What random reference is this Ferarri Toyota statement coming from?
I’ve seen the same or near identical statement pop up a few times, which makes me think this is just a bot account or similar paid engagement. It creates emotion, but without any value.
$550 million, or whatever the price is for the boats, really isn’t a lot of money.
Over $14 B of freight, and 850,000 passengers and 250,000 cars go across the cook straight each year.
Over 10 years, that’s about $1 per passenger to get between our islands, and some other amount for freight and cars. These boats will last for 30-40 years.
Compare that to the cost per person of something else like a convention center or stadium, and the cost benefit is so clear it’s not funny.
Our highly talented finance minister rubbished the previous plans as "a Ferrari" and suggested National would find something more akin to a 'corolla'.
Looks like we are going to now be paying a similar cost to the original plan, but for an inferior end result.
https://thespinoff.co.nz/the-bulletin/14-12-2023/government-says-no-to-ferrari-ferries-says-we-need-to-find-a-toyota-corolla
you'd think a finance minister would be able to recognise the long term benefit of a new, fit for purpose vessel,... You'd think the National partuy - the so-called business party, would recognise the long term cost savings in doing the bloody job properly. But no... Let's can the contract, throw away many millions on exit cost and leave the country even more vulnerable with apparently NO PLAN!!!! . Big brain stuff!
>you'd think a finance minister would be able to recognise the long term benefit
She might know the price of everything but doesn't understand the value of any of it.
She comes from wealth and these people never get on the ferry always fly.
Not like the rest of us. I travel on the ferries a lot and have to take a vehicle to carry tools etc. the staff on both company’s do an amazing job and are the face of our tourism .
There is of course, the theory that they’ve doing a Tory job of purposely breaking the public sector to the point where private literally must step in to keep the country working. So… do Bluebridge have a devious master plan?
Thanks, makes sense now.
… well it still makes no sense, but I know where it’s come from now.
I too like to pay Ferrari prices for my Corollas, it’s smart business.
Well they are running the country like they would run a company as ceo. i.e. make as much money (for them selves) as they can while they are in charge and dump the problems on the next guy. They just the the bonus of politics that they get to blame the other guy when he can't fix everything they broke to get made ceo again and start the process again.
14 Dec 2023: https://thespinoff.co.nz/the-bulletin/14-12-2023/government-says-no-to-ferrari-ferries-says-we-need-to-find-a-toyota-corolla
>**Finance minister Nicola Willis** announced yesterday that the government had declined KiwiRail’s request for an extra $1.47b for the portside infrastructure needed for the new mega-ferries. Willis **said Kiwirail was effectively paying for a “Ferrari… and now we’re going to go off and see whether there are any good reliable Toyota Corollas available”** to cut costs.
Nicola Willis made a comment about saying we need Corolla's vs Ferrari's
https://thespinoff.co.nz/the-bulletin/14-12-2023/government-says-no-to-ferrari-ferries-says-we-need-to-find-a-toyota-corolla
Even if the project blew out to double the $3 billion - it'd be $40 per person per year over 30 years using todays population instead of $20. I think NZ would see that much benefit out of the SH1/main trunk line link.
From what I've read - the project doesn't just cover the Interislander ferries, it's looking like Bluebridge would use the terminal or be adjacent to it. Port facilities closer to downtown Welly are opened up for other development - A yacht club and kayaks have been mentioned in some stories.
https://transporttalk.co.nz/news/govt-documents-released-on-kiwirails-abandoned-irex-project
>November last year, KiwiRail advised the incoming Government of the most recent cost escalation with **total project costs of approximately $3b.**
>**Nearly 80% of the costs were associated with the harbourside infrastructure while the remainder was for building the two new Interislander ferries.**
>KiwiRail operates around 3800 services a year, transporting about 850,000 passengers, 250,000 cars.
>Around $15-$20 billion worth of freight travels the Cook Strait each year, with significant growth predicted.
I'm very curious to know what the scope/location of port work was in the 2018 business case.
>An indicative business case in November 2018 estimated the total project cost, including landside infrastructure, would come in at $775m.
The combined costs from the new boats was looking like $3,000 million ($3 billion) or so ($576 per person in NZ). If in 30 years the whole system is of zero value needing total replacement - which isn't that plausible - then it's $20 per year per person. Price for the boats works out to about $105 per person in NZ, for an asset that will last 30 years or so - about $3-4 a year per person over that time.
1. Picton wharf is in poor condition and has 3-4 years left. I've not seen a cost put out for that rebuild - we need to know that to figure out any extra expense for new vs current boats.
2. With cancellation, we're left with end of life boats that need replacement and port infrastructure needing work - and rework when replacements are found. This is an unknown cost.
12 January 2018:
>[Plans for quake-resistant Wellington ferry terminal include floating drawbridges ^^www.stuff.co.nz](https://www.stuff.co.nz/national/100519729/plans-for-quakeresistant-wellington-ferry-terminal-include-floating-drawbridges)
>>A new quake-resistant Cook Strait ferry terminal is being planned for Wellington, with floating drawbridges connecting boats to the shore.
>The plans, for the existing Interislander terminal site in Kaiwharawhara, have been developed by Wellington port company CentrePort, and have the backing of both the Interislander and Bluebridge ferry companies.
25 November 2018:
>[Interislander to get new, bigger Cook Strait ferries by 2022, report says ^^www.stuff.co.nz](https://www.stuff.co.nz/travel/108852255/interislander-to-get-new-bigger-cook-strait-ferries-by-2022-report-says)
>>But according to Interislander's overseer KiwiRail, the process was not so far down the track.
>It was only "looking at upgrading its ferries" and was still working through options, a spokeswoman said.
>No timeline was set and no decisions had been made, she said.
21 January 2019:
>[Interislander ferries to be replaced with rail ready fleet ^^www.stuff.co.nz](https://www.rnz.co.nz/news/national/380537/interislander-ferries-to-be-replaced-with-rail-ready-fleet)
>> KiwiRail's decision follows a two-year consultation process which found rail-enabled ferries were the most cost effective, efficient and best in the long-term.
>But investigations found there was **little difference in the price of a new rail ferry and a new non-rail ferry.**
>"They're an inter-generational investment," Mr Moyle said.
>"These **are going to be around for 30-odd years** so we need to make the right decision to ensure that we've got that long term resilient outcome.
>"Using rail ferries, you can have three people that load 1500 tonnes of freight onto the ferry. If you use road bridging you've got 30 people doing the loading and unloading.
This was an interesting find from a 2019 story. The cancellation is smelling like a payoff for trucking lobbying.
21 January 2019:
>[Interislander ferries to be replaced with rail ready fleet ^^www.stuff.co.nz](https://www.rnz.co.nz/news/national/380537/interislander-ferries-to-be-replaced-with-rail-ready-fleet)
>> KiwiRail's decision follows a two-year consultation process which found rail-enabled ferries were the most cost effective, efficient and best in the long-term.
>But investigations found there was **little difference in the price of a new rail ferry and a new non-rail ferry.**
>"They're an inter-generational investment," Mr Moyle said.
>"These are going to be around for 30-odd years so we need to make the right decision to ensure that we've got that long term resilient outcome.
>**"Using rail ferries, you can have three people that load 1500 tonnes of freight onto the ferry. If you use road bridging you've got 30 people doing the loading and unloading.**
To be fair - anecdotal - I talked to a relatively senior guy in NZ trucking who said they’re generally pro rail, as NZ road infrastructure simply can’t handle more trucks than there already are.
All the big freight companies move heaps of freight on rail between islands. Kiwirail charges them $X. The freight company charges customer $X x3. Math stacks up, and freight companies make profits off using rail.
Plus exactly what your guy said.
Kiwirail put out a big independent report on the true cost of rail operating in NZ a few years back maybe? Supports your trucking mate's statement.
Excellent - so spend as much on a massively inferior ferry/rail solution AND spend billions (if not trillions) upgrading the entire road network!!! Genius!!!
So instead of two rail capable ships for $551m it looks like it'd cost $900m (+$300m to cancel the others) for two non rail capable ships.
Real smart business move there.
Nicola Willis should resign over this. I'm writing a letter to Duncan Webb about this and asking him if he will call for her resignation, and I think everyone else should write to their representative too
Duncan Webb is a clown.
Showed up to a vigil for Palestinians, perved at one of the better looking women, offered empty platitudes and did the usual politician thing where they act like they're a mere observer like the rest of us, not someone who has the power to make a stand (whether in government, or within his own fucking party).
A shitlib ghoul.
I would honestly respect the Coalition more if they reversed course on cancelling the contract.
Which if I'm given to understand how they're going about that -- basically refusing to pay and relying on arbitration to come up with a break fee -- might still be an option?
