Cook Strait ferry replacement plan unveiled

The new Interislander ferries being delivered in 2029 will be about 200m long, 28m wide, and will have rail decks, Minister for Rail Winston Peters says.

He says the marine infrastructure in Picton requires replacement, so it will be replaced, while the Wellington infrastructure "has life left in it" and will be modified and re-used.

A timeline shows a shipyard will be selected for the build, with the government to sign off on contracts by the end of the year.

Multi-party infrastructure works will also be scoped costed and begin by the end of year.

Ferry Holdings, the Schedule 4 company the government has set up, is assuming full responsibility from the Treasury as of April, with critical advisors to be brought on board.

It would get governance structures - including co-funding - in place with both ports, and KiwiRail, before the third quarter of the year.

Peters said the government's solution would be "markedly cheaper" than the previous government's iReX project "because of a minimum viable and maximum reuse approach for the port infrastructure".

"We have said yes to affordability and no to extravagance," Peters said.

"The project leaders approached this task as though they were pricing the job, not delivering it. They did so because the previous government gave them every reason to believe they would get their way.

"The only method to stop behaviour like that is to do exactly as the minister of finance [Nicola Willis] did in December 2023. Today we have vindicated the decision of the minister of finance to stop the old project."

He said the ships would enter service by Christmas 2029.

"They will get you, your family, the caravan, the dog and all the rest, across the Strait, which is what New Zealanders want to happen.

"The design specifications chosen include vessel lengths of approximately 200 metres - longer and wider than the current fleet and capable of serving our people and goods into the future, but shorter than the large ferries ordered in 2021 which created significant infrastructure issues."

Peters said the government had not accepted the advice of the previous ministerial advisory group to buy two road-only ferries as that would be cheaper overall, and to contract one shipyard to do a deal.

"We believe in competitive tenders, and a full appreciation of what best serves our country. The road-only ferries came out as more expensive than buying road and rail ferries. The surest way to keep infrastructure costs low is to use what you've already got.

"Road-only ferries would require us to reconfigure the whole operation at considerable costs. Road and rail ferries mean we shunt large freight volumes in single movements, that saves time and time saves money."

He said the ferries would have a full service life of 30 years, and the ships' increased size compared to the current fleet would provide capacity to serve current and future demand.

He said the approach taken to the port infrastructure was the most cost effective "and contrasts sharply with the wanton demolition and extravagant specification under the cancelled project, where they assumed almost all costs would be at the taxpayers' expense".

Exact cost estimates for iReX vary depending on timings and who you ask. Total project costs at the time the ship contract were signed were about $1.45b, 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.

The new ferries would be highly manoeuvrable, designed to operate at 20 knots, capable of operating through the Tory Channel, and designed with "modern system redundancies and future proofing solutions to reduce carbon emissions".

The new Picton wharf would have a dual-level linkspan and double lanes, making on and offloading faster than today.

The road and rail masting yards would be modestly modified but not completely renewed like under iRex, and the road connections would be improved in discussion with councils.

The terminal buildings would, however, remain "as they are today", Peters said. He noted the main experience people had for boarding the ships was not the terminal building, but driving onto the ship with their own vehicle.

"While some may regret the absence of a Taj Mahal in Picton and a Sydney Opera House in Wellington, the people paying their taxes will not.

"The time will come when new terminal buildings will be needed, and spaces allocated when the ports are ready, but they are not needed now and not most certainly at your expense now."

He also kept open the possibility of purchasing a third ship in future, saying "anything's possible".

Peters was named the new minister for rail in December, promising a cheaper solution with ships to be in operation by 2029 when the current ageing fleet is set for retirement.