cost," Valster said.

The rail line from Picton to Kaikoura would be put at risk if rail-enabled ferries aren't chosen, and regardless of what ships are purchased, the ports will need to be upgraded, he said.

"Picton is running out of a tent, a very large tent, but a tent nonetheless.

"Wellington's arrival terminal is a tent as well," he said.

"Most countries in the world are heavily investing in rail to reach climate change levels to improve it, we should be promoting freight off the roads, onto rail, of course we always need road transport but a mix of road, rail and coastal shipping is going to make New Zealand resilient."

A lot of money had been wasted by cancelling the previous decision and ports need to be upgraded regardless, Valster said. The money sunk on a break fee for the previous ferries could have gone towards it, he said.

Legett told Morning Report the cancellation had impacted the transport and infrastructure sector, but it remained to be seen who would pay for the new ports, and he suggested the private sector could get involved.

"People ... understand the importance of this link - it carries $30 billion of freight across Cook Strait every year, hundreds of thousands of people and tourists - it's a vital link to New Zealand.

"How we set it up is really important to the supply chain and to every Kiwi - [when] we think about perishable food that keeps us going, as well as export goods - we need this to be safe and secure."

There had been an "undue fixation" on rail enablement of the key ports in the iRex project, as freight goods carried by rail - as opposed to by road - accounted for only 7 percent of the total, he said.

New Zealand was the only country in world procuring rail ferries from new at the time the iRex boats were in production, he added.

A "fast turnaround" was more important for the New Zealand economy, and Leggett suggested that private sector funding might help deliver that, he said.

"We'd be looking today to see some innovation in the way not only the boats are procured but actually how the Cook Strait KiwiRail service is run, and that might mean private sector involvement as well."

In recent years, Interislander and its competitor Bluebridge have faced recurring mechanical challenges, with sailings cancelled and passengers reporting difficulty getting alternative bookings.

The government had said its version would be cheaper, even after taking into account the cancellation fees for the former contract.

Under the new plan, ports may be asked to bear more of the cost, potentially increasing prices for passengers and freight, and the Interislander service may shift to a new Crown-owned company.

Minister of Finance Nicola Willis told Parliament she stood by the decision not to increase funding for the project.

Labour commits to rail capability

Labour leader Chris Hipkins has committed to restoring rail-capability to the Interislander ferries, saying any alternative that lacks the ability to carry trains is an issue.

"We are committed to a rail connection between the North Island and the South Island."

Hipkins explained, if elected, he wouldn't immediately cancel any orders by the coalition, but "we would still be working towards restoring a rail connection."

"It might mean that we end up getting these new ships in the interim while we get new rail capable ferries in the longer term.

"The reality here is we've got to have a rail connection between the North and the South Island or the whole rail network across the country starts to become a lot less viable."

That would be disastrous for the roading network, he said, because you end up with a lot more trucks on the road.

The coalition is expected to announce their replacement for the cancelled iRex project on Wednesday.

Hipkins told Morning Report he understood the choice woud be two smaller ships, which he said was an issue because they would not have capacity to get trains across the Cook Strait.

"Why does that matter? That matters for everybody who drives on the roads, becasue it'll mean thousands of additional movements of trucks on the roads, that's going to mean more wear and tear to the roads and more traffic congestion."

He said the ability of moving long trains on and off larger ships would add "significant efficiency to the network," indicating this was a benefit the coalition wasn't taking into account.

Hipkins' said the cancelled iRex project was about future proofing the ferry service "by making a significant investment in something that was going to last a long time."

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