Questions must be asked on why ferry project budget blew out – Kaikōura MP

Kaikōura National MP Stuart Smith says he is disappointed the Cook Strait ferry project will not go ahead, but questions have to be asked about how the project cost got "out of control".

Finance Minister Nicola Willis announced on Wednesday she had declined to provide $1.47 billion to continue the Inter-Island Resilient Connection (iReX) project.

Originally, when it was announced in 2020, the work was expected to cost under $1b. On Wednesday, Willis said the latest briefing indicated it would cost $3b.

Smith said there needed to be some serious questions asked about how the costs of the project got to this stage so quickly.

“We were really looking forward to a change in the ferries with lower emissions, and the much bigger and safer ferries, but the reality is the project just didn't stack up, and all of the costs just blew out quite quickly," Smith said.

"When you look at the timeline, the costs were out of control, and obviously it just wasn't sustainable.”

He said it was possible that land projects such as the Dublin St overbridge in Picton had not been considered closely enough in the costings.

“Yes, there's been inflation in construction and so on, but nowhere near in that order of magnitude. So it just doesn’t seem to add up,” he said.

He said questions about the cost of the project were being asked about a year ago.

“I had a word with some of my colleagues from our transport caucus who came down and we went up to Picton.

“We met with all the parties involved, and we were very concerned when we heard what was going on there.

“It was an air of inevitability about it, which is very sad.”

He said a solution still needed to be found.

In 2023, there had been a number of issues with the Interislander ferries. The Kaitaki lost power near Wellington in January, and a gearbox fault was discovered in March. The Aratere broke down and the Kaiarahi had an engineering issue in February. The Kaitaki had steering problems and storm damage in August.

And in November, both Bluebridge’s Connemara and the Kaiarahi hit wharves in Wellington, four days apart.

“We certainly cannot have that lack of reliability that we've had, that's got to be addressed,” Smith said.

But first, the project needed to be wound down, he said.

“I feel very sad and great sympathy for the people that have been caught up in this, through no fault of their own,” he said.

“I think we need to let the dust settle first ... a solution still has to be found and that's something that's being worked on.”

Marlborough mayor Nadine Taylor said on Wednesday the Government’s decision to pull the plug would be a shock to people in Picton.

Taylor said the port town had been “very engaged” in the Inter-Island Resilient Connection (iReX) project and had been a “great supporter of it”.

“A large number of workers had been expected to work on the iReX project over the coming years,” Taylor said.

“I would like to sit down with the new Government and talk through what the future looks like for our inter-island infrastructure.”

The council last year agreed to borrow up to $110 million on behalf of Port Marlborough, so the port could pay its share of the Waitohi Picton Ferry Precinct Redevelopment for the iRex project.

That money had not been spent yet.

To date, $400m had been spent by KiwiRail, of which 70% was for construction.

KiwiRail chairperson David McLean said the board was advised by the Government on Tuesday that it had decided not to provide further funding for the iReX project.

“Unfortunately, we cannot proceed without further government funding. We respect the Government’s role as shareholder and funder to make this decision.

“The board will now oversee the wind down of the project and review our plans for the Cook Strait connection.”

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