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.”