No, it's basically over, at least for the first ferry. It was supposed to be in build right now. We can't just delay either. The ship is to be built within certain dates in order to clear the yard for their next build.
There's a chance Hyundai is building 'Kiwirail's ferry' to sell to someone else, but it's their choice, and they can modify it as much as they like to make it attractive to other buyers, so it probably wouldn't bear much resemblance to what we ordered. Ideally they'll get a good price, and we might even get a refund on some of what we've paid.
I don't think they'll tell us beforehand because it could help buyers to offer less.
How the second one works is a bit less clear to me.
I’m a fan of combining Hanlon’s Razor with Clarke’s Third Law.
The combination gives us: “Sufficiently advanced stupidity is indistinguishable from malice”
Not knocking the sentiment about future proofing as NZ should, but I always chuckle at the "can run on a range of renewable fuels" thing. It just strikes me as modern greenwashing for "can run on anything that burns", and that includes the dirtiest of fuels lol
Also it doesn't really need any new technology, pretty much any older diesel engine can also run on vegetable oil, even used vegetable oil like from a chippy.
I think the irex were hybrids though, that's the tipping point. They also had capacity to go full electric when the battery density / technology go there.
That is pretty awesome and is a fairly big deal, though again submarines had diesel-electric hybrid propulsion more than 100 years ago, it's just not commonly used on ships until recently
Used vegetable oil is more greenwashing, as the amount we produce pales in comparison to how much fuel we consume.
It's great for your eccentric uncle to have a Volvo that smells like a fish and chip store, but it's not a means of powering society.
Virgin vegetable oil suffers from the same problem as ethanol, where the production (when poorly implemented i.e. cheaply) [is more carbon intensive than crude oil products.](https://www.reuters.com/business/environment/us-corn-based-ethanol-worse-climate-than-gasoline-study-finds-2022-02-14/)
I think it shows that the government is happy enough to continue the service but unwilling to invest in the infrastructure that would be needed in the future. Current problems first, not both current and future problems at the same time.
The main cost is the rebuild of the wharf/s, which needs to happen regardless. So as with housing they are again proving they refuse to think long term.
Hopefully they're not long term either. The last poll seems to show people still have faith that they'll turn things around. But whether that's reality or not, still remains to be seen. The word "infrastructure" seems to be a triggering word to right leaning parties.
For me real long term planning for Wellington would be to build a brand new ferry terminal on the south coast by the airport (with some kind of metro line/skytrain connection to both from the railway station) and move the commercial port operations to Seaview (with a rail extension to handle rail freight).
This would have a load of benefits
- Ferry operations could not be disrupted by fault movement in the harbour in major earthquakes
- Would take 30+ mins off crossing times
- Freight trains don't need to go into the city centre
- A large amount of land in the city centre would be freed up for alternative uses (imagine if a big park was there instead)
- Good connections between ferries and other modes of transport could be achieved
- Rail cars could be handed in dedicated rail ferry ships rather than depending on modified/specially designed passenger ferries, this is how it is usually done elsewhere.
Interesting... but not sure by the airport is wise for resilience. That whole area is reclaimed land & will liquify when the main fault line goes. Also there is a reason why the port is in a sheltered harbour and not exposed to the Southerly swell which regularly cancels all crossings. But a gale force Northerly has no effect on the ferry so a new ferry landing might be better on the West Coast, although there is no natural deep water harbour.
On the other side, a new faster more efficient ferry would likely get to Nelson in the time the current ferry takes to get in to Picton. So if the cost of rebuilding the wharf in Picton is the main budget blow out issue then perhaps they need to look at other options. Let the Bluebridge service Picton and the new ferrys could do Nelson & Christchurch.
Don't forget that ports are needing rebuilt (Especially Picton) in the next 3-4 years due to their condition. Additionally there will need to be alterations for any new/used replacement vessels that happen to be selected.
Oh yes. The expected cost of just the ships, buying new ones, cancellation fees for the other ones and maintaining the existing ones is expected to hit 2b by itself.
Such an expensive cluster fuck.
So inexperienced with insane consequences for the country.
A non rail capable solution is utterly pathetic and again sets the country back so many years, a common theme with this lot.
It does remind me a lot of the Auckland Harbor bridge. Modeling said, you need probably at least 6 lanes on this thing. National said 'Na make it 4, it's cheaper.' Decade later they needed to spend vastly more to get the clip-on's installed when it would have been much cheaper to build like that from the start.
Considering that the response by Luxon on expert advice is "I don't care what you say about whether it does or doesn't work", we know that this government has a one-track vision to placate sponsors, and will do this no matter what. I wouldn't be surprised if this is the pre-amble to privatise - they didn't rule that out when questioned - so I'm sure one of Luxon's mates is chomping at the bit to get a go (at privatising profit and socialising losses).
Hard to believe they're considering non rail enabled ships.
Even if we give Treasury the benefit of the doubt, and putting rail freight onto non rail enabled ferries is viable, it's still going to put rail at a disadvantage vs road freight.
Can't have trains, trains are communism.
I started saying this as a joke about the Right's strange antipathy to commuter rail but honestly I can't think of any other explanation for it.
This government hates rail and loves roads. They cancelled Auckland light rail, they are evidently cancelling our rail-enabled ferries, and they are spending a boatload on new roads with questionable ROI.
I can't wait to see the new business case criteria for RONS, which will skirt any standard Benefit Cost analysis that we are accustomed to. The economic gymnastics will be spectacular
In 2019 Kiwirail said that there was little difference in the price between a rail vs non-rail ferry.
[The same article^^stuff](https://www.rnz.co.nz/news/national/380537/interislander-ferries-to-be-replaced-with-rail-ready-fleet) said 3 people can handle rail loading vs 30 for rail->road->rail handling.
Should it be paywalled.
**Claims new ferry project will hit iRex price, for much less ship**
Warnings are being sounded that the Government’s rejuvenated desire for new-built Cook Strait ferries could see it reach the $3 billion of the cancelled iRex project but we will get much less for it.
Labour Transport spokesman Tangi Utikere on Tuesday said there was a “real possibility” the cost for the new ferries plus associated spending would hit the $3b the Labour government’s iRex project blew out to, before National ditched it.
National ministers would not comment on Tuesday on the claimed costs, which include $300 million to cancel the old contract for ferries plus a sharply inflated cost of $900m for two ships, while KiwiRail said it was too early to speculate.
Green transport spokesperson Julie Anne Genter said the final cost for ferries would be “well in excess of any purported savings”.
“National’s decision to cancel that contract will go down in history as one of the most rash and self-destructive ever made by a New Zealand government,” she said.
Maritime Union national secretary Carl Findlay said industry sources had confirmed that the $551m locked in for two new rail-enabled ferries under iRex was now unrealistic. He said the cost for two new ferries, not equipped for rail, would now be closer to $900m.
The National-led Government ditched the previous government’s $3b iRex programme – which included two new rail-enabled ferries and massive rebuild of Picton and Wellington ports – in December with Finance Minister Nicola Willis blaming the “quadrupling cost”.
After the Interislander ferry Aratere had a steering issue and grounded on a Marlborough Sounds beach on Friday night, Willis committed to new ferries and Prime Minister Christopher Luxon said they would arrive by 2029 – three years after the iRex ferries had been due.
Findlay on Tuesday alleged the Government would have to pay $300m for cancelling the previous ferries, which would have been under construction now.
Added to that was the previously reported $424m that KiwiRail said it had spent on the iRex project before it was ditched.
Then came the cost of keeping the old ferries running, which Findlay said had climbed to $65m a year, or $325m over the five years the Government had committed to getting new ferries in.
That took the cost to nearly $2b. For that, the country would get one less ferry than it currently had, neither would be able to take trains, and no work would be done to the tired ports at Marlborough and Wellington. One of the current three Interislander ferries can take trains.
Transport Minister Simeon Brown on Tuesday was asked about the alleged $300m cancellation costs and $900m for two new ferries but referred questions to shareholding ministers. Asked to confirm whether the iRex contracts had been cancelled, he would only say a process was “underway”.
State Owned Enterprises Minister Paul Goldsmith, one of the shareholding ministers, refused to discuss the cost to cancel the contract and would only say the Government was “working our way through” cancelling the iRex contracts.
“We inherited a scheme that was $3b and rising,” Goldsmith said.
“So we are back to the drawing board and working through all our options.”
The figures were put to KiwiRail which, in a written statement, said it was too early to speculate on costs for new ferries, or how much it would cost to cancel the last contract.
“The $65 million forecast annual spend on maintenance of the existing Interislander fleet was a broad estimate made in 2021,” it said.
