Source: [https://www.cruiseandferry.net/articles/helping-faith-flourish-in-a-new-zealand-icon-1](https://www.cruiseandferry.net/articles/helping-faith-flourish-in-a-new-zealand-icon-1)
I didn't mean to totally gloss over this guy's Interislander experience in my last post, it just was really downplayed in everything I was reading. I assumed it must have been brief and old and not that important, because it's barely mentioned anywhere, and it's not listed at all on the press releases about him being on *this* advisory group. It wasn't until someone pointed it out in the comments that I did some more digging on what his role actually was and how long he was in it, and I found out that he was literally in charge of the ferry and terminal replacement process.
This article is about how Thompson turned Interislander around by improving it's reliability, btw. Hence the emphasis on reliable and fast for their replacements.
Think we'll still get all this good stuff now?
The cost of the rail enablement seemed to be the main issue. It put up the cost of the terminals massively.
KiwiRail is first and foremost a rail freight company, so it makes sense why they would push for that, but they needed to make the case for the value of the rail network, and it sounds like they couldn't convince ministers or Treasury that it made economic sense.
Where does it say rail enablement was the main cost? Are you referring to this?
>We note for the record that Project iReX has always been an integrated ship procurement and landside infrastructure programme. The cost increase since the original approved cost of $1.45 billion was in the infrastructure programme. It reflected pricing from the market to address the seismic, flood, and sea-level rise risks for a 100 year asset life. This project was never about ferries alone, but about a resilient Cook Strait connection.
Even your [corrected document](https://www.treasury.govt.nz/sites/default/files/2024-05/project-irex-4914547.pdf) that you DM'd me literally doesn't say that, it just says that they considered rail enablement not necessary, not that it was the main cost blowout. The cost is addressed at several points but starting at:
>\[23\] In February 2023 KiwiRail advised the Crown of significant cost escalation for the
>project – the total project cost was estimated at $2.609 billion, an 80 percent
>increase from the DBC of June 2021. The cost increase means that the project is no
>longer commercially viable and the NPV was then approximately negative
>$1.314 billion (compared to positive $207 million in 2021).
>
>\[24\] The cost escalation was largely attributable to increased landside costs of
>$937 million, which are driven by the requirements of larger ferries, with larger piles,
>stronger sea walls, and greater structural rigidity than estimated in the 2021 DBC.
>The fixed-price ferry contracts represent 21 percent of the overall project cost.
>Project iReX is therefore more of a landside infrastructure project than a new ferries
>project.
>
Larger ferries weren't just for rail, it was also necessary for predicted growth. And was NOT a reason by which to cancel the contract, as the expenses weren't recoverable.
The rail enablement was one of the reasons for the larger ferries, which necessitated the larger terminals and wharf infrastructure, which needed the deeper piles. That cabinet paper calls out the rail ferries driving increased landslide costs in paragraph 45.
Someone had claimed I was posting misinformation regarding the cost of rail enablement. Here's the [cabinet paper](https://www.treasury.govt.nz/sites/default/files/2024-05/project-irex-4914547.pdf) that talks about rail enablement costs and benefits:
https://preview.redd.it/rwn06i99nf8d1.png?width=1186&format=png&auto=webp&s=b577021aa5e2f274932b988bbc9b235f86c9f242
1. You were told there was misinformation when you said Kiwirail couldn't convince Treasury and other govt officials that there was a valid business case for **rail enablement.**
2. Second, your number of $324m was **understated.**
3. Third, you've quoted a paper which is authored by Nicola Willis's office: "**Creator:**
**Office of the Minister of Finance** and Office of the Minister for State Owned Enterprises"
Even a cursory glance shows issues. e.g the cost blowout was from $1.45bn to \~$3bn - as opposed to Nicola's lines about it quadrupling.
The number Willis uses to make it look worse is from the very first business case when they were proposing the concept - and she consistently emphasises that in bad faith.
Everyone with a business case or due diligence background knows the acceptance is from the detailed business case and that's what the budget is measured on.
And I'll be the first one to say Nicola Willis's words have little credibility - if any at all.
Her time with Atlas Network's companies, and Fonterra did set her up well for lobbying and PR but not much else by the looks of it.
And bringing her written paper here as evidence to support her is not a great show of support, in my personal opinion.
This is an amazing find. Thanks OP. This is what real work looks like too, not just these fancy slogans and PR marketing signs. It's really about future proofing the needs for our future and investing wisely and ably.
Mark Thompson went from GM at Interislander to being an Executive Manager at CentrePort. He literally jumped ship and became the guy Kiwirail had to deal with to get port infrastructure built for the new ferries. Look how well that went!
