MPs row over Interislander ferries disaster as Parliament blame game begins

The Cook Strait is no stranger to shipping disasters, but it is rare for a ship to sink before ever having set sail.

Yet that is what happened on Wednesday afternoon when Finance Minister Nicola Willis refused KiwiRail’s request for more funding for its project to replace the Interislander ferries after costs blew out to roughly $3b.

The call doomed the project, although what KiwiRail will do next and what will happen to the ferries currently on order from South Korea is not yet clear.

The new Government has acted quickly to effectively kill the project and pin the blame on the former government, moving a ministerial statement in the House on Thursday to discuss the ferries – with speeches that so heavily blamed the former government it caused Speaker Gerry Brownlee to intervene and put ministers back on track.

The challenge for the new Government is that National’s partner, NZ First, was deeply involved in the ferry replacement project, having green-lit it when in government with Labour between 2017 and 2020.

NZ First leader Winston Peters was personally involved in the decision as state-owned enterprises minister, the portfolio responsible for KiwiRail.

Today, he tried to pin the blame on Labour, arguing the problem had gone off the rails when he left the government in 2020.

“As you know, when I left [being] in charge of that operation, things were under control, and the moment I left the whole thing blew out completely,” Peters said.

He would not answer questions about whether he tried to save the project as National moved to kill it. Peters and the rest of the Government are currently working on salvaging the Scott Base redevelopment in Antarctica, which is also facing massive cost pressures.

Labour MPs noted one of the causes of the blowouts, the need to significantly upgrade portside infrastructure, was known to Peters. They cited a press release from the 2020 Budget in which Peters announced “$400 million to help replace the Interislander ferries and associated portside infrastructure”.

Another cause of the cost blowout was the decision to opt for rail-enabled ferries, rather than the more conventional ferries used now.

Peters said this was not a mistake.

Willis pinned the cost blowouts on the previous government. Former finance minister Grant Robertson called on her to release the documents behind the decision, showing the work the former government did to keep costs under control.

She said there was a “pattern of cost escalation that occurred with [the] project” while Robertson was its key shareholder.

Robertson said KiwiRail told ministers in October 2022 the “worst-case scenario” would see the tagged contingency for the project blow out by $280m. However, the cost of the project blew out by another $1b just months later, taking its total cost to $2.6b.

Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.