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The BulletinApril 1, 2025

Rail-enabled ferries are coming to Cook Strait – eventually

Deputy editor
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The ferries will now be delivered in 2029, writes Alice Neville in today’s extract from The Bulletin.

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‘Yes to affordability, no to extravagance’: Winston Peters unveils his ‘pragmatic’ ferry plan 

After December’s anticlimactic announcement of an announcement, Winston Peters’ long-awaited March 31 update had to deliver something  – and he did clear up one of the biggest question marks hanging over the whole saga: the two new ferries will be rail-enabled. Peters took control of the plan to procure replacements for the ageing Interislander fleet in December, a year after the incoming coalition cancelled the Labour government’s costly iReX project. Last year, cabinet failed to agree on a proposition to acquire two “rail-compatible” boats, as Thomas Manch reported for The Post. Peters was adamant the ferries had to be fully rail-enabled – a major point of contention that has delayed the coalition’s progress on the issue – and the newly appointed minister for rail was given until March 31 to develop a better plan.

Yesterday, Peters announced that design specifications for two 200m x 28m ferries (bigger than the current vessels but smaller than those coming under the Labour plan) had been selected and signed off by cabinet. Each ferry would have rail decks with capacity for 40 rail wagons, “given the efficiency of single shunt movements for multiple rail wagons for loading and unloading”, said Peters. Ferry Holdings Ltd, the company set up to procure the ferries, would now invite a shortlist of shipyards into a closed tender process, with a contract to be signed this year.

Ministerial advisory group’s plan rejected

The plan announced yesterday was not what was recommended by a Ministerial Advisory Group (Mag), which, as Georgina Campbell reported in the NZ Herald in December, paid $300,000 to advise the government on what to do. As Oliver Lewis reported (paywalled) for BusinessDesk last month, the Mag encouraged the government to approach a single shipyard and get a deal for two road-only ferries signed off by October 2024, meaning the ships would land by December 2027. “We did not accept that advice,” said Peters yesterday. “We believe in competitive tenders, and a full appreciation of what best serves our country. And road-only ferries came out as more expensive than buying road and rail ferries.” The ferries will now be delivered in 2029, which “will see the current fleet working right up to its use-by date”, as Tom Hunt and Thomas Manch reported for The Post.

The Mag’s concern with rail-enabled ferries was the extensive port infrastructure required to accommodate them. Peters said the shorter length of his boats and a “minimum viable and maximum reuse approach” would keep costs down – Picton’s marine infrastructure would be replaced, while Wellington’s would be modified and reused. Peters said the approach “contrasts sharply with the wanton demolition and extravagant specification under the cancelled project”. The terminal buildings would remain as is. “While some may regret the absence of a Taj Mahal in Picton and the Sydney Opera House in Wellington, the people paying their taxes will not,” said Peters.

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Alice Neville
— Deputy editor

Cost remains under wraps

The exact cost of the project remains under wraps, as revealing the budget would “turn a buyers’ market into a sellers’ market”, but Peters assured it would be “markedly cheaper” than the iReX project. He admitted the terminals would have to be upgraded eventually but expected the port companies to bear those costs, reported Fox Meyer for Newsroom.

The benefit of hindsight

Labour leader Chris Hipkins offered some qualified support for Peters’ new plan, reported Thomas Coughlan for the Herald. Peters brought the original proposal for two mega rail-enabled ferries to the table in 2018 when NZ First was in government with Labour, and cabinet signed off on a plan committing the government to cover their $551m price tag and the cost of replacing port infrastructure. “With the benefit of 2020 hindsight, accepting Winston Peters’ recommendation that we should go for two mega ferries in the first place probably wasn’t the wisest decision,” Hipkins told the Herald. “Two smaller ferries, which is where the government has landed now, might have been better from the outset – that wasn’t what Winston Peters recommended.”

