An 'announcement of an announcement' of two new boats

The wait for replacement Interislander ferries will drag until 2029, as ministers reveal a plan to buy two smaller ships.

Mōrena, and welcome to The Bulletin for Thursday, December 12. Written by Joel MacManus and Alice Neville.

In today’s edition: Labour ‘loses confidence’ in speaker; New Zealand’s second Emissions Reduction Plan unpicked; the world this year described in one sentence by a bunch of people; but first, Joel MacManus reports from parliament on yesterday’s ferry announcement

Crown company created to procure two new Interislander ferries by 2029

The long-awaited drama about the new Interislander ferries reached a pivotal moment on Wednesday when finance minister Nicola Willis and newly appointed minister for rail Winston Peters held a press conference titled “ferries announcement” in the Beehive Theatrette. The two ministers revealed that the government had created a new Schedule 4A Crown company to procure two new Interislander ferries by 2029. As 1News reported, shareholding ministers of the new company would be the minister for rail and the ministers of finance and transport. Peters would also take on the responsibility formerly held by the Minister of SOEs for KiwiRail and NZ Railways Corporation. As RNZ’s Russell Palmer reports, Labour leader Chris Hipkins described it as “an announcement of an announcement”.

Precious little detail

Willis and Peters wouldn’t say how much the ferries would cost or whether they would be rail-enabled. Willis said a funding envelope has been established, that the costs are expected to be much less than would have been the case with Project iRex but that they were commercially confidential until procurement and negotiations for landside infrastructure were completed. The projected costs of Project iRex had escalated from $775m to $3.2bn, mostly due to the landside upgrades that would be required to handle the larger ships.

The government is still open to alternative pitches from the private sector and the idea that the ferries could be operated by an entity other than KiwiRail. The new ferries will be purpose-built; Willis confirmed that the government had looked into buying secondhand ferries, but there were no suitable ships on the market. The Herald’s Georgina Campbell did not mince her words (paywalled) on the lack of detail, writing, “It makes one wonder what on earth the government has been doing for the past year, especially because even these vague details aren’t set in concrete”.

This morning, The Post’s Luke Malpass describes handing the project over to Peters while retaining the option to receive pitches from the private sector, which keeps the Act party happy, as having a certain political elegance to it. But, he writes “it does have the downside for the government of creating a political vacuum on the issue for many more months.”

Opposition 'astounded', 'disgusted' over 'omnishambles'

Cancelling the iRex contract early into her government’s term was a chance for Willis to put the hammer down and send a clear signal that hers would be a cost-cutting government that wasn’t afraid to make hard choices. With news of an expensive break-contract fee and more high-profile incidents of the current Interislander ferries breaking down, questioning about the wisdom of that decision hasn’t abated. In an opinion piece for Newsroom in August, Carl Findlay, National Secretary of the Maritime Union of New Zealand, wrote, “Ever seen someone lose a billion dollars on a single roll of the dice?”

Following yesterday’s announcement, Act leader David Seymour claimed the cost was “approximately half the cost of Labour's proposal”. Peters would not say how much the new ships might cost but called Seymour’s comments inaccurate and unhelpful, RNZ reported.

Labour’s finance spokesperson Barbara Edmonds said it would end up costing more. “[Willis] has taken a whole year to come up with smaller ferries that are going to cost the country more money in the long run. The portside infrastructure will still have to be built, she’s just burdening future New Zealanders with the cost,” Edmonds said.

Hipkins said he was “astounded” that after a year, there was still “no more information about what they're actually going to do”.

Green party transport spokesperson Julie Anne Genter said the Hyundai order for two rail-enabled ferries for $550m was “one of the best deals the country ever signed up to” and emphasised that this new deal meant the new ferries would arrive in 2029 rather than 2026. Genter described Willis’s decision as “catastrophic” and said she thought it was an “omnishambles”.

The obvious question now is what kind of ferries the government will be able to find and how much money it will save relative to Project iRex. Given the amount of money already spent on the Hyundai ferries and the cost of breaking the contract, it will have to be a significantly cheaper deal overall to still make the numbers work. Willis and Peters seemed confident they could make it happen.

Timeline to date

• November 2018 - KiwiRail completes a business case indicating a preference for two rail-enabled ships, a total project cost of $775m.

• November 2019 - KiwiRail submits a budget bid for $682m, estimating the total costs to reach $1.4 billion.

• May 2020 - The Labour government allocates $400m in Budget 2020.

• January 2021 - KiwiRail submits another budget bid, this time for $565m.

• June 2021 - KiwiRail enters into a fixed-price contract with Hyundai Mipo Dockyard to construct two ferries, which will be delivered in 2025 and 2026.

• October 2022 - It becomes clear that the port infrastructure costs associated with the project are escalating in cost and pose a risk of failure.

• February 2023 - Updated estimates put the project's cost at $2.6bn. KiwiRail submits a bid for $1.2bn in Crown funding, triggering a series of reviews and updates.

• December 2023 - Nicola Willis announces that Cabinet has declined to fund the iRex project due to cost blowouts and the likelihood of future repeats.

• February 2024 - The government appoints a ferry ministerial advisory group to investigate options and advise on what would make a viable ferry service.

• November 2024 - Willis and Peters announce a new procurement process for two smaller ferries.

This Christmas, give the gift of extraordinary.

