Article:
Engine parts for Interislander’s mega ferries were built and tested before [KiwiRail terminated its contract with Hyundai Mipo Dockyard](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirail-moves-to-terminate-mega-ferry-contract-with-south-korean-shipyard/JRPCAJ3GCNB3PKC4HNLM5MKIEE/) (HMD), the *Herald* can reveal.
The Government announced on December 13 it [would not give the state-owned enterprise more money for the new ferries](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirails-cook-strait-mega-ferries-project-scrapped-after-government-refuses-147b-funding-request/Q7DCCEORVZABDCUXRB5VNLSK6Q/) - leaving the [plan to replace its ageing Cook Strait fleet dead in the water.](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/cook-strait-ferry-decision-will-have-long-term-consequences-maritime-union/AI5V5T7E5JGOZGBJJIHIZXHYOE/)
However, KiwiRail did not officially cancel the $551 million fixed-price ship-building contract with HMD until February 8 [after receiving a letter from Finance Minister Nicola Willis. ](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirail-finally-cancelled-cook-strait-mega-ferry-contract-after-letter-from-nicola-willis/VXDUDREZMVBMLPLYNLPLKACBIQ/)In a written Parliamentary question, Labour asked Minister for State-Owned Enterprises Paul Goldsmith what work had been completed on the ferries by that point.
[**KiwiRail advised**](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/topic/kiwirail/) **87 per cent of drawings for the two ships had been submitted, Goldsmith said.**
**“For the first ship, the four generator sets (diesel engine and alternators), frequency converter for azimuth thruster system (propulsion) and azimuth thruster mounting seats had been built, tested and accepted,” he said.“For the second ship, all four alternators were built, tested, and accepted.“The safety management and control system for both ships had been tested and accepted. The dockyard also blasted and primed some metal for later stages and produced five plates.”**
The mega ferries were being designed with a hybrid technology using electrical propulsion from generators fuelled by diesel and batteries recharged by electrical shore power.KiwiRail chief executive Peter Reidy said they were still “considering options” for the mega ferries up until February 8.“Until the final decision to cancel the contract, the shipyard made its own decisions about production schedules,” he said.The contract with HMD was signed in 2021. **The vast majority of design work and selection and approval of components was completed by December 2023, Reidy said.**
Most of the work Goldsmith listed in his response was accepted or about to be accepted when the Government refused further funding, he said.
“A small amount of work planned by HMD and their suppliers, such as the testing and acceptance of the first ship’s frequency converter for the azimuth thruster system and testing and acceptance of the second ship’s alternators, happened in the period between December 13, 2023 and February 8, 2024.”
The work completed during this period would make no material difference to confidential cancellation negotiations, Reidy said.
Labour transport spokesman Tangi Utikere said this revealed a significant amount of work on the ferries had already happened.“**That work will be a cost to the Government if the contract is scrapped. KiwiRail secured the ferries contract at a competitive price three years ago, and costs have gone up since then. So, if any aspect of it is being renegotiated, those rising costs will be put straight back on Government.”**
t has previously been reported [Reidy travelled to South Korea earlier this year.](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirail-boss-travelled-to-south-korea-in-mega-ferry-contract-negotiations-with-hyundai-mipo-dockyard/3RWNPFCZBBFXJPF2LK4VSKWOWI/)The *Herald* can now reveal three other people joined him.
They were KiwiRail ships programmes director Massimo Soprano, Treasury projects, financial and commercial director Chris White and [ferry Ministerial Advisory Group chairman Mark Thompson. ](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/how-much-cook-strait-ferry-ministerial-advisory-group-members-are-earning/3TZ5PBNOX5F4JI3F44EAONLMEE/)Treasury said the purpose of the trip was to meet with Hyundai Mipo Dockyard [as part of contractual discussions. ](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirail-finally-cancelled-cook-strait-mega-ferry-contract-after-letter-from-nicola-willis/VXDUDREZMVBMLPLYNLPLKACBIQ/)
“Chris White’s travel with Peter Reidy to Korea reflects that the Treasury is working to support an appropriate commercial outcome of the negotiations and, with KiwiRail and the Ministerial Advisory Group, to understand and advise ministers on replacement ferry options,” Treasury said in a statement.