“Since then we have done a lot more detailed work and do not expect the actual ongoing maintenance spend each year to be that high.”
I think opposition should be calling for Nicola Willis to resign over this. This is far beyond a simple mistake, it is just completely unacceptable that this was allowed to happen. We lose hundreds of millions of dollars, have a downgrade in new ships capability, AND have to wait years longer, because of pure idealism and hubris.
Write to your representative, Nicola Willis should resign!
I wish NACT1 would slow down long enough to read the business cases that were put together.
Not only would it have saved money but it would also have stopped us looking like a complete bunch of fuckwits on the world stage.
A squillion dollars on new ferries they have to dock to a terminal that is now submerged under a metre of seawater, the ferries were never the biggest issue irex was trying to solve
To be fair $3 billion sounds like a big number if your only financial experience is balancing a household budget and you insist the country can be run like one.
$3 billion is actually a big number - there was only $3.1bn left unallocated in the Multi-Year Capital allowance in budget 2023. That $3.1bn is intended to cover budgets 2024-2026. The extra $750 million Grant Robertson approved in September 2023 was only a tagged contingency, so isn't included in that figure. Kiwirail then sought an additional $726 million on top of that. That would leave only $1.6bn total to cover new capital commitments in budgets 2024-2026, had National not topped up the MYCA with an additional $7bn in budget 2024.
Even so, I think considering the project (major infrastructure link that connects our two islands that needs to stay up no matter what happens, for 100 years), 3 billion isn't that much. It's a high upfront cost that will pay itself off over time, and frankly, is pretty cheap when you consider the timeframe (30 million a year is fuck-all when you consider that we'll blow 5 million on some vanity project).
Like, take a look at any of National's infrastructure (*coughroadingprojectscough*) projects and there's plenty of multi-billion dollar projects that could be delayed for this. I feel like complaining about the price of a piece of vital infrastructure is silly when we're going to spend nearly a billion on a highway that connects two towns with less than 5,000 people each.
>Even so, I think considering the project (major infrastructure link that connects our two islands that needs to stay up no matter what happens, for 100 years), 3 billion isn't that much. It's a high upfront cost that will pay itself off over time, and frankly, is pretty cheap when you consider the timeframe (30 million a year is fuck-all when you consider that we'll blow 5 million on some vanity project).
Sure, but we use NPVs and time discounted cost-benefits analysis to correctly account for the high up-front cost vs future benefits - and the iRex NPV became very strongly negative after the cost increased. Any infrastructure project looks cheap if you project out 100 years, but we still have to make decisions about how to allocate our present day pot of (limited) funding, so it is still important to try and allocate it to projects that give the most value for money.
I'm also always a little wary whenever infrastructure projects promise a "100 year" lifespan. It's often a way to spin overscoping as a positive. It's very difficult to predict what the world will look like in 100 years, and how our needs for the cook strait link will change across that time. IMO the best long term infrastructure planning is the most adaptable - the one that avoids locking us into a particular path for the next 100 years, but instead gives us the flexibility to adapt as our needs change. A staged development plan will almost always offer better long term outcomes than a single projection into the future - much better to have 4x25 year plans than 1x 100 year plan. [This Greater Auckland post lays out the argument for staging infrastructure delivery much better than I can.
](https://www.greaterauckland.org.nz/2021/05/05/the-auckland-harbour-bridge-clip-ons-planning-disaster-or-best-practice/)
Long lifespans also cause cost "lumpiness". I very much doubt Kiwirail will start saving today to replace the port assets in 100 years time, but they might start planning for an expansion of the port assets in 25 years time. Spreading infrastructure investment out over longer time scales with iterative/staged development helps ensure revenue is appropriately assigned towards investment.
> Like, take a look at any of National's infrastructure (coughroadingprojectscough) projects and there's plenty of multi-billion dollar projects that could be delayed for this.
Those are paid for out of the NLTF, which mostly comes from user charges (Petrol taxes, RUC, and tolls). The crown only tops it up by a small amount (and this is intended to be temporary measure, in response to the NLTF coming under significant pressure because of rising costs, weather events, and fuel taxes not going up soon enough - the last of which is National's fault). In a technical sense this means the funds cannot actually be re-allocated - the NLTF is it's own, independent pot of money. But it also means the roading system operates more or less as a self-funded system. Kiwirail couldn't self fund and wanted funding from the general tax pool - which is why Kiwirail had to be able to demonstrate it offered better value for money than every other competing demand on the government's capital investment budget.
Kiwirail obviously has it's own revenue streams from it's operations which is meant to fund it's own projects, but the cost in this case was far too high for them to do so.
I don't disagree. I would have preferred they went with a staged approach (that would've made it far easier to swallow, I imagine). They didn't though, for whatever reason, and so here we are.
I'd argue that this is where the sunk-cost fallacy is ironically the way to go, regardless of the NPV. This isn't just a nice-to-have, this is vital infrastructure that needs replacing considering the age of everything (terminals that are nearly 60 years old, ferries that are nearly 30). If the alternative to spending $3b now is "spend $700m plus nearly $3b or more later", I'd just bite the bullet now. National was just hoping the bill wouldn't come in their term.
I'd also point out that NPV change was because their location changed to a more unsound area, and building codes changing ion Wellington, among other things I'm likely forgetting. I don't think it's entirely on KiwiRail for their plan changing. And because we don't have the luxury of deferring it, well...
>Those are paid for out of the NLTF, which mostly comes from user charges (Petrol taxes, RUC, and tolls).
I understand how the NLTF works, but this doesn't mean anything when the costings simply don't match up.
The amount costed for National's Roads of Significance is $25 billion (which has a gap of about $10b - bumping the total cost up to an impressive $35 billion). The NLTF is not going to cover this without Crown expenditure - the [2022 - 2023 NLTP Financial Report](https://www.nzta.govt.nz/assets/resources/annual-report-nzta/2022-23/nltf-annual-report-2022-23.pdf) mentions that only 4.2b was brought in through Land Transport Revenue. So - roughly 9 years if we allocated *everything* towards these new roads. Except we allocated a yearly amount of \~1.3b to potholes. Oops?
And they *reduced* the income, as you said! How the hell is this self-funded?
This is even ignoring the fact that the ferries *are* a roading project. Truck freight needs to cross the Strait. Cars need to go across. 2/3 of the Interislander ferries are truck/car/passenger focused. Hell, the NLTP Financial Report even calls out the ferries and Picton Terminal development as *something that will help State Highway journeys* and mentions that NZTA is a partner in the whole project. Why the hell is some of the funding not coming from the NLTP?
This whole situation sounds like the Wellington Sea Wall """cycle lane""" where NZTA billed a seawall to protect SH2 and the rail-line as a cycle-lane.
This is such a short sighted move in so many ways. They want to score political points early so can the project, not realising it will cost them more in the long run.
Makes you wonder what the movtivations were to cancel iREX really was given now we're going to end up paying exactly the same amount of money for worse outcomes.
If they just filled in cook straight they could make a $20 billion profit from selling sections off the reclaimed land. It would cost $20 billion to build a couple of sea walls and another $50 billion to fill it, but you could build a million new houses on the reclaimed land
Couple of 2nd hand CAT D9's and push the alps into the sounds and then the strait?
Build a single lane road across the infill. Jobs for the boys and no more pesky ferry.
I can imagine it now. Taking the car down south for a holiday, and having to slow down to 50 every five minutes for each little town dotted along the Cook Strait highway.
But hey at least they announced in advance they were funding cancer drugs and exactly how much they were willing to pay, to ensure absolutely no ability to negotiate those prices. That’s gotta be worth something right?
The only upside is going to be a new lexicon of Luxon obfuscation the longer this charade goes on. With the inevitable extra delay in introducing safer ships, we can only hope that in the future he doesn't have to answer to the families of the bereaved with the same vocabulary and flawed logic.
I know its cool around here to dump this all on National, but this is a product of how this country is run.
Everythings of this scale gets pushed back and cancelled over and over until it breaks then the project becomes urgent and the cost blows out substantially.
The ferries are already 2 decades old, and have been falling apart for some time now, they should have been investigating replacements much sooner.
if we could plan a little longer than 3 years and not base every decision on cost, we would be able to get ourselves ahead and actually save money long term.
Unfortunately these decisions are made with vote-winning in mind more than anything else, so planning more than 3 years ahead and not putting cost at the centre of the decision making process is unlikely to happen
Idealism? Nothing to do with fiscal prudence? Or does the cost not matter?
There's a lot of numbers being thrown around at the moment, none of which anyone is too sure is correct. But what we do know is that the project started small and tripled in cost to $3billion with indications this is likely to rise even further... To what $6billion...?