After a bumper 2024, New Zealand Opera have just unveiled a powerhouse 2025 season, showcasing some of the most incredible voices that Aotearoa and the world have to offer. From intimate chamber works and uplifting community-focused performances to an unmissable staging of one of the most beloved operas ever written, the season truly has something for every entertainment appetite. So slip some tickets or a gift voucher under the tree, and give the art lover in your life an experience they’ll never forget.

Check out the full season calendar and book now at NZ Opera (sponsored)

Labour ‘loses confidence’ in speaker over fast-track bill ‘constitutional hiccup’

The cross-party consensus on the greyhound racing ban brought wholesome scenes to the debating chamber on Tuesday, with MPs of all stripes inspired to share heartfelt tributes to the canines in their lives. Predictably, it wasn’t to last, and the evening sitting took a dramatic turn courtesy of an unlikely protagonist – the clerk of the house, David Wilson. Earlier in the day, RMA reform minister Chris Bishop had put forward an amendment paper to the Fast-track Approval Bill including a large number of changes. Parliament was sitting under urgency for the committee of the whole house stage of the legislation that evening when it emerged that Wilson, who provides advice to the speaker on procedure and parliamentary law, had advised that the government’s decision to select 149 applicants that could have developments fast-tracked created a “private benefit” to some of the parties involved, which a government bill is not supposed to do. The deputy speaker, Barbara Kuriger (a National MP), upheld that advice, ruling that the amendment identifying the fast-track projects was “out of order”, explains Tom Pullar-Strecker in The Post, while Bishop “sat by with furrowed brow, shuffling through papers and twiddling his pen”.

Yesterday, however, speaker Gerry Brownlee overruled the decision, essentially relying on the fact the benefit to the named individuals was not guaranteed, it just put them ahead in the process, Victoria University law lecturer Eddie Clark told RNZ. The opposition wasn’t happy, with Labour saying it had lost confidence in Brownlee as a result of the ruling. Clark, meanwhile, said the episode underlined the pitfalls of rushed lawmaking, and Pullar-Strecker wrote that an “unintended consequence of the constitutional hiccup is that it may have provided a distraction from 29 government amendments to the bill that have been put forward at a stage so late they won’t now undergo what passes for select committee scrutiny”.

New Zealand’s second Emissions Reduction Plan unpicked

The government says it’s a “technology-led approach”. Critics say it’s an “abject failure”. This morning, The Spinoff’s Shanti Mathias looks at what’s in New Zealand’s freshly finalised second Emissions Reduction Plan.

There are eight key policies in the plan, and it’s been described as a “technology-led approach”. Climate change minister Simon Watts said, “We can have affordable and secure clean energy, an efficient, competitive agriculture sector, and a booming economy while meeting our climate change commitments.”

As reported by RNZ’s Eloise Gibson documents released to RNZ under the Official Information Act show the fossil fuel industry supporting the plan. “Your officials should be commended for the practical list of potential policies ... (such as Carbon Capture and Storage) and the long list of discontinued policies ... which were expensive and counterproductive," said Energy Resources Aotearoa in a briefing to Simeon Brown.

Greenpeace spokesperson Sinéad Deighton-O’Flynn described the plan as an abject failure.

The future of The Spinoff depends on its audience

As many of you will have seen, we published an open letter outlining the financial situation we find ourselves in. Only 2% of our audience financially supports us. Doubling that number is our last, best shot at retaining the ability to carry on doing what we do. To those who have already supported, we thank you. If you can and haven't yet, please become a member or donate today.

Best of 2024:

As we race towards the end of the year, it’s time to look back at some of the biggest and best Spinoff stories from 2024.

This morning: The half-a-million-dollar decision that still haunts the book industry.

First published in September, books editor Claire Mabey investigated the impact of the decision to award Narrative Muse $500,000 of Covid recovery money by the Ministry of Culture and Heritage to boost sales of New Zealand books. Three years on, industry insiders told Mabey that it has had little, if any, impact.

Click and Collect

• We got a bunch of people to summarise the world in 2024 in one sentence. Some managed it in (or could only manage) just one word.

• Auckland Airport pinpoints problem that led to travel chaos for thousands of passengers

• One of the women indecently assaulted by members of the Vietnamese government at a Wellington restaurant in March tells her story to Stuff’s Olivia Wannan and Paula Penfold.

• Māori tribes make rare plea to King Charles for intervention in New Zealand politics

• Immigration staff sacked after 'concerning' Teams chats discovered

• Cocaine, methamphetamine use soars in New Zealand; call for urgent health action

• Union takes legal action against the government over restriction on working from home

• New Zealand men main reason for bad slump in literacy, numeracy test

• Audrey Young: Rating National’s 20 rookie MPs after their first year in the job (paywalled)

Right now on The Spinoff

Jihee Junn peels back the layers of Auckland's Korean culinary boom. Harry Ricketts reflects on his similarities to Persuasion's Anne Elliot for The Spinoff Books Confessional. Behind on holiday gifts? Here is a heap of cool stuff from Māori and Pasifika-led brands. Toby Manhire describes how Mt Smart became the most electrifying Auckland destination of 2024. Duncan Greive analyses Stuff's move to ‘consciously uncouple’ into two separate digital and print businesses. Liam Rātana wonders what's next for Whakaata Māori after the scrapping of its daily news bulletin.

That’s it for another day. Thanks for reading and see you back here tomorrow.

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