Category: Cook Strait Ferries

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Government ferry announcement fails to launch

Source: Maritime Union of New Zealand

The Union representing Cook Strait ferry workers has expressed amazement at the Government’s announcement today on the Cook Strait ferries.

Maritime Union of New Zealand National Secretary Carl Findlay says the Government has just kicked the can down the road on hard decisions once again.

“The only real announcement today was Nicola Willis announcing she will soon be sacked from the Finance portfolio.”

The appointment of Winston Peters as Minister for Rail and the setting up of a Schedule 4 entity to procure ferries were widely expected, he says.

He says no costs were provided by the Finance Minister and the Government was using commercial confidentiality as a fig leaf to conceal how its decisions had led New Zealand into a very expensive dead end.

Mr Findlay says the Finance Minister’s claims that her ferry deal would be cheaper than the iRex project had no credibility.

“How can she make such bold assurances when she hasn’t got a deal or even a confirmed plan?”

He says the only clear information available was that the ferries would be smaller and less capable, with no information about port side infrastructure.

The suggestion of private operators being involved created more confusion, he says.

“What New Zealand wanted today was certainty and a path forward, and what we got was an admission of failure from the Minister of Finance.”

Mr Findlay says the appointment of Winston Peters as Minister of Rail was an interesting situation, as Mr Peters understood the New Zealand rail network requires rail enabled ferries, unlike the Minister of Finance.

He says there is still an opportunity for New Zealanders to insist the Government procure fit for purpose rail enabled ferries.

“In the meantime, the future of this essential infrastructure hangs in the balance.”

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New Zealanders want publicly-owned rail ferries!

Source: Maritime Union of New Zealand

New polling released on 15 October by the Maritime Union of New Zealand (MUNZ) shows the public wants publicly owned, rail enabled ferries.

The poll was conducted by Talbot Mills over the period of 2-14 October and asked:

New ferry options

As you may be aware, in relation to the Cook Strait ferries, “rail-enabled” means freight carriages can roll onto and off of the ferry directly rather than requiring unloading and reloading onto trucks as additional handling steps on each side of Cook Strait. The efficiency gains of being “rail enabled” is thought to add 10-20% to the overall cost to the ferries/infrastructure. The government is now considering three possible options for new ferries. Which of the following options is closest to the one you would support? 

Results showed a clear public preference:

Maritime Union spokesperson Victor Billot says “This shows that New Zealanders can see the terrible mistake the Minister has made in cancelling the new rail ferries and that is only going to get more obvious as the massive costs of this fiasco, like the cancellation fee of up to a half a billion dollars, come to light.

“Rail enabled and publicly owned ferries are vital to New Zealand’s domestic freight. No rail ferries would likely mean no viable rail system, and privatising would be like putting a toll booth on the strait and sending the revenue overseas.

“Unions want rail-enabled ferries, so do logistics companies including Mainfreight, New Zealand First has just said they want them, and now it’s clear the people of New Zealand want them too. The question is why is the Finance Minister so intent on forcing New Zealanders into a bad deal that nobody wants?”

Road-bridging – the practice of taking containers from trains and transporting them onto non-rail ferries adds up to $200 per container cost and takes up to three hours more per sailing. Industry experts have noted this additional cost would price rail out of the north/south freight market.

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Connemara failure highlights urgent need to address ferry fiasco

Source: Maritime Union of New Zealand

The power loss of the Bluebridge ferry Connemara in the Cook Strait last night highlights the importance of a resilient publicly-owned interisland ferry service, says the Maritime Union of New Zealand (MUNZ).

MUNZ National Secretary Carl Findlay says this issue with the Bluebridge service alongside other previous issues demonstrates the need for high-quality and fit for purpose ferries on the strait. 

“Once again it’s just been a matter of the quick thinking of a highly skilled crew and good luck with the conditions that there has been a safe recovery of the vessel and people aboard.

“We can’t keep relying on luck.

“Cook Strait is the most critical route for New Zealand’s freight transport system and it needs to be resilient. That means public owned and rail enabled ferries that are reliable, safe, and fit for purpose.

