NZ Local News

Finance Minister Nicola Willis defends decision to not fund Cook Strait mega-ferries project

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  • The Government has declined KiwiRail’s request for an extra $1.47 billion for portside infrastructure needed for Cook Strait’s new mega-ferries.
  • KiwiRail says it cannot proceed without further Government funding and its board will now oversee the wind-down of the project and review plans for the vital transport connection.

Finance Minister Nicola Willis feared she would be left with a “completely open chequebook” if she had agreed to pour more funding into the Cook Strait mega-ferry project.

Meanwhile, Kiwi Rail chief executive Peter Reidy disputed any claims he threatened to pull the Interislander ferries after yesterday’s bombshell announcement.

Willis told TVNZ’s Breakfast this morning she couldn’t promise taxpayers the extra $1.47 billion required for port-side infrastructure, as part of plans to replace the ageing Interislander ferry fleet, would not have blown out further.

“It’s my responsibility to realise that every dollar we spend is a dollar that can’t be spent on hospitals, on schools, on the roads that need replacing across the country.”

Finance Minister Nicola Willis says the Government would not be funding the purchase of new ferries. Photo / Adam Pearce
Finance Minister Nicola Willis says the Government would not be funding the purchase of new ferries. Photo / Adam Pearce

KiwiRail was working through the cost of pulling out of its contract and she was confident they would do so at the least cost to the taxpayer.

Asked if the Government would consider selling off the ferry service – with commercial operator Bluebridge already taking freight and passengers – Willis agreed that Bluebridge did a good job.

“I do want to continue to see competition in ferry services across the Cook Strait. I think the Interislander is an important part of the mix.”

Willis said it was the Government’s position that it would continue to own KiwiRail, including the Interislander service.

“The question really is what is the best way to prepare the ferry service for the future. How do we fund that, how do we get the best service for the taxpayer.”

Newstalk ZB’s Mike Hosking asked Reidy if the rumours were true that he threatened to pull the ferries if they did not receive the funding, which Reidy categorically denied.

KiwiRail has an ageing Interislander fleet. Photo / Tennessy Weir
KiwiRail has an ageing Interislander fleet. Photo / Tennessy Weir

“This Government has made it clear that they see the ownership of the ferries business as part of our portfolio and part of New Zealand,” Reidy said.

“So any suggestion that I heard yesterday that the ferries were in doubt, you can simply dismiss because you can’t have a two-island nation with no ferries, can you?”

Reidy also denied they purposely lowballed the original figure.

“We thought it was the right solution for New Zealand to deliver a safe and resilient service across the Cook Strait,” Reidy said.

“Ultimately, when we went through that, we said it can’t be done for that money.

“The risk was too high for New Zealand, for our customers.”

Rachel Maher is an Auckland-based reporter who covers breaking news. She has worked for the Herald since 2022.

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