By
Alex Smith |
The Government of New Zealand is establishing a new company to procure two new ferries for the route between the country’s North and South Islands.
The two new vessels are set to begin service in 2029 and will replace the existing three ferries in the Interislander fleet once they reach the end of their operational life.
The establishment of the new company follows the cancellation of the Inter-Island Resilient Connection (iREX) project by operator KiwiRail, after the New Zealand government refused additional funding in 2023. The project was set to deliver two rail-enabled ferries by 2026.
“This decision will ensure New Zealand has a safe, reliable and resilient service to move people and freight between the North and South Islands,” said Nicola Willis, minister of finance, public service and social investment and associate minister of climate change. “The expected cost of the project is commercially confidential until procurement and negotiations for the associated landside infrastructure have been completed. However, a funding envelope has been established and the costs are expected to be much less than would have been the case with Project iRex – even once break fees are included.”
The company will have a dual mandate, according to the New Zealand government. Its first responsibility will be to undertake the procurement process for new ferries and report back to ministers before final decisions are made. The second will be to support officials in their work with ports, KiwiRail and other stakeholders to ensure onshore development is advanced enough for the New Zealand cabinet to make informed final decisions on ferry procurement.
The private sector is also being invited to put forward alternative proposals for a ferry service during the first stage of the procurement process.
“The government is taking this additional step to ensure no good ideas are overlooked,” said Wisnton Peters, minister for rail. The quadrupling of the cost of Project iRex from NZ$775 million ($449 million) to more than NZ$3 billion ($1.74 billion) and possibly as much as NZ$4 billion ($2.32 billion), is testament to what happens when a project is mismanaged. Any alternative proposals received will be assessed along with the results of the first stage of the procurement process in March, after which final decisions on next steps will be taken.”
KiwiRail welcomed the government announcement on the future of the service, saying it gives “certainty” to Interislander’s regular passengers and freight customers.
“It is pleasing that the government has chosen to invest in the future of Cook Strait ferry services by deciding to procure two brand new ships, which will safeguard reliability into the future,” said Peter Reidy, chief executive of KiwiRail. “The specifications that the government has indicated mean the ships will be larger than the current ships, so there will be room for future growth. KiwiRail will work with all parties to support the procurement and smooth introduction of the new ferries when they are ready to enter service for our customers.”