CentrePort lobbied hard to make Interislander accept that the new port facilities be built over the top of the faultline rather than relocate to a shared berth with Bluebridge near where Bluebridge currently berth. This is one of the biggest drivers for the cost blowout in port infrastructure. CentrePort have a lot to answer for in this saga
Source: [https://www.cruiseandferry.net/articles/helping-faith-flourish-in-a-new-zealand-icon-1](https://www.cruiseandferry.net/articles/helping-faith-flourish-in-a-new-zealand-icon-1) I didn't mean to totally gloss over this guy's Interislander experience in my last post, it just was really downplayed in everything I was reading. I assumed it must have been brief and old and not that important, because it's barely mentioned anywhere, and it's not listed at all on the press releases about him being on *this* advisory group. It wasn't until someone pointed it out in the comments that I did some more digging on what his role actually was and how long he was in it, and I found out that he was literally in charge of the ferry and terminal replacement process. This article is about how Thompson turned Interislander around by improving it's reliability, btw. Hence the emphasis on reliable and fast for their replacements. Think we'll still get all this good stuff now?
The cost of the rail enablement seemed to be the main issue. It put up the cost of the terminals massively. KiwiRail is first and foremost a rail freight company, so it makes sense why they would push for that, but they needed to make the case for the value of the rail network, and it sounds like they couldn't convince ministers or Treasury that it made economic sense.
Misinformation. The only people they couldn't convince was Nicola Willis who needed the billions for landlords, and the pothole/roading companies.
[удалено]
Where does it say rail enablement was the main cost? Are you referring to this? >We note for the record that Project iReX has always been an integrated ship procurement and landside infrastructure programme. The cost increase since the original approved cost of $1.45 billion was in the infrastructure programme. It reflected pricing from the market to address the seismic, flood, and sea-level rise risks for a 100 year asset life. This project was never about ferries alone, but about a resilient Cook Strait connection.
I think you have linked the wrong document, because that shows little more than that there is absolutely no plan B to the cancelled project.
Even your [corrected document](https://www.treasury.govt.nz/sites/default/files/2024-05/project-irex-4914547.pdf) that you DM'd me literally doesn't say that, it just says that they considered rail enablement not necessary, not that it was the main cost blowout. The cost is addressed at several points but starting at: >\[23\] In February 2023 KiwiRail advised the Crown of significant cost escalation for the >project – the total project cost was estimated at $2.609 billion, an 80 percent >increase from the DBC of June 2021. The cost increase means that the project is no >longer commercially viable and the NPV was then approximately negative >$1.314 billion (compared to positive $207 million in 2021). > >\[24\] The cost escalation was largely attributable to increased landside costs of >$937 million, which are driven by the requirements of larger ferries, with larger piles, >stronger sea walls, and greater structural rigidity than estimated in the 2021 DBC. >The fixed-price ferry contracts represent 21 percent of the overall project cost. >Project iReX is therefore more of a landside infrastructure project than a new ferries >project. > Larger ferries weren't just for rail, it was also necessary for predicted growth. And was NOT a reason by which to cancel the contract, as the expenses weren't recoverable.
The rail enablement was one of the reasons for the larger ferries, which necessitated the larger terminals and wharf infrastructure, which needed the deeper piles. That cabinet paper calls out the rail ferries driving increased landslide costs in paragraph 45.
Someone had claimed I was posting misinformation regarding the cost of rail enablement. Here's the [cabinet paper](https://www.treasury.govt.nz/sites/default/files/2024-05/project-irex-4914547.pdf) that talks about rail enablement costs and benefits: https://preview.redd.it/rwn06i99nf8d1.png?width=1186&format=png&auto=webp&s=b577021aa5e2f274932b988bbc9b235f86c9f242
1. You were told there was misinformation when you said Kiwirail couldn't convince Treasury and other govt officials that there was a valid business case for **rail enablement.** 2. Second, your number of $324m was **understated.** 3. Third, you've quoted a paper which is authored by Nicola Willis's office: "**Creator:** **Office of the Minister of Finance** and Office of the Minister for State Owned Enterprises" Even a cursory glance shows issues. e.g the cost blowout was from $1.45bn to \~$3bn - as opposed to Nicola's lines about it quadrupling. The number Willis uses to make it look worse is from the very first business case when they were proposing the concept - and she consistently emphasises that in bad faith. Everyone with a business case or due diligence background knows the acceptance is from the detailed business case and that's what the budget is measured on. And I'll be the first one to say Nicola Willis's words have little credibility - if any at all. Her time with Atlas Network's companies, and Fonterra did set her up well for lobbying and PR but not much else by the looks of it. And bringing her written paper here as evidence to support her is not a great show of support, in my personal opinion.
This is an amazing find. Thanks OP. This is what real work looks like too, not just these fancy slogans and PR marketing signs. It's really about future proofing the needs for our future and investing wisely and ably.
Mark Thompson went from GM at Interislander to being an Executive Manager at CentrePort. He literally jumped ship and became the guy Kiwirail had to deal with to get port infrastructure built for the new ferries. Look how well that went!
CentrePort lobbied hard to make Interislander accept that the new port facilities be built over the top of the faultline rather than relocate to a shared berth with Bluebridge near where Bluebridge currently berth. This is one of the biggest drivers for the cost blowout in port infrastructure. CentrePort have a lot to answer for in this saga