“It’s worth noting that the Connemara is much newer than the ships run by Kiwirail and was built by the provider rumoured to be the Government’s frontrunner for new interislander ferries, StenaLine.

“Just last month the shareholding Minister, Nicola Willis, was in Parliament touting the benefits of private ferries. This shows once again how wrong-headed that statement and her decision to cancel the iRex project was.

“It’s getting close to a year without a decision or even the final negotiation of the iReX cancellation that is likely to cost us hundreds of millions of dollars.

“The government needs to swallow its pride and go back to Hyundai to negotiate the iReX deal.

“It’ll cost us more now because of this government’s rash decision to cancel the original deal but nowhere near as much as how much a failed ferry system will cost our freight customers, our economy, and the safety of our crews and passengers.”

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Finance Minister needs to explain ferry decision cost to taxpayer

Source: Maritime Union of New Zealand

The Maritime Union of New Zealand says the cancellation cost for the iRex ship build is likely to come in at more than NZ $300 million, and could run up to a maximum cost approaching a half a billion dollars (NZD) at current rates. 

This would be on top of around a half a billion NZD in sunk cost on the cancelled iRex project – figures the Maritime Union has been advised on after consulting with the maritime industry here and offshore.

Maritime Union of New Zealand National Secretary Carl Findlay says the Finance Minister needs to explain how this happened and why she should keep her job. 

“This single decision is likely to have torched a billion dollars of taxpayer’s money with nothing to show for it. It’s fiscal arson.”

Mr Findlay says on top of this cost, New Zealand still needs to buy new ferries. 

He says unlike the iRex ferries cancelled by the Minister, which were purchased at a fixed price in 2021, their replacement will have to be bought at 2024 shipbuilding prices, which are currently at their highest since before the global financial crisis of 2008.

“Between that and our dollar being much weaker than it was when we struck the 2021 deal, the Government’s replacement ships could cost twice as much to build as the cancelled ones.”

Mr Findlay says industry players believe the Government is looking to hide some of this cost through a Private Public Partnership. 

He says we’ve seen time and time again all this would do is increase the expense, and shift it onto users and future taxpayers.

“Putting a private for-profit gatekeeper on the key freight route between our main islands is a recipe for economic disaster.

“Prime Minister Luxon needs to bite the bullet, try to salvage the iRex deal in whatever way he can, and admit the cost his Finance Minister’s commercial blunder has put on the taxpayer.

“He should also ask himself whether his Finance Minister should be left in charge of running our economy after making this colossal economic and commercial mistake.”

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Ferry report does not solve the big problem

Source: Maritime Union of New Zealand

The Maritime Union has sounded a note of caution about the seaworthiness of Interislander ferries.
KiwiRail has today released a summary of a maritime assessment of the three Interislander ferries carried out by DNV, which says the ships are in reasonable condition.
Maritime Union of New Zealand National Secretary Carl Findlay says the Union appreciates the efforts being made by KiwiRail, but members on the ferries had real concerns about health and safety.
“Our members crew those ferries, so if something does go wrong they are placed in danger.”
Mr Findlay says the Union is treating the conclusions of the DNV report with caution.
He says keeping the current vessels running until the end of the decade is a stop gap measure at best.
“There have been a number of technical issues with the ferries already, some with potentially very serious outcomes, and the fact remains that there are many ageing systems and components in service on the ferries.”
Mr Findlay says that KiwiRail has been put in an impossible position.
“KiwiRail doesn’t really have any choice but to soldier on with end of life vessels and push up maintenance costs and maintenance time for the ships.”
He says the main problem remains – there is no clear indication yet what the Government has planned in place of the iRex project it dumped last year.
Mr Findlay says the full cost of abandoning the iRex project is yet to be determined and would possibly wipe out any savings on new ferries and terminal infrastructure.
 

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Ferry debacle means New Zealand is ‘steering blind’

Source: Maritime Union of New Zealand

Confusion around the future of KiwiRail’s Cook Strait ferries has left New Zealand ‘steering blind’ with its main inter island transport link, says the Maritime Union.