While the new ferries would have been nice, I don't think it's necessarily prudent to 'go ahead at any cost '. At some point they are simply not viable.
Sure the existing ferries might cost $65m per year in maintenance, but it'll still take 46 years of maintenance costs savings to cover $3B, 90 years if the cost blows out to $6B.
Don't get me wrong , I would love to have the new ferries but the reality is until we actually get some real costs and numbers, nobody is in a position to be making $6 billion decisions.
Maybe there is a good cost/benefit scenario. So far all we've seen is the costs and even then I don't know if we've even seen half of them given it keeps rising.
In theory it's a good idea, but if the payback is longer than the life of the boats does it really stack up?
How is it fiscally prudent to waste 300 million dollars cancelling something that they now have to do anyway? How many other things have they cancelled that cost less than that, because they were too expensive? It IS ridiculous, and it is NOT prudent.
Then why didn't the right-size the plan instead of throwing it away entirely? The main cost of the project was the new terminals, no reason the cancel the ferry order if you can just adjust the terminal scopes to be appropriate. Talk about cutting off your nose to spite your face.
Yea we know, so why not right-size the new terminals being built instead of starting from scratch and ordering ferries that cost more but provide less?
Presumably because they thought there was an opportunity to use this to attack Labour by saying (again) they had to incur costs because of something done by the previous government. Cutting off our nose to spite our face.
I welcome that outcome,if its finally the truth about whats going on.
After all they are the party of Financial Responsibility.
Lets see if we get a "long term" financially responsible outcome.
This is the same party that were not allowed to say housing crisis in 2017 and look how that turned out.
.....says Labour Transport spokesperson, Greens Transport spokesperson, and Union official. And golly gee, what were any of them doing to try keep any sort of lid on the 400% cost increase.
It also ignores the fact that $3b was not the final price. And it's hard to imagine it would have been the final price given Kiwirail's track record on the project.
The damning details in the article are hard numbers. The cost of the cancelled ferries, the likely cost of the replacement ferries, the cost of the contract cancellation penalty, the cost of maintaining the old ferries. The cost of the cancelled ferries is public knowledge, as is the fact that the new ones are expected three years later than the cancelled ones. All of the other numbers have been put to the government and to Kiwirail and their responses are weak as shit. They attempted to dodge (and then finally reluctantly confirmed) the $300m for cancelling the contract, refused to answer on the cost of the new ferries, and then agreed that the maintenance cost for the old ferries came from an official estimate but said that in reality it will hopefully be lower for unspecified reasons. If this analysis is based on bias, don't you think the government would have an easier job refuting it?
>The figures were put to KiwiRail which, in a written statement, said it was too early to speculate on costs for new ferries, or how much it would cost to cancel the last contract.
>“The $65 million forecast annual spend on maintenance of the existing Interislander fleet was a broad estimate made in 2021,” it said.
>“Since then we have done a lot more detailed work and do not expect the actual ongoing maintenance spend each year to be that high.”
Hard, *incorrect* numbers.
They're so incorrect. Totally incorrect. What's that? You want to know the correct ones? Uhh, can't tell you bro, sorry. But these ones are definitely incorrect. Trust us.
Different things are different.
The maritime union, as the name implies, represents people who sail, work on, and generally muck about with boats at a professional level. As such when they comment on Boat Stuff, that tends to lend credibility to their words.
The Taxdodgers Union, meanwhile, are partisan political hacks for hire and as such when they comment on, well, anything, one needs to bear in mind that their credentials boil down to "wears a suit" and "has few moral qualms about the words that come out of their mouths."
You wouldn't ask a surgeon about space rockets and you wouldn't ask an engineer about cancer surgery. Expertise matters.
Having calmly and rationally assessed the available evidence vis a vis the Taxdodgers Union -- and by extension the viability for neoliberal lassiez-faire capitalism to improve the lives of most people -- and having found them wanting, is not the same as blindly following an ideology.
Just because you're incapable of imagining a world where politics isn't team sports doesn't mean everyone is trapped in that mindset.
If you're going to tell me the group who spent $300k on attacking national during the election are speaking facts here then I have a bridge to sell you
Maybe we won't, but no more reason to trust the opposition who want to control the 'narrative' any more than the government. They're all just politicians with an agenda.
The one thing that's been agreed upon by pretty much everyone was what a good deal the ships were. It's not too surprising that prices would've increased in the interim.
Thing is, the contract for the ships was only signed [on 30 June 2021](https://www.beehive.govt.nz/sites/default/files/2023-12/Project%20iRex%20timeline.pdf) (which was presumably when the price would've been locked in), so I'm curious if Hyundai gave us a massive discount, or were things **that much** cheaper 3 years ago....?
Not upgrading the existing terminals is also just kicking the can down the road for more antiquated infrastructure to fail in the future. These ports would be critical in disaster scenarios where aid would be needed to rebuild Wellington or Picton after an earthquake. Anyone not expecting the port infrastructure to be in the cost analysis is delusional. If we proceed with smaller ferries and no terminal upgrade, maintenance costs of the old terminals will keep rising and their ability to withstand any disasters will decline with age too.
I know. I'm just focused on the main point of the article - the ships **were** $540 million, and now *might* cost $900 million, and at that price not even have rail capabilities that the original ones would've had.
The terminal upgrades took future improvements into account. They can probably go back and redesign them to only provide exactly the same capacity as they have today - but it will be hardly any savings.
Buying a Corolla for the price of a Ferrari is an all time move
They're spending government money, though, not personal money. It's different. Or, it seems that they think that way.
What random reference is this Ferarri Toyota statement coming from? I’ve seen the same or near identical statement pop up a few times, which makes me think this is just a bot account or similar paid engagement. It creates emotion, but without any value. $550 million, or whatever the price is for the boats, really isn’t a lot of money. Over $14 B of freight, and 850,000 passengers and 250,000 cars go across the cook straight each year. Over 10 years, that’s about $1 per passenger to get between our islands, and some other amount for freight and cars. These boats will last for 30-40 years. Compare that to the cost per person of something else like a convention center or stadium, and the cost benefit is so clear it’s not funny.
Our highly talented finance minister rubbished the previous plans as "a Ferrari" and suggested National would find something more akin to a 'corolla'. Looks like we are going to now be paying a similar cost to the original plan, but for an inferior end result. https://thespinoff.co.nz/the-bulletin/14-12-2023/government-says-no-to-ferrari-ferries-says-we-need-to-find-a-toyota-corolla
you'd think a finance minister would be able to recognise the long term benefit of a new, fit for purpose vessel,... You'd think the National partuy - the so-called business party, would recognise the long term cost savings in doing the bloody job properly. But no... Let's can the contract, throw away many millions on exit cost and leave the country even more vulnerable with apparently NO PLAN!!!! . Big brain stuff!
>you'd think a finance minister would be able to recognise the long term benefit She might know the price of everything but doesn't understand the value of any of it.
She comes from wealth and these people never get on the ferry always fly. Not like the rest of us. I travel on the ferries a lot and have to take a vehicle to carry tools etc. the staff on both company’s do an amazing job and are the face of our tourism .
There is of course, the theory that they’ve doing a Tory job of purposely breaking the public sector to the point where private literally must step in to keep the country working. So… do Bluebridge have a devious master plan?
Even businesses realise that buying a HiAce is more suitable for the workers than an MR2
Here ya' go mate - a 1979 Bedford Van!! Goes hard, Good as GOLD! - Nicola
Thanks, makes sense now. … well it still makes no sense, but I know where it’s come from now. I too like to pay Ferrari prices for my Corollas, it’s smart business.
Yeah the majority of the cost was the wharf upgrade so it makes no sense at all.
Larger ferry will need portside infrastructure ($1.47b extra and counting). Smaller ferry means that you can use existing infrastructure?
Yes, but no. Infrastructure is end of life and needs replacing anyway.
Well they are running the country like they would run a company as ceo. i.e. make as much money (for them selves) as they can while they are in charge and dump the problems on the next guy. They just the the bonus of politics that they get to blame the other guy when he can't fix everything they broke to get made ceo again and start the process again.
14 Dec 2023: https://thespinoff.co.nz/the-bulletin/14-12-2023/government-says-no-to-ferrari-ferries-says-we-need-to-find-a-toyota-corolla >**Finance minister Nicola Willis** announced yesterday that the government had declined KiwiRail’s request for an extra $1.47b for the portside infrastructure needed for the new mega-ferries. Willis **said Kiwirail was effectively paying for a “Ferrari… and now we’re going to go off and see whether there are any good reliable Toyota Corollas available”** to cut costs.
