The Government is establishing a new company to procure two new ferries to ensure a safe, reliable and commercially viable ferry service, Finance Minister Nicola Willis says.

“This decision will ensure New Zealand has a safe, reliable and resilient service to move people and freight between the North and South Islands. 

“The ferries are expected to begin operation in 2029 as the existing ferries reach the end of their operating lives. 

“The expected cost of the project is commercially confidential until procurement and negotiations for the associated landside infrastructure have been completed,” Nicola Willis says.

“However, a funding envelope has been established and the costs are expected to be much less than would have been the case with Project iRex – even once break fees are included.” 

Minister for Rail Winston Peters says that to ensure the best possible solution is arrived at, the private sector is being invited to put forward alternative proposals for a ferry service during the first stage of the procurement process. 

“The Government is taking this additional step to ensure no good ideas are overlooked. The quadrupling of the cost of Project iRex from $775 million to more than $3 billion and possibly as much as $4 billion, is testament to what happens when a project is mismanaged.

“Any alternative proposals received will be assessed along with the results of the first stage of the procurement process in March, after which final decisions on next steps will be taken.

 “I encourage the business community to take advantage of this opportunity.”

Nicola Willis says the company being set up by the Government will have a dual mandate. 

“The first will be to undertake a procurement process for new ferries and report back to Ministers for final decisions. The second will be to support officials to work with ports, KiwiRail and other stakeholders to ensure landside development planning is sufficiently advanced for Cabinet to make final decisions on ferry procurement with confidence.

“One of the Government’s aims is to leverage existing infrastructure to the maximum extent possible.

“Whatever the preferred solution, rail freight will continue to be able to be transported between the North and South Islands.” 

The new limited liability company will be listed in Schedule 4A of the Public Finance Act 1989. 

Shareholding Ministers of the new company will be the Minister for Rail and the Ministers of Finance and Transport.