The latest development in the ferry saga is a suggestion in ministerial documents that KiwiRail might exit the Cook Strait ferries altogether if it is commercially unviable without subsidy.

Briefing documents from the Ministerial Advisory Group and Ministry of Transport have been released to the media under the Official Information Act.

Maritime Union of New Zealand National Secretary Craig Harrison says this scenario is deeply concerning and shows the Government has dropped the ball on transport.

Mr Harrison says he is surprised no one in the Government could foresee the consequences of cancelling iRex project funding last year.

“Within a few months we have gone from looking forward to modern ferries and fit for purpose terminals that would support our economy and producers for decades, to the future of interisland transport and everyone who relies on it being in free fall.”

He says while Strait Shipping currently offer ferry services that complement KiwiRail ferries, the scenario of putting the entire connection in the hands of a single overseas-owned monopoly would be a grave error, and would probably not be viable.

“The idea there is some magic market solution is not credible, because any operator will still have to source and pay for suitable vessels.”

He says the primary focus of interisland ferries should be their importance in the supply chain and the national economy, which included rail capability.

“The Cook Strait is part of the ‘blue highway’ – an extension of our national road and rail links.”

Mr Harrison says the current ferries are nearing end of life and are experiencing ongoing maintenance issues, with potentially catastrophic outcomes.

Interisland ferry Kaitaki lost power on its approach into Wellington Harbour on 28 January 2023, and was left drifting towards the coast in heavy weather with more than 800 passengers and 80 crew on-board. It issued a mayday before managing to restart engines and returning to port.

KiwiRail is now facing a health and safety charge relating to this incident brought by regulator Maritime New Zealand.

“Continuing to lease second hand vessels would still be costly, and mean there will still be ageing ferries on Cook Strait, increasing the risk of mechanical failure, delays, maintenance costs, and safety risks.”

Mr Harrison says the costs of cancelling the project at Korean shipbuilders Hyundai has not yet been confirmed but could run into hundreds of millions of dollars.

A suggestion by KiwiRail that the ferries be built, then on sold in order to try and recoup some of the cost of the cancelled project, was quashed by the Minister of Finance.

However, it has been reported the new Ministerial Advisory Group on the ferries has suggested this could be a potential option to avoid a massive financial loss.

Mr Harrison says further drawbacks include the failure to move to new low-emission technology and the implications for our climate change response.

Globally-recognised Climate Bonds Initiative certification issued to KiwiRail for a $350 million green loan has been revoked due to the cancellation of the ferry purchase.

The Maritime Union view is the Government should review the entire decision to cancel the new ferries and new terminals, says Mr Harrison.

“There is an opportunity to revisit the project, seek cost savings if required, then get on with the only responsible course of action which is a fit for purpose Cook Strait ferry link with modern vessels and terminals.”

He says it is now clear that planned tax cuts are not feasible as essential infrastructure investment has to take priority.

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Cook Strait connection in limbo

Source: Maritime Union of New Zealand

The Maritime Union of New Zealand says pressure is mounting on the Government to provide leadership on the Cook Strait ferries.

One year ago, then National Party opposition Transport Spokesperson Simeon Brown described the Cook Strait ferries as the “the biggest pothole on State Highway 1” after multiple technical problems with ageing ships.

In August 2023, he then described the current ferries as causing “significant safety concerns.”

Maritime Union of New Zealand National Secretary Craig Harrison says the future of Cook Strait has now become a “black hole not a pot hole” in our transport network, due to the Government’s demolition of the iRex project.

“Despite his strong criticisms prior to being elected, we have not heard a peep out of Transport Minister Simeon Brown recently about the future of the Cook Strait as a key transport link.”

He says the new Government’s iRex decision in late 2023 has left the future of the interisland ferries in limbo.

Mr Harrison says many industry figures and commentators from across the political spectrum have expressed concerns about the future of the Cook Strait connection and the logic of the Government decision.

He says there is a danger that New Zealand will end up with a cheap, sub-optimal ferry option that will see ongoing disruption and safety issues.

“The long term cost may end up a lot higher.”

Mr Harrison says the Government may still have to walk back its hasty call to can the new ferries and terminals.