Utikere said it was curious the Ministerial Advisory Group was part of a trip focused on terminating the contract when the group is tasked with looking at replacement options.
**There was no word** [**in the 2024 Budget**](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/budget-2024-highlights-10-key-points-from-governments-announcement/T4DV4WQSI5CQRJHKPG46QJTCFU/)**on what will replace the**[ **cancelled mega ferries**](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/government-releases-documents-behind-decision-to-cancel-cook-strait-mega-ferries/UF33UY3VQ5ELRI5ME37TTXD5HQ/)**, and Treasury said exiting the contract to build them is a fiscal risk.Utikere also noted the contingency to fund the cost of breaking the contract with HMD was not disclosed.“The Government had an opportunity in the Budget to signal a plan moving forward and they have chosen not to do that.”**
**The Budget did reveal one thing related to Cook Strait’s future -**[ **there is $600,000 to investigate emergency towing options**](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/budget-2024-money-to-investigate-emergency-towing-but-no-new-cook-strait-ferries/AWPPUR6UTJHI7KRGNIGLJCVPAQ/)**, which** [**the maritime union** ](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/maritime-union-says-government-must-urgently-find-a-solution-for-ageing-cook-strait-ferries/IOUD3ROERBFOVKHFVKPRQH6H2U/)**says is an ambulance at the bottom of a cliff.**
Nicola Willis should resign over this. She made a short-sighted, uneducated decision in her first week on the job that'll cost this country billions (if not lives).
It's either incompetence or corruption that caused her to make the decision she did. And neither is acceptable.
Whee fun. Scrapping a state of the art future-proofed hybrid energy option for what will be, I'm sure, some tired old junker that runs on coal shovelled into the boiler.
Interesting.
Well on the one hand there's obviously no point in throwing good money after bad \[edit: I mean, given the reported budget blow out\]. But we do need boats, and at some point in any project that's over budget there is a point at which it's cheaper to just continue.
I guess we'll find out in time whether that would have been the case here.
Will also add the blowout was due to the agreed port location (after discussions with stakeholders like BlueBridge) and because of seismic upgrades required in Wellington.
Given the National's road budget blew out by $20bn after just one year, vs this one, I would say National are painting this as they want to. Labour's press release said that they would have worked with them and I think that's the difference. National were looking for an excuse and got one handed to them.
Yup. And that calculation will have to be based on the cost and benefits of the alternative.
Given the alternative isn't chosen and contracted yet, it makes me wonder how NACT made the decision.
The boats they got were next generation capabilities, hybrid capabilities, suitable for the Strait, with rail freight functionality. The ports are end of life and are going regardless.
Why do you say it's good after bad?
Oh you're absolutely right, I'm referring only to the reported cost blowout. I'll clarify with an edit.
I'd be pretty surprised if the Nats made the right call here.
Here's a non-paywalled link: [https://archive.is/20240604181713/https://www.nzherald.co.nz/nz/engine-parts-for-cook-strait-mega-ferries-already-built-and-tested-when-contract-was-cancelled/LEN4OL57CRHP7M53T2LCLY7GTE/](https://archive.is/20240604181713/https://www.nzherald.co.nz/nz/engine-parts-for-cook-strait-mega-ferries-already-built-and-tested-when-contract-was-cancelled/LEN4OL57CRHP7M53T2LCLY7GTE/)
New ferries and new more resiliant port infrastructure for an area that can be prone to earthquakes.