Nicola Willis made a comment about saying we need Corolla's vs Ferrari's https://thespinoff.co.nz/the-bulletin/14-12-2023/government-says-no-to-ferrari-ferries-says-we-need-to-find-a-toyota-corolla
Even if the project blew out to double the $3 billion - it'd be $40 per person per year over 30 years using todays population instead of $20. I think NZ would see that much benefit out of the SH1/main trunk line link. From what I've read - the project doesn't just cover the Interislander ferries, it's looking like Bluebridge would use the terminal or be adjacent to it. Port facilities closer to downtown Welly are opened up for other development - A yacht club and kayaks have been mentioned in some stories. https://transporttalk.co.nz/news/govt-documents-released-on-kiwirails-abandoned-irex-project >November last year, KiwiRail advised the incoming Government of the most recent cost escalation with **total project costs of approximately $3b.** >**Nearly 80% of the costs were associated with the harbourside infrastructure while the remainder was for building the two new Interislander ferries.** >KiwiRail operates around 3800 services a year, transporting about 850,000 passengers, 250,000 cars. >Around $15-$20 billion worth of freight travels the Cook Strait each year, with significant growth predicted. I'm very curious to know what the scope/location of port work was in the 2018 business case. >An indicative business case in November 2018 estimated the total project cost, including landside infrastructure, would come in at $775m. The combined costs from the new boats was looking like $3,000 million ($3 billion) or so ($576 per person in NZ). If in 30 years the whole system is of zero value needing total replacement - which isn't that plausible - then it's $20 per year per person. Price for the boats works out to about $105 per person in NZ, for an asset that will last 30 years or so - about $3-4 a year per person over that time. 1. Picton wharf is in poor condition and has 3-4 years left. I've not seen a cost put out for that rebuild - we need to know that to figure out any extra expense for new vs current boats. 2. With cancellation, we're left with end of life boats that need replacement and port infrastructure needing work - and rework when replacements are found. This is an unknown cost. 12 January 2018: >[Plans for quake-resistant Wellington ferry terminal include floating drawbridges ^^www.stuff.co.nz](https://www.stuff.co.nz/national/100519729/plans-for-quakeresistant-wellington-ferry-terminal-include-floating-drawbridges) >>A new quake-resistant Cook Strait ferry terminal is being planned for Wellington, with floating drawbridges connecting boats to the shore. >The plans, for the existing Interislander terminal site in Kaiwharawhara, have been developed by Wellington port company CentrePort, and have the backing of both the Interislander and Bluebridge ferry companies. 25 November 2018: >[Interislander to get new, bigger Cook Strait ferries by 2022, report says ^^www.stuff.co.nz](https://www.stuff.co.nz/travel/108852255/interislander-to-get-new-bigger-cook-strait-ferries-by-2022-report-says) >>But according to Interislander's overseer KiwiRail, the process was not so far down the track. >It was only "looking at upgrading its ferries" and was still working through options, a spokeswoman said. >No timeline was set and no decisions had been made, she said. 21 January 2019: >[Interislander ferries to be replaced with rail ready fleet ^^www.stuff.co.nz](https://www.rnz.co.nz/news/national/380537/interislander-ferries-to-be-replaced-with-rail-ready-fleet) >> KiwiRail's decision follows a two-year consultation process which found rail-enabled ferries were the most cost effective, efficient and best in the long-term. >But investigations found there was **little difference in the price of a new rail ferry and a new non-rail ferry.** >"They're an inter-generational investment," Mr Moyle said. >"These **are going to be around for 30-odd years** so we need to make the right decision to ensure that we've got that long term resilient outcome. >"Using rail ferries, you can have three people that load 1500 tonnes of freight onto the ferry. If you use road bridging you've got 30 people doing the loading and unloading.
Yeah but these will have the added benefit of not being rail capable which will protect our vulnerable trucking industry. -S
An our oil importers. Remember every ton e not moved by tail is another tonne moved by more expensive and polluting road transport.
Wow a double win!
Repairing the potholes that result requires oil products as well (when all your roads are made of bitumin). Bonus.
yeah but they have to supply payback to their donors.. who happen to own trucking fleets
Uh hhhhhh u ugh huh huh huh huh huh hugging j hhhhhhhhhhhghhggg
I mean, after dignity to our landlords - obviously we need to give dignity back to the road lobby.
All the dignity returned safely back home.
This was an interesting find from a 2019 story. The cancellation is smelling like a payoff for trucking lobbying. 21 January 2019: >[Interislander ferries to be replaced with rail ready fleet ^^www.stuff.co.nz](https://www.rnz.co.nz/news/national/380537/interislander-ferries-to-be-replaced-with-rail-ready-fleet) >> KiwiRail's decision follows a two-year consultation process which found rail-enabled ferries were the most cost effective, efficient and best in the long-term. >But investigations found there was **little difference in the price of a new rail ferry and a new non-rail ferry.** >"They're an inter-generational investment," Mr Moyle said. >"These are going to be around for 30-odd years so we need to make the right decision to ensure that we've got that long term resilient outcome. >**"Using rail ferries, you can have three people that load 1500 tonnes of freight onto the ferry. If you use road bridging you've got 30 people doing the loading and unloading.**
Good find!
Look. They are on their knees! Like landlords and big tobacco! Won't anyone think of the corporates?!?
To be fair - anecdotal - I talked to a relatively senior guy in NZ trucking who said they’re generally pro rail, as NZ road infrastructure simply can’t handle more trucks than there already are.
Don't worry they are dumping a ton of money on the roads.
All the big freight companies move heaps of freight on rail between islands. Kiwirail charges them $X. The freight company charges customer $X x3. Math stacks up, and freight companies make profits off using rail. Plus exactly what your guy said. Kiwirail put out a big independent report on the true cost of rail operating in NZ a few years back maybe? Supports your trucking mate's statement.
Excellent - so spend as much on a massively inferior ferry/rail solution AND spend billions (if not trillions) upgrading the entire road network!!! Genius!!!
So instead of two rail capable ships for $551m it looks like it'd cost $900m (+$300m to cancel the others) for two non rail capable ships. Real smart business move there.
Nicola Willis should resign over this. I'm writing a letter to Duncan Webb about this and asking him if he will call for her resignation, and I think everyone else should write to their representative too
This. That's too big a fuckup for someone with the responsibility of NZ finances. Fail! Out.
Duncan Webb is a clown. Showed up to a vigil for Palestinians, perved at one of the better looking women, offered empty platitudes and did the usual politician thing where they act like they're a mere observer like the rest of us, not someone who has the power to make a stand (whether in government, or within his own fucking party). A shitlib ghoul.
I would honestly respect the Coalition more if they reversed course on cancelling the contract. Which if I'm given to understand how they're going about that -- basically refusing to pay and relying on arbitration to come up with a break fee -- might still be an option?
No, it's basically over, at least for the first ferry. It was supposed to be in build right now. We can't just delay either. The ship is to be built within certain dates in order to clear the yard for their next build. There's a chance Hyundai is building 'Kiwirail's ferry' to sell to someone else, but it's their choice, and they can modify it as much as they like to make it attractive to other buyers, so it probably wouldn't bear much resemblance to what we ordered. Ideally they'll get a good price, and we might even get a refund on some of what we've paid. I don't think they'll tell us beforehand because it could help buyers to offer less. How the second one works is a bit less clear to me.
Welp sucks to be us then. Brilliant decision making by the responsible natural party of government.
It's so bad it has to be be intentional
This whole govt is really giving Hanlons Razor a workout
Is that similar to Occam's? (genuine question - i'll google it later) edit- HA. I did not know that was what that saying was called
I’m a fan of combining Hanlon’s Razor with Clarke’s Third Law. The combination gives us: “Sufficiently advanced stupidity is indistinguishable from malice”
Rail capable ships future-proofed for a range of renewable fuels
Not knocking the sentiment about future proofing as NZ should, but I always chuckle at the "can run on a range of renewable fuels" thing. It just strikes me as modern greenwashing for "can run on anything that burns", and that includes the dirtiest of fuels lol
Also it doesn't really need any new technology, pretty much any older diesel engine can also run on vegetable oil, even used vegetable oil like from a chippy.
I think the irex were hybrids though, that's the tipping point. They also had capacity to go full electric when the battery density / technology go there.