Keep going!
Nicola Willis stands at a podium speaking into several microphones. She wears a purple outfit and smiles slightly. Behind her, a flag with red, white, and blue colors is partially visible, suggesting an official event or announcement.
Nicola Willis makes announcement on grocery competition (Photo by Hagen Hopkins/Getty Images)

The BulletinMarch 31, 2025

Willis gets serious about supermarket competition

Nicola Willis stands at a podium speaking into several microphones. She wears a purple outfit and smiles slightly. Behind her, a flag with red, white, and blue colors is partially visible, suggesting an official event or announcement.
Nicola Willis makes announcement on grocery competition (Photo by Hagen Hopkins/Getty Images)
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Nicola Willis strongly signals she’s willing to get serious about supermarket duopoly, writes Anna Rawhiti-Connell in today’s extract from The Bulletin.

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Nicola Willis seeking information how to attract a third player to market

New Zealanders could be forgiven for being wary of announcements about tackling the supermarket duopoly. 

As Max Rashbrooke wrote for The Spinoff at the end of February, reflecting on both a turn of phrase that’s become ubiquitous and the political holding pattern deployed when addressing matters of competition, “How many times do supermarkets and banks have to be put ‘on notice’ before something actually changes?” Rashbrook’s piece catalogues a long history of banks and supermarkets being “put on notice”. 

Economic growth minister Nicola Willis announced yesterday that she was issuing a “Request for Information” asking supermarket companies what changes would be required to compete in the New Zealand market. 

Stewart Sowman-Lund covered the first announcement from Willis in February, in which supermarkets were again “put on notice”, cataloguing some of the inherent difficulties in enticing a third player into the market and tackling pain at the supermarket checkout.

‘Fraught with risk’

Willis also announced she had “commissioned specialist external advice on ways the existing supermarket duopoly could be restructured to improve competition”. The Herald’s Jenée Tibshraeny has an excellent analysis (paywalled) of the risk Willis is taking, calling her commitment to trying to improve competition, “genuine “ but “Willis attempting to climb Mount Everest under the watchful eye of voters, categorically sick of paying too much for their groceries, is fraught with risk.” 

The advice is being commissioned from Coriolis, the consultancy that told the Commerce Commission that breaking up the duopoly was the only real answer in 2021. A report prepared for the Ministry of Business, Innovation and Employment in 2022 by Coriolis, Sense Partners and Cognitus Economic Insight concluded: “Supermarket divestment could be net beneficial, but only if several key factors aligned well and several key risks could be adequately mitigated and “Divestment of the nature being considered here is unprecedented in New Zealand. The risks of unintended consequences are not trivial.”

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Anna Rawhiti-Connell
— Senior writer

May ‘strain coalition relations’

The Post’s Luke Malpass notes the move may “strain coalition relations” as the Act party “is decidedly unconvinced”.

Act leader David Seymour told The Post on Sunday, “Politicians seek advice all the time, that’s very different from it being Government policy, especially in a Coalition”. “One obvious concern is that if your Government is trying to attract overseas investment, threats to restructure their businesses in New Zealand might have the opposite effect,” he said.

While Labour called yesterday’s announcement “lip service to its promises to bring down the cost of living” and commerce and consumer affairs spokesperson Arena Williams said she had been expecting a “bigger announcement”, Malpass summises that the government “could well be in receipt of opposition support for this move.” “Hipkins’ Labour party,” he writes, “would be highly likely to vote in favour of structural separation, divestment or de-mergers in the sector, should it come to that.” Malpass notes the Green party would also “look at any such legislation favourably.”

Support from Consumer NZ and long-time advocate

Wilkis has received support from Consumer NZ. Chief executive Jon Duffy said, “It’s really good to hear the minister indicate that’s very much on the table, and she’ll be working on getting a plan together for that, whilst other measures are in play”. Speaking to Newstalk ZB this morning, long-time advocate in the telecommunications and grocery sectors, Ernie Newman, said he was sceptical before the announcement but is impressed by what he’s heard. He says Nicola Willis has come across as a “minister on a mission”, and she’s done her homework.