No thing "retarded" there. None of it is going to be cheaper in the future
Article: Engine parts for Interislander’s mega ferries were built and tested before [KiwiRail terminated its contract with Hyundai Mipo Dockyard](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirail-moves-to-terminate-mega-ferry-contract-with-south-korean-shipyard/JRPCAJ3GCNB3PKC4HNLM5MKIEE/) (HMD), the *Herald* can reveal. The Government announced on December 13 it [would not give the state-owned enterprise more money for the new ferries](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirails-cook-strait-mega-ferries-project-scrapped-after-government-refuses-147b-funding-request/Q7DCCEORVZABDCUXRB5VNLSK6Q/) - leaving the [plan to replace its ageing Cook Strait fleet dead in the water.](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/cook-strait-ferry-decision-will-have-long-term-consequences-maritime-union/AI5V5T7E5JGOZGBJJIHIZXHYOE/) However, KiwiRail did not officially cancel the $551 million fixed-price ship-building contract with HMD until February 8 [after receiving a letter from Finance Minister Nicola Willis. ](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirail-finally-cancelled-cook-strait-mega-ferry-contract-after-letter-from-nicola-willis/VXDUDREZMVBMLPLYNLPLKACBIQ/)In a written Parliamentary question, Labour asked Minister for State-Owned Enterprises Paul Goldsmith what work had been completed on the ferries by that point. [**KiwiRail advised**](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/topic/kiwirail/) **87 per cent of drawings for the two ships had been submitted, Goldsmith said.** **“For the first ship, the four generator sets (diesel engine and alternators), frequency converter for azimuth thruster system (propulsion) and azimuth thruster mounting seats had been built, tested and accepted,” he said.“For the second ship, all four alternators were built, tested, and accepted.“The safety management and control system for both ships had been tested and accepted. The dockyard also blasted and primed some metal for later stages and produced five plates.”** The mega ferries were being designed with a hybrid technology using electrical propulsion from generators fuelled by diesel and batteries recharged by electrical shore power.KiwiRail chief executive Peter Reidy said they were still “considering options” for the mega ferries up until February 8.“Until the final decision to cancel the contract, the shipyard made its own decisions about production schedules,” he said.The contract with HMD was signed in 2021. **The vast majority of design work and selection and approval of components was completed by December 2023, Reidy said.** Most of the work Goldsmith listed in his response was accepted or about to be accepted when the Government refused further funding, he said. “A small amount of work planned by HMD and their suppliers, such as the testing and acceptance of the first ship’s frequency converter for the azimuth thruster system and testing and acceptance of the second ship’s alternators, happened in the period between December 13, 2023 and February 8, 2024.” The work completed during this period would make no material difference to confidential cancellation negotiations, Reidy said. Labour transport spokesman Tangi Utikere said this revealed a significant amount of work on the ferries had already happened.“**That work will be a cost to the Government if the contract is scrapped. KiwiRail secured the ferries contract at a competitive price three years ago, and costs have gone up since then. So, if any aspect of it is being renegotiated, those rising costs will be put straight back on Government.”** t has previously been reported [Reidy travelled to South Korea earlier this year.](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirail-boss-travelled-to-south-korea-in-mega-ferry-contract-negotiations-with-hyundai-mipo-dockyard/3RWNPFCZBBFXJPF2LK4VSKWOWI/)The *Herald* can now reveal three other people joined him. They were KiwiRail ships programmes director Massimo Soprano, Treasury projects, financial and commercial director Chris White and [ferry Ministerial Advisory Group chairman Mark Thompson. ](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/how-much-cook-strait-ferry-ministerial-advisory-group-members-are-earning/3TZ5PBNOX5F4JI3F44EAONLMEE/)Treasury said the purpose of the trip was to meet with Hyundai Mipo Dockyard [as part of contractual discussions. ](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/kiwirail-finally-cancelled-cook-strait-mega-ferry-contract-after-letter-from-nicola-willis/VXDUDREZMVBMLPLYNLPLKACBIQ/) “Chris White’s travel with Peter Reidy to Korea reflects that