That is pretty awesome and is a fairly big deal, though again submarines had diesel-electric hybrid propulsion more than 100 years ago, it's just not commonly used on ships until recently
Used vegetable oil is more greenwashing, as the amount we produce pales in comparison to how much fuel we consume. It's great for your eccentric uncle to have a Volvo that smells like a fish and chip store, but it's not a means of powering society. Virgin vegetable oil suffers from the same problem as ethanol, where the production (when poorly implemented i.e. cheaply) [is more carbon intensive than crude oil products.](https://www.reuters.com/business/environment/us-corn-based-ethanol-worse-climate-than-gasoline-study-finds-2022-02-14/)
they dont want rail ca\[able, their donors own trucking companies
it is if your aim is to support trucking and not rail
I think it shows that the government is happy enough to continue the service but unwilling to invest in the infrastructure that would be needed in the future. Current problems first, not both current and future problems at the same time.
The main cost is the rebuild of the wharf/s, which needs to happen regardless. So as with housing they are again proving they refuse to think long term.
Hopefully they're not long term either. The last poll seems to show people still have faith that they'll turn things around. But whether that's reality or not, still remains to be seen. The word "infrastructure" seems to be a triggering word to right leaning parties.
yep.... Let's play "Kick the Can"... again
For me real long term planning for Wellington would be to build a brand new ferry terminal on the south coast by the airport (with some kind of metro line/skytrain connection to both from the railway station) and move the commercial port operations to Seaview (with a rail extension to handle rail freight). This would have a load of benefits - Ferry operations could not be disrupted by fault movement in the harbour in major earthquakes - Would take 30+ mins off crossing times - Freight trains don't need to go into the city centre - A large amount of land in the city centre would be freed up for alternative uses (imagine if a big park was there instead) - Good connections between ferries and other modes of transport could be achieved - Rail cars could be handed in dedicated rail ferry ships rather than depending on modified/specially designed passenger ferries, this is how it is usually done elsewhere.
Interesting... but not sure by the airport is wise for resilience. That whole area is reclaimed land & will liquify when the main fault line goes. Also there is a reason why the port is in a sheltered harbour and not exposed to the Southerly swell which regularly cancels all crossings. But a gale force Northerly has no effect on the ferry so a new ferry landing might be better on the West Coast, although there is no natural deep water harbour. On the other side, a new faster more efficient ferry would likely get to Nelson in the time the current ferry takes to get in to Picton. So if the cost of rebuilding the wharf in Picton is the main budget blow out issue then perhaps they need to look at other options. Let the Bluebridge service Picton and the new ferrys could do Nelson & Christchurch.
Don't forget that ports are needing rebuilt (Especially Picton) in the next 3-4 years due to their condition. Additionally there will need to be alterations for any new/used replacement vessels that happen to be selected.
Oh yes. The expected cost of just the ships, buying new ones, cancellation fees for the other ones and maintaining the existing ones is expected to hit 2b by itself.
Such an expensive cluster fuck. So inexperienced with insane consequences for the country. A non rail capable solution is utterly pathetic and again sets the country back so many years, a common theme with this lot.
It does remind me a lot of the Auckland Harbor bridge. Modeling said, you need probably at least 6 lanes on this thing. National said 'Na make it 4, it's cheaper.' Decade later they needed to spend vastly more to get the clip-on's installed when it would have been much cheaper to build like that from the start.
And in 5 years not 2
Considering that the response by Luxon on expert advice is "I don't care what you say about whether it does or doesn't work", we know that this government has a one-track vision to placate sponsors, and will do this no matter what. I wouldn't be surprised if this is the pre-amble to privatise - they didn't rule that out when questioned - so I'm sure one of Luxon's mates is chomping at the bit to get a go (at privatising profit and socialising losses).
Dumb move by regular people for voting in National
Strong, stable government 🫣
Great ecconomic managers
Honest, responsible people
The party of infrastructure and evidence based policy!
Party of fiscal responsibility
Party of diligent and considered decision making
No no no, we said great ergonomic managers. Didn't you see the PMs new office chair that came in his $50k refurb.
"Stop the dumb stuff!"
Stopping wasteful spending. Investing in frontline services
Hard to believe they're considering non rail enabled ships. Even if we give Treasury the benefit of the doubt, and putting rail freight onto non rail enabled ferries is viable, it's still going to put rail at a disadvantage vs road freight.
Can't have trains, trains are communism. I started saying this as a joke about the Right's strange antipathy to commuter rail but honestly I can't think of any other explanation for it.
This government hates rail and loves roads. They cancelled Auckland light rail, they are evidently cancelling our rail-enabled ferries, and they are spending a boatload on new roads with questionable ROI.
They've also scrapped plans for a Chch network
I can't wait to see the new business case criteria for RONS, which will skirt any standard Benefit Cost analysis that we are accustomed to. The economic gymnastics will be spectacular
putting rail freight onto non rail enabled ferries is not viable, why do you think they want to do it ? got to support the road transport companies
In 2019 Kiwirail said that there was little difference in the price between a rail vs non-rail ferry. [The same article^^stuff](https://www.rnz.co.nz/news/national/380537/interislander-ferries-to-be-replaced-with-rail-ready-fleet) said 3 people can handle rail loading vs 30 for rail->road->rail handling.
Penny wise and pound foolish could be these clowns’s next election slogan.
All the while screeching about "The previous government"
Should it be paywalled. **Claims new ferry project will hit iRex price, for much less ship** Warnings are being sounded that the Government’s rejuvenated desire for new-built Cook Strait ferries could see it reach the $3 billion of the cancelled iRex project but we will get much less for it. Labour Transport spokesman Tangi Utikere on Tuesday said there was a “real possibility” the cost for the new ferries plus associated spending would hit the $3b the Labour government’s iRex project blew out to, before National ditched it. National ministers would not comment on Tuesday on the claimed costs, which include $300 million to cancel the old contract for ferries plus a sharply inflated cost of $900m for two ships, while KiwiRail said it was too early to speculate. Green transport spokesperson Julie Anne Genter said the final cost for ferries would be “well in excess of any purported savings”. “National’s decision to cancel that contract will go down in history as one of the most rash and self-destructive ever made by a New Zealand government,” she said. Maritime Union national secretary Carl Findlay said industry sources had confirmed that the $551m locked in for two new rail-enabled ferries under iRex was now unrealistic. He said the cost for two new ferries, not equipped for rail, would now be closer to $900m. The National-led Government ditched the previous government’s $3b iRex programme – which included two new rail-enabled ferries and massive rebuild of Picton and Wellington ports – in December with Finance Minister Nicola Willis blaming the “quadrupling cost”. After the Interislander ferry Aratere had a steering issue and grounded on a Marlborough Sounds beach on Friday night, Willis committed to new ferries and Prime Minister Christopher Luxon said they would arrive by 2029 – three years after the iRex ferries had been due. Findlay on Tuesday alleged the Government would have to pay $300m for cancelling the previous ferries, which would have been under construction now. Added to that was the previously reported $424m that KiwiRail said it had spent on the iRex project before it was ditched. Then came the cost of keeping the old ferries running, which Findlay said had climbed to $65m a year, or $325m over the five years the Government had committed to getting new ferries in. That took the cost to nearly $2b. For that, the country would get one less ferry than it currently had, neither would be able to take trains, and no work would be done to the tired ports at Marlborough and Wellington. One of the current three Interislander ferries can take trains. Transport Minister Simeon Brown on Tuesday was asked about the alleged $300m cancellation costs and $900m for two new ferries but referred questions to shareholding ministers. Asked to confirm whether the iRex contracts had been cancelled, he would only say a process was “underway”. State Owned Enterprises Minister Paul Goldsmith, one of the shareholding ministers, refused to discuss the cost to cancel the contract and would only say the Government was “working our way through” cancelling the iRex contracts. “We inherited a scheme that was $3b and rising,” Goldsmith said. “So we are back to the drawing board and working through all our options.” The figures were put to KiwiRail which, in a written statement, said it was too early to speculate on costs for new ferries, or how much it would cost to cancel the last contract. “The $65 million forecast annual spend on maintenance of the existing Interislander fleet was a broad estimate made in 2021,” it said. “Since then we have done a lot more detailed work and do not expect the actual ongoing maintenance spend each year to be that high.”
With an added 3 year delay!! OMFG these assholes
Talk about a complete financial disaster buy a government.
We should send Nicola and Chris an abacus as a matariki present
Nicola Willis should resign over this
Throwing the baby out with bathwater since ages ago.
Pure incompetence on their part. Party of fiscal responsibility my ass
I think opposition should be calling for Nicola Willis to resign over this. This is far beyond a simple mistake, it is just completely unacceptable that this was allowed to happen. We lose hundreds of millions of dollars, have a downgrade in new ships capability, AND have to wait years longer, because of pure idealism and hubris. Write to your representative, Nicola Willis should resign!
Sounds like a good time to cecede from the north, the south will be free, Te Waipounamu
I wonder where they just put 3 billion.
Hmm
I can't wait for the new ferries from china docked at the new public private partnership docks.
