Decision on new Interislander ferries taking longer than expected, risk of more breakdowns remains

“We support this recommendation because we are not confident that proceeding with any of the scaled-up options represents value for money,” Treasury officials said.

The “scaled-up” options were redacted in the report.

The Government announced $600,000 for the business case in this year’s budget.

Treasury acknowledged other measures were being taken in the short to medium term to reduce the likelihood of incidents, including navigational changes and improved inspections of Cook Strait ferries.

“We note these funding solutions, and mitigations, do not address the underlying problem, which is the risk of breakdowns with ageing ferries.

“The Ministry of Transport and the Treasury are undertaking further work on the future of the inter-island services, and the appropriate level of Crown involvement.”

Since the report was written, Interislander’s Aratere ferry ran aground and Bluebridge’s Connemara ferry lost power and started drifting.

There are ongoing investigations into both incidents.

The Government effectively cancelled a plan to replace KiwiRail’s ageing Interislander fleet with two mega-ferries soon after it came to power. Project costs had ballooned to almost $3 billion and Finance Minister Nicola Willis announced ministers had refused to fund the blowout.

A ministerial advisory group was appointed to give the Government independent advice on alternative options.

In early July, Willis said the public would “find out about the ferries once ministers have made decisions”.

”I expect that will be within the quarter,” she said.

That quarter finished on Monday.

Willis and Prime Minister Christopher Luxon are now saying there will be a decision by the end of the year.

“We’re evaluating the ministerial advisory group’s advice and we’ll have more to say about it towards the end of the year,” Luxon said.

Willis said ministers were testing proposals, asking questions and making sure decisions were based on good advice.

There is speculation the question of whether the ferries should be rail-enabled is behind the hold-up.

Regardless of when an announcement is made, KiwiRail is preparing to keep its existing fleet running until 2029. The mega-ferries were due to arrive in 2026.

KiwiRail has received advice from maritime experts suggesting there are no systemic issues that would prevent the life of the ships from being extended, subject to investment and enhanced maintenance.

Meanwhile, a direction limiting new large ships from using Tory Channel, like KiwiRail’s mega-ferries, has been lifted.

Tory Channel connects the inner Queen Charlotte Sound with Cook Strait. The entrance is narrow and tidal, making it challenging to navigate.

The risk of an incident occurring increases with longer vessels.

Marlborough harbourmaster Jake Oliver previously issued a direction limiting the size of new ships wanting to use the channel to a maximum length of 187m.

The mega-ferries would have exceeded this as they were nearly 40m longer and at least 5m wider than the ships in the existing Interislander fleet.

Any variation to this direction would be considered case by case and only when safety was not compromised. It was never confirmed that KiwiRail’s mega-ferries would be permitted to operate in Tory Channel.

Maritime New Zealand said the direction was lifted because there were already rules to manage the risks it was designed to address.

Willis has previously cited the Tory Channel concerns when making the case against the mega-ferries.

“Those ships were so much bigger – around 40m longer, 10m wider – that they wouldn’t have actually fit in the existing berths at either port”, Willis said in June.

“There was a real question about whether the ports could be fixed up in time for their arrival. Then the harbourmaster had concerns about whether those ships would be manoeuvrable in the narrow straits of the Tory Channel and coming into the sounds.”

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.