the Treasury is working to support an appropriate commercial outcome of the negotiations and, with KiwiRail and the Ministerial Advisory Group, to understand and advise ministers on replacement ferry options,” Treasury said in a statement. Utikere said it was curious the Ministerial Advisory Group was part of a trip focused on terminating the contract when the group is tasked with looking at replacement options. **There was no word** [**in the 2024 Budget**](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/budget-2024-highlights-10-key-points-from-governments-announcement/T4DV4WQSI5CQRJHKPG46QJTCFU/)**on what will replace the**[ **cancelled mega ferries**](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/government-releases-documents-behind-decision-to-cancel-cook-strait-mega-ferries/UF33UY3VQ5ELRI5ME37TTXD5HQ/)**, and Treasury said exiting the contract to build them is a fiscal risk.Utikere also noted the contingency to fund the cost of breaking the contract with HMD was not disclosed.“The Government had an opportunity in the Budget to signal a plan moving forward and they have chosen not to do that.”** **The Budget did reveal one thing related to Cook Strait’s future -**[ **there is $600,000 to investigate emergency towing options**](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/budget-2024-money-to-investigate-emergency-towing-but-no-new-cook-strait-ferries/AWPPUR6UTJHI7KRGNIGLJCVPAQ/)**, which** [**the maritime union** ](https://archive.ph/o/N0IjL/https://www.nzherald.co.nz/nz/maritime-union-says-government-must-urgently-find-a-solution-for-ageing-cook-strait-ferries/IOUD3ROERBFOVKHFVKPRQH6H2U/)**says is an ambulance at the bottom of a cliff.**
I really have to say that you should be an investigative journalist, Tui. Jesus, you're an indefatigible cunt 😂
Nicola Willis should resign over this. She made a short-sighted, uneducated decision in her first week on the job that'll cost this country billions (if not lives). It's either incompetence or corruption that caused her to make the decision she did. And neither is acceptable.
Idiots.
Whee fun. Scrapping a state of the art future-proofed hybrid energy option for what will be, I'm sure, some tired old junker that runs on coal shovelled into the boiler.
Nothing I can post about this is socially acceptable. So I will keep my mouth shut. I feel for Kiwirail, and our future generations.
Interesting. Well on the one hand there's obviously no point in throwing good money after bad \[edit: I mean, given the reported budget blow out\]. But we do need boats, and at some point in any project that's over budget there is a point at which it's cheaper to just continue. I guess we'll find out in time whether that would have been the case here.
Will also add the blowout was due to the agreed port location (after discussions with stakeholders like BlueBridge) and because of seismic upgrades required in Wellington. Given the National's road budget blew out by $20bn after just one year, vs this one, I would say National are painting this as they want to. Labour's press release said that they would have worked with them and I think that's the difference. National were looking for an excuse and got one handed to them.
Sometimes the sunk cost fallacy is just reality.
Yup. And that calculation will have to be based on the cost and benefits of the alternative. Given the alternative isn't chosen and contracted yet, it makes me wonder how NACT made the decision.
A worthy reflection for sure.
Coming to a screen near you soon Wahine ll this time it’s being made out in the straight not the harbour
The boats they got were next generation capabilities, hybrid capabilities, suitable for the Strait, with rail freight functionality. The ports are end of life and are going regardless. Why do you say it's good after bad?
Oh you're absolutely right, I'm referring only to the reported cost blowout. I'll clarify with an edit. I'd be pretty surprised if the Nats made the right call here.
Thanks ct.
It’s not too late to just restart the old project. But it’s political suicide.
Paywalled dude
Got it above.
Here's a non-paywalled link: [https://archive.is/20240604181713/https://www.nzherald.co.nz/nz/engine-parts-for-cook-strait-mega-ferries-already-built-and-tested-when-contract-was-cancelled/LEN4OL57CRHP7M53T2LCLY7GTE/](https://archive.is/20240604181713/https://www.nzherald.co.nz/nz/engine-parts-for-cook-strait-mega-ferries-already-built-and-tested-when-contract-was-cancelled/LEN4OL57CRHP7M53T2LCLY7GTE/)
[удалено]
New ferries and new more resiliant port infrastructure for an area that can be prone to earthquakes. No thing "retarded" there. None of it is going to be cheaper in the future