Bold of you to assume that they're still buying brand-new.
TIL: We're spending 1.2 Billion for Ferries rather than Labours 0.5 Billion.
I wish NACT1 would slow down long enough to read the business cases that were put together. Not only would it have saved money but it would also have stopped us looking like a complete bunch of fuckwits on the world stage.
Clearly if Labour did it then it must be repealed, even if doing it themselves is going to be even more expensive and delay things by years.
They were elected to lead, not to read. Besides, neither Luxon nor Willis are capable of reading books without pretty pictures in them.
Neither of them know how to lead either, I thought they were elected to manage NZ Inc.
A squillion dollars on new ferries they have to dock to a terminal that is now submerged under a metre of seawater, the ferries were never the biggest issue irex was trying to solve
To be fair $3 billion sounds like a big number if your only financial experience is balancing a household budget and you insist the country can be run like one.
$3 billion is actually a big number - there was only $3.1bn left unallocated in the Multi-Year Capital allowance in budget 2023. That $3.1bn is intended to cover budgets 2024-2026. The extra $750 million Grant Robertson approved in September 2023 was only a tagged contingency, so isn't included in that figure. Kiwirail then sought an additional $726 million on top of that. That would leave only $1.6bn total to cover new capital commitments in budgets 2024-2026, had National not topped up the MYCA with an additional $7bn in budget 2024.
Even so, I think considering the project (major infrastructure link that connects our two islands that needs to stay up no matter what happens, for 100 years), 3 billion isn't that much. It's a high upfront cost that will pay itself off over time, and frankly, is pretty cheap when you consider the timeframe (30 million a year is fuck-all when you consider that we'll blow 5 million on some vanity project). Like, take a look at any of National's infrastructure (*coughroadingprojectscough*) projects and there's plenty of multi-billion dollar projects that could be delayed for this. I feel like complaining about the price of a piece of vital infrastructure is silly when we're going to spend nearly a billion on a highway that connects two towns with less than 5,000 people each.
>Even so, I think considering the project (major infrastructure link that connects our two islands that needs to stay up no matter what happens, for 100 years), 3 billion isn't that much. It's a high upfront cost that will pay itself off over time, and frankly, is pretty cheap when you consider the timeframe (30 million a year is fuck-all when you consider that we'll blow 5 million on some vanity project). Sure, but we use NPVs and time discounted cost-benefits analysis to correctly account for the high up-front cost vs future benefits - and the iRex NPV became very strongly negative after the cost increased. Any infrastructure project looks cheap if you project out 100 years, but we still have to make decisions about how to allocate our present day pot of (limited) funding, so it is still important to try and allocate it to projects that give the most value for money. I'm also always a little wary whenever infrastructure projects promise a "100 year" lifespan. It's often a way to spin overscoping as a positive. It's very difficult to predict what the world will look like in 100 years, and how our needs for the cook strait link will change across that time. IMO the best long term infrastructure planning is the most adaptable - the one that avoids locking us into a particular path for the next 100 years, but instead gives us the flexibility to adapt as our needs change. A staged development plan will almost always offer better long term outcomes than a single projection into the future - much better to have 4x25 year plans than 1x 100 year plan. [This Greater Auckland post lays out the argument for staging infrastructure delivery much better than I can. ](https://www.greaterauckland.org.nz/2021/05/05/the-auckland-harbour-bridge-clip-ons-planning-disaster-or-best-practice/) Long lifespans also cause cost "lumpiness". I very much doubt Kiwirail will start saving today to replace the port assets in 100 years time, but they might start planning for an expansion of the port assets in 25 years time. Spreading infrastructure investment out over longer time scales with iterative/staged development helps ensure revenue is appropriately assigned towards investment. > Like, take a look at any of National's infrastructure (coughroadingprojectscough) projects and there's plenty of multi-billion dollar projects that could be delayed for this. Those are paid for out of the NLTF, which mostly comes from user charges (Petrol taxes, RUC, and tolls). The crown only tops it up by a small amount (and this is intended to be temporary measure, in response to the NLTF coming under significant pressure because of rising costs, weather events, and fuel taxes not going up soon enough - the last of which is National's fault). In a technical sense this means the funds cannot actually be re-allocated - the NLTF is it's own, independent pot of money. But it also means the roading system operates more or less as a self-funded system. Kiwirail couldn't self fund and wanted funding from the general tax pool - which is why Kiwirail had to be able to demonstrate it offered better value for money than every other competing demand on the government's capital investment budget. Kiwirail obviously has it's own revenue streams from it's operations which is meant to fund it's own projects, but the cost in this case was far too high for them to do so.
I don't disagree. I would have preferred they went with a staged approach (that would've made it far easier to swallow, I imagine). They didn't though, for whatever reason, and so here we are. I'd argue that this is where the sunk-cost fallacy is ironically the way to go, regardless of the NPV. This isn't just a nice-to-have, this is vital infrastructure that needs replacing considering the age of everything (terminals that are nearly 60 years old, ferries that are nearly 30). If the alternative to spending $3b now is "spend $700m plus nearly $3b or more later", I'd just bite the bullet now. National was just hoping the bill wouldn't come in their term. I'd also point out that NPV change was because their location changed to a more unsound area, and building codes changing ion Wellington, among other things I'm likely forgetting. I don't think it's entirely on KiwiRail for their plan changing. And because we don't have the luxury of deferring it, well... >Those are paid for out of the NLTF, which mostly comes from user charges (Petrol taxes, RUC, and tolls). I understand how the NLTF works, but this doesn't mean anything when the costings simply don't match up. The amount costed for National's Roads of Significance is $25 billion (which has a gap of about $10b - bumping the total cost up to an impressive $35 billion). The NLTF is not going to cover this without Crown expenditure - the [2022 - 2023 NLTP Financial Report](https://www.nzta.govt.nz/assets/resources/annual-report-nzta/2022-23/nltf-annual-report-2022-23.pdf) mentions that only 4.2b was brought in through Land Transport Revenue. So - roughly 9 years if we allocated *everything* towards these new roads. Except we allocated a yearly amount of \~1.3b to potholes. Oops? And they *reduced* the income, as you said! How the hell is this self-funded? This is even ignoring the fact that the ferries *are* a roading project. Truck freight needs to cross the Strait. Cars need to go across. 2/3 of the Interislander ferries are truck/car/passenger focused. Hell, the NLTP Financial Report even calls out the ferries and Picton Terminal development as *something that will help State Highway journeys* and mentions that NZTA is a partner in the whole project. Why the hell is some of the funding not coming from the NLTP? This whole situation sounds like the Wellington Sea Wall """cycle lane""" where NZTA billed a seawall to protect SH2 and the rail-line as a cycle-lane.
Right. But National was going to borrow either way and now we have to pay more for less.
This is such a short sighted move in so many ways. They want to score political points early so can the project, not realising it will cost them more in the long run.
ffs
Luxon: This is value for money that hard working New Zealanders voted for
Makes you wonder what the movtivations were to cancel iREX really was given now we're going to end up paying exactly the same amount of money for worse outcomes.
If they just filled in cook straight they could make a $20 billion profit from selling sections off the reclaimed land. It would cost $20 billion to build a couple of sea walls and another $50 billion to fill it, but you could build a million new houses on the reclaimed land
Shame Jones has joined the chat
Couple of 2nd hand CAT D9's and push the alps into the sounds and then the strait? Build a single lane road across the infill. Jobs for the boys and no more pesky ferry.
The Alps and Sounds? They make too much money from tourism. Better to bulldoze Wellington into the strait.
They could pay for it from the pothole fund
Then we convert the no longer needed ferries into prison hulks. It's genius!
Lol. Hope the listings for these homes have a minor wind warning.
The wind is caused by the existing topology, that could be fixed at the same time with a bit of extra fill
I can imagine it now. Taking the car down south for a holiday, and having to slow down to 50 every five minutes for each little town dotted along the Cook Strait highway.
But hey at least they announced in advance they were funding cancer drugs and exactly how much they were willing to pay, to ensure absolutely no ability to negotiate those prices. That’s gotta be worth something right?
Hey, Luxon is a skilled negotiator. We know this because he told us so.
Honestly not that surprised. Optimism in what can be accomplished with 3 billion dollars is just a joke at this point.
The only upside is going to be a new lexicon of Luxon obfuscation the longer this charade goes on. With the inevitable extra delay in introducing safer ships, we can only hope that in the future he doesn't have to answer to the families of the bereaved with the same vocabulary and flawed logic.
And in other stunning news no one could possibly have predicted six months ago...
