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Nicola Willis announces a new procurement process for two smaller ferries.
Nicola Willis announces a new procurement process for two smaller ferries.

The BulletinDecember 12, 2024

An ‘announcement of an announcement’ of two new boats

Wellington editor
Nicola Willis announces a new procurement process for two smaller ferries.
Nicola Willis announces a new procurement process for two smaller ferries.

The wait for replacement Interislander ferries will drag on until 2029, as ministers reveal a plan to buy two smaller ships, reports Joel MacManus reports from parliament.

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Crown company created to procure two new Interislander ferries by 2029

The long-awaited drama about the new Interislander ferries reached a pivotal moment on Wednesday when finance minister Nicola Willis and newly appointed minister for rail Winston Peters held a press conference titled “ferries announcement” in the Beehive Theatrette. The two ministers revealed that the government had created a new Schedule 4A Crown company to procure two new Interislander ferries by 2029. As 1News reported, shareholding ministers of the new company would be the minister for rail and the ministers of finance and transport. Peters would also take on the responsibility formerly held by the Minister of SOEs for KiwiRail and NZ Railways Corporation. As RNZ’s Russell Palmer reports, Labour leader Chris Hipkins described it as “an announcement of an announcement”.

Precious little detail

Willis and Peters wouldn’t say how much the ferries would cost or whether they would be rail-enabled. Willis said a funding envelope has been established, that the costs are expected to be much less than would have been the case with Project iRex but that they were commercially confidential until procurement and negotiations for landside infrastructure were completed. The projected costs of Project iRex had escalated from $775m to $3.2bn, mostly due to the landside upgrades that would be required to handle the larger ships.

The government is still open to alternative pitches from the private sector and the idea that the ferries could be operated by an entity other than KiwiRail. The new ferries will be purpose-built; Willis confirmed that the government had looked into buying secondhand ferries, but there were no suitable ships on the market. The Herald’s Georgina Campbell did not mince her words (paywalled) on the lack of detail, writing, “It makes one wonder what on earth the government has been doing for the past year, especially because even these vague details aren’t set in concrete”.

This morning, The Post’s Luke Malpass describes handing the project over to Peters while retaining the option to receive pitches from the private sector, which keeps the Act party happy, as having a certain political elegance to it. But, he writes “it does have the downside for the government of creating a political vacuum on the issue for many more months.”

Opposition ‘astounded’, ‘disgusted’ over ‘omnishambles’

Cancelling the iRex contract early into her government’s term was a chance for Willis to put the hammer down and send a clear signal that hers would be a cost-cutting government that wasn’t afraid to make hard choices. With news of an expensive break-contract fee and more high-profile incidents of the current Interislander ferries breaking down, questioning about the wisdom of that decision hasn’t abated. In an opinion piece for Newsroom in August, Carl Findlay, National Secretary of the Maritime Union of New Zealand, wrote, “Ever seen someone lose a billion dollars on a single roll of the dice?”

Following yesterday’s announcement, Act leader David Seymour claimed the cost was “approximately half the cost of Labour’s proposal”. Peters would not say how much the new ships might cost but called Seymour’s comments inaccurate and unhelpful, RNZ reported.

Labour’s finance spokesperson Barbara Edmonds said it would end up costing more. “[Willis] has taken a whole year to come up with smaller ferries that are going to cost the country more money in the long run. The portside infrastructure will still have to be built, she’s just burdening future New Zealanders with the cost,” Edmonds said.

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Hipkins said he was “astounded” that after a year, there was still “no more information about what they’re actually going to do”.

Green party transport spokesperson Julie Anne Genter said the Hyundai order for two rail-enabled ferries for $550m was “one of the best deals the country ever signed up to” and emphasised that this new deal meant the new ferries would arrive in 2029 rather than 2026. Genter described Willis’s decision as “catastrophic” and said she thought it was an “omnishambles”.

The obvious question now is what kind of ferries the government will be able to find and how much money it will save relative to Project iRex. Given the amount of money already spent on the Hyundai ferries and the cost of breaking the contract, it will have to be a significantly cheaper deal overall to still make the numbers work. Willis and Peters seemed confident they could make it happen.

Timeline to date

  • November 2018 – KiwiRail completes a business case indicating a preference for two rail-enabled ships, a total project cost of $775m.
  • November 2019 – KiwiRail submits a budget bid for $682m, estimating the total costs to reach $1.4 billion.
  • May 2020 – The Labour government allocates $400m in Budget 2020.
  • January 2021 – KiwiRail submits another budget bid, this time for $565m.
  • June 2021 – KiwiRail enters into a fixed-price contract with Hyundai Mipo Dockyard to construct two ferries, which will be delivered in 2025 and 2026.
  • October 2022 – It becomes clear that the port infrastructure costs associated with the project are escalating in cost and pose a risk of failure.
  • February 2023 – Updated estimates put the project’s cost at $2.6bn. KiwiRail submits a bid for $1.2bn in Crown funding, triggering a series of reviews and updates.
  • December 2023 – Nicola Willis announces that Cabinet has declined to fund the iRex project due to cost blowouts and the likelihood of future repeats.
  • February 2024 – The government appoints a ferry ministerial advisory group to investigate options and advise on what would make a viable ferry service.
  • November 2024 – Willis and Peters announce a new procurement process for two smaller ferries.
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The BulletinDecember 11, 2024

Greyhound racing sprints toward the finish line

The Bulletin editor
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Some in the industry say a small number of negligent trainers ‘buggered it’ for everyone else, writes Stewart Sowman-Lund for The Bulletin.