KiwiRail will appear before the Transport and Infrastructure Select Committee at Parliament on Thursday 15 February.

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Prosecution exposes lack of Government ferry plan  

Source: Maritime Union of New Zealand

The Maritime Union is calling on the Government to review its decision to dump planned new Cook Strait ferries after the prosecution of a ferry operator.

Industry regulator Maritime NZ has filed a charge under the Health and Safety at Work Act against KiwiRail this week in relation to the January 2023 loss of propulsion incident involving the Interislander ferry, Kaitaki.

The Kaitaki lost power on its approach into Wellington Harbour on 28 January last year, with more than 800 passengers and 80 crew on-board. It then issued a mayday. After regaining limited power, the ferry made its way to port where its passengers were able to safely leave it and come ashore.

Maritime Union of New Zealand National Secretary Craig Harrison says the most important sea link in the country is in jeopardy.

“We have a ridiculous situation where the Government regulator is having to prosecute a State owned enterprise for ferry problems, but the Government has just cancelled new ferries that would solve the problem.”

He says Maritime New Zealand is simply doing its job, but KiwiRail has been placed in an impossible position by the Government due to long term underfunding. 

“The real issue here is historic underinvestment in ferries and coastal shipping over several decades, which has led to a crisis point in the safety and reliability of our supply chain.”

Mr Harrison says two new modern ferries and new terminals had been planned as part of the iRex ferry upgrade project, but were effectively cancelled in December 2023 when the new Government withdrew support for the project.

“The decision by the Government to walk away has left a credible solution to the ferry issue in limbo.”

Mr Harrison says the current Interislander ferries are at their end of life, and replacing them with other ageing vessels was just kicking the can down the road.

He says it would be unacceptable if State Highway One was allowed to fall to pieces, yet the ‘blue highway’ of Cook Strait was an extension of our main road and rail links.

Mr Harrison says the possibility of another serious incident is very real despite the best efforts of KiwiRail. 

He says failure to modernize this essential infrastructure leaves New Zealand exposed to further delays, service outages, expense for industry, and safety issues, with our main inter-Island connection. 

A review of the ill-judged decision to cancel the iRex project needed to take place, he says.

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Ferry unions demand Finance Minister resign over Cook Strait debacle

Source: Maritime Union of New Zealand

Four unions representing maritime and rail workers have condemned the Government’s decision to effectively cancel the Cook Strait iRex ferry upgrade project, and are demanding the resignation of the Minister of Finance for the decision.

The four unions are the Maritime Union of New Zealand representing seafarers, the Rail and Maritime Transport Union representing rail workers, the New Zealand Merchant Service Guild representing ship’s masters and officers, and the Aviation and Marine Engineers Association representing marine engineers.

Maritime Union of New Zealand National Secretary Craig Harrison says it is not tenable that such a major decision with massive implications for the economy should be made in such a ‘fast and loose’ manner.

“This is far more than a fiscal decision – this decision shows poor judgement and a total lack of understanding of the importance of a functioning Cook Strait connection to New Zealand’s supply chain.”

He says the ongoing technical issues with Cook Strait ferries are a result of end of life vessels being used on a notoriously challenging crossing and had resulted in serious incidents in the last few years. 

“The can has been kicked down the road for years and the upgrade has to happen now.”

“This Government campaigned on getting our transport infrastructure sorted and their first move is to basically jeopardize the future of road and rail transport between the North and South Island.”

Rail and Maritime Transport Union General Secretary Todd Valster says the ferry upgrade project was an essential part of maintaining a ‘fit for purpose’ national transport system initiated by the previous Labour Government.

He says the new Government’s decision to dump the project was reckless and indicated an agenda to run down key parts of our transport infrastructure.

“The iRex project would deliver fit for purpose, modern vessels and terminals, that would provide reliability, resilience, low emissions and a safe service.”

Mr Valster says the iRex project would deliver a long term solution for the Cook Strait over decades, which justified the cost of the project.

He says the Minister of Finance and the Government had made an irresponsible decision that would cost millions to rectify by breaking contracts with overseas suppliers, and leave the Cook Strait connection with third rate, ageing infrastructure.