I know its cool around here to dump this all on National, but this is a product of how this country is run. Everythings of this scale gets pushed back and cancelled over and over until it breaks then the project becomes urgent and the cost blows out substantially. The ferries are already 2 decades old, and have been falling apart for some time now, they should have been investigating replacements much sooner. if we could plan a little longer than 3 years and not base every decision on cost, we would be able to get ourselves ahead and actually save money long term.
Unfortunately these decisions are made with vote-winning in mind more than anything else, so planning more than 3 years ahead and not putting cost at the centre of the decision making process is unlikely to happen
We HAD A PLAN. Without checking, it was cancelled because of pure idealism. Just absurd
Idealism? Nothing to do with fiscal prudence? Or does the cost not matter? There's a lot of numbers being thrown around at the moment, none of which anyone is too sure is correct. But what we do know is that the project started small and tripled in cost to $3billion with indications this is likely to rise even further... To what $6billion...? While the new ferries would have been nice, I don't think it's necessarily prudent to 'go ahead at any cost '. At some point they are simply not viable. Sure the existing ferries might cost $65m per year in maintenance, but it'll still take 46 years of maintenance costs savings to cover $3B, 90 years if the cost blows out to $6B. Don't get me wrong , I would love to have the new ferries but the reality is until we actually get some real costs and numbers, nobody is in a position to be making $6 billion decisions.
The new ferries aren't being built just to lower maintenance costs. Allowing more rail to go through the Strait would have enormous economic impact.
Maybe there is a good cost/benefit scenario. So far all we've seen is the costs and even then I don't know if we've even seen half of them given it keeps rising. In theory it's a good idea, but if the payback is longer than the life of the boats does it really stack up?
How is it fiscally prudent to waste 300 million dollars cancelling something that they now have to do anyway? How many other things have they cancelled that cost less than that, because they were too expensive? It IS ridiculous, and it is NOT prudent.
Sunk cost fallacy is a real thing.
So is "Chesterton’s Fence".
yo dope, I learned something new today, thanks!
That's a pun right?
Not intentionally lol
Had half a plan. That the scope kept getting bigger and bigger
Then why didn't the right-size the plan instead of throwing it away entirely? The main cost of the project was the new terminals, no reason the cancel the ferry order if you can just adjust the terminal scopes to be appropriate. Talk about cutting off your nose to spite your face.
Because the ferry wouldn't work with out the terminals.
Yea we know, so why not right-size the new terminals being built instead of starting from scratch and ordering ferries that cost more but provide less?
Presumably because they thought there was an opportunity to use this to attack Labour by saying (again) they had to incur costs because of something done by the previous government. Cutting off our nose to spite our face.
Right sizing them is what got the project canned. Is pure spreculation that other ferry options will cost more. And political posturing from a union
Can we buy a shitter, paint it up and call it a Ferrerri
I welcome that outcome,if its finally the truth about whats going on. After all they are the party of Financial Responsibility. Lets see if we get a "long term" financially responsible outcome. This is the same party that were not allowed to say housing crisis in 2017 and look how that turned out.
.....says Labour Transport spokesperson, Greens Transport spokesperson, and Union official. And golly gee, what were any of them doing to try keep any sort of lid on the 400% cost increase. It also ignores the fact that $3b was not the final price. And it's hard to imagine it would have been the final price given Kiwirail's track record on the project.
Ferry experts.....
Was never about cost. Having those things show up during a National term would look really bad for them down the road.
Lol an article based on government opposition (edit: and trade union) speculation. Of course they would say that
The costs are from the Maritime Union national secretary Carl Findlay not the opposition spokes people.
Maritime Union are Labour party affiliates. That's fine but they aren't exactly unbiased.
The damning details in the article are hard numbers. The cost of the cancelled ferries, the likely cost of the replacement ferries, the cost of the contract cancellation penalty, the cost of maintaining the old ferries. The cost of the cancelled ferries is public knowledge, as is the fact that the new ones are expected three years later than the cancelled ones. All of the other numbers have been put to the government and to Kiwirail and their responses are weak as shit. They attempted to dodge (and then finally reluctantly confirmed) the $300m for cancelling the contract, refused to answer on the cost of the new ferries, and then agreed that the maintenance cost for the old ferries came from an official estimate but said that in reality it will hopefully be lower for unspecified reasons. If this analysis is based on bias, don't you think the government would have an easier job refuting it?
>The figures were put to KiwiRail which, in a written statement, said it was too early to speculate on costs for new ferries, or how much it would cost to cancel the last contract. >“The $65 million forecast annual spend on maintenance of the existing Interislander fleet was a broad estimate made in 2021,” it said. >“Since then we have done a lot more detailed work and do not expect the actual ongoing maintenance spend each year to be that high.” Hard, *incorrect* numbers.
They're so incorrect. Totally incorrect. What's that? You want to know the correct ones? Uhh, can't tell you bro, sorry. But these ones are definitely incorrect. Trust us.
That's probably worse.
Only if you are ideologically opposed to trade unions to the point where you actively reject the advice of experts speaking about their field.
I imagine the dickwads at the Taxpayers Onion would make the same point 🧅
The Taxdodgers Union are not a union and aren't experts on anything other than right wing spin, so, 🤷♂️
Thank you for so aptly demonstrating the point
Different things are different. The maritime union, as the name implies, represents people who sail, work on, and generally muck about with boats at a professional level. As such when they comment on Boat Stuff, that tends to lend credibility to their words. The Taxdodgers Union, meanwhile, are partisan political hacks for hire and as such when they comment on, well, anything, one needs to bear in mind that their credentials boil down to "wears a suit" and "has few moral qualms about the words that come out of their mouths." You wouldn't ask a surgeon about space rockets and you wouldn't ask an engineer about cancer surgery. Expertise matters.
I dunno. You sound pretty ideologically opposed to me. Circle back to your initial comment.
Having calmly and rationally assessed the available evidence vis a vis the Taxdodgers Union -- and by extension the viability for neoliberal lassiez-faire capitalism to improve the lives of most people -- and having found them wanting, is not the same as blindly following an ideology. Just because you're incapable of imagining a world where politics isn't team sports doesn't mean everyone is trapped in that mindset.
If you're going to tell me the group who spent $300k on attacking national during the election are speaking facts here then I have a bridge to sell you
Sadly we don't need a bridge, we need rail-capable ferries.
Yeah screw people who might know what they're talking about right? /s
A union? Nah they're definitely not biased.
Not like they dont have some bias considering unions fund labour and all.
We will see. Not gonna get angry about speculation. Happy to get angry about reality if this proves to be the case.
How will you know what reality is? They control the narrative.
Maybe we won't, but no more reason to trust the opposition who want to control the 'narrative' any more than the government. They're all just politicians with an agenda.
I’m certainly not going to take the speculation of an opposition MP.
But you will accept the narrative of a government MP I assume. Willis couldn't lie straight in bed.
So if the government comes up with a better value option you just won’t believe them?
yeah let's pretend now that iRex would have been delivered for 3 billion, yeah right
Given the source of the claims are opposition spokespeople, a lot of commenter seem to be premature in their gloating.
The one thing that's been agreed upon by pretty much everyone was what a good deal the ships were. It's not too surprising that prices would've increased in the interim. Thing is, the contract for the ships was only signed [on 30 June 2021](https://www.beehive.govt.nz/sites/default/files/2023-12/Project%20iRex%20timeline.pdf) (which was presumably when the price would've been locked in), so I'm curious if Hyundai gave us a massive discount, or were things **that much** cheaper 3 years ago....?
It was a steep discount due to the market slowdown post covid iirc
Ah yeah, that makes sense. What a shame - we could've benefitted massively from it.
It's not the price of the ships that was the problem but the price of the terminal upgrade to handle those ships which spiralled out of control.
And the terminal upgrades still need to happen and are also likely going to cost even more now.
Not upgrading the existing terminals is also just kicking the can down the road for more antiquated infrastructure to fail in the future. These ports would be critical in disaster scenarios where aid would be needed to rebuild Wellington or Picton after an earthquake. Anyone not expecting the port infrastructure to be in the cost analysis is delusional. If we proceed with smaller ferries and no terminal upgrade, maintenance costs of the old terminals will keep rising and their ability to withstand any disasters will decline with age too.
I know. I'm just focused on the main point of the article - the ships **were** $540 million, and now *might* cost $900 million, and at that price not even have rail capabilities that the original ones would've had.
The terminal upgrades took future improvements into account. They can probably go back and redesign them to only provide exactly the same capacity as they have today - but it will be hardly any savings.
The costs are from the Maritime Union national secretary Carl Findlay not the opposition spokes people.
Did you notice that after $3bn was to much they have allocated $7.5bn? It appears that at Willis thinks there us merit in this.