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‘Protecting the welfare of racing dogs’

Let’s return to a topic we talked about way back in June given there has been a significant update from the government. I’m talking about greyhound racing, with Winston Peters confirming yesterday he would take long-awaited action to ban the sport in New Zealand. Investigative reporter Michael Morrah has been covering the issue for years, first for Newshub and now for the NZ Herald. As he reported, the decision by Peters to outlaw greyhound racing followed three critical reviews of the industry along with a number of reported injuries. “This is not a decision that is taken lightly but is ultimately driven by protecting the welfare of racing dogs,” Peters, a known dog lover, told media.

While the ban has been announced, it will take almost two years for it to come into effect in order to let the industry adjust to the change. Urgent legislation was also passed yesterday in parliament to try and prevent racing dogs being killed as a result of the impending ban. Thousands of dogs will need to be rehomed, too. The Herald’s Cherie Howie (paywalled) spoke to a greyhound adopter who said the dogs make great family pets. “They’re not damaged goods. They’re really loving dogs that are gonna need homes.”

A long time coming

We’ll get into the immediate response to the announcement shortly, but first, a little backstory. Peters has been contemplating this ban for sometime given cabinet was considering a move way back in May. It goes back a lot further than that, however. In 2017, a major report revealed more than 2,000 dogs had been injured, and 165 put down, directly due to racing over the previous three seasons. By 2021, the former Labour government had launched the third wide ranging review into the industry in a decade, putting it on notice. No decision was made before the last election despite a subsequent critical report by the Racing Integrity Board. And while Christopher Luxon was on the record during the election campaign as being in favour of a ban, the decision needed to go through Peters who had previously pledged to “clean the industry up” but never expressly spoken in favour of an outright ban. “[Luxon’s] got a minister now who knows more about it than he does, and I’m on the case, alright?“ Peters told reporters in March.

For those wondering whether action could be taken in the future on horse racing, another industry that has its own history of animal welfare concerns, that seems unlikely. Peters declared earlier this year that the industry needs to raise the stakes and get its “mojo” back, reported RNZ’s Felix Walton.

A few bad apples?

The greyhound industry, reported RNZ, said it had a lower rate of euthanasia on race days than the horse racing industry (Peters denied that horse racing was a more dangerous industry, speaking to Morning Report moments ago). “We believe that greyhound racing as an industry has taken huge, huge strides over the last two years and is leading the way in the racing industry from an animal welfare perspective, so the decision today is clearly very disappointing,” said Greyhound Racing New Zealand chief executive Edward Rennell. Peters acknowledged the progress made by the industry, but said it wasn’t enough. A legal challenge was “extremely remote”, reported the NBR (paywalled), meaning the decision announced yesterday seems unlikely to be wound back.

Writing for The Press, Charlie Mitchell looked at how Canterbury’s racing scene appears to have contributed to the sport’s demise, with a pattern of issues linked to the Addington race track including an uptick in injuries to dogs. A leading trainers in the region, Riley Evans, said a small number of negligent trainers had “buggered it for the rest of us”, reported The Post’s Brendon Egan. Another, Matt Roberts, agreed: “It’s devastating, especially when you know 95% of the trainers out here have been doing right by their dogs and there’s been a couple of rotten eggs who have ruined it for everyone”.

But animal welfare advocates said the writing had been on the wall for a long time, and the government made the right decision. “The sport is inherently dangerous… And whilst we appreciate the industry has made some improvements, it has completely lost its social licence,” the SPCA’s chief scientific officer Arnja Dale said, reported Stuff.

All eyes on us

In an opinion piece for the Herald, racing reporter Michael Guerin acknowledged that while the demise of greyhound racing was about the dogs, it was also about the people involved in the industry. “I feel for those greyhound people, some of them kind people who love animals and dogs more than anybody.”

Some will likely move overseas to continue their passion. You may be surprised to learn that New Zealand is currently one of just five nations to still have a greyhound racing industry. The other four are the UK, US, Australia and Ireland. It will be interesting, given those nation’s close ties to New Zealand, whether our decision sets a precedent. The decisions our government has grappled with are not unique. In the UK, reported the Vet Times in October, the government has suggested it could take action to address animal welfare concerns, but a wholesale ban was unlikely. Australia, too, is facing renewed calls to act almost a decade after an investigation exposed the preventable deaths thousands of young dogs a year and triggered a (later reversed) ban, as explained here by the BBC. Whether our government’s actions prompt other countries to take a look remains to be seen, but the rest of the world will be watching.