KiwiRail and the government have confirmed the final settlement costs for breaking the contract with South Korean shipbuilders is $144 million, less than half the $300 million set aside for the expense.
It brings total project costs for the scrapped iReX ferry project to $671m. That includes $449m spent on landside infrastructure, project management and wind-down costs, and $222m total paid to Hyundai Mipo Dockyards, including for a previous deposit and the settlement.
In a statement, Minister for Rail Winston Peters said engagements with shipbuilders for new replacement ferries were progressing well, as was the remaining work on the ports.
"The net $144 million final settlement payment is to cover the costs incurred by Hyundai and its global suppliers, and that is only fair as the decision to cancel Project iReX was never a reflection on Hyundai," Peters said.
He has not yet announced a new shipbuilder contract for two new smaller ships to be delivered by 2029, but said engagements with shipbuilders were progressing well.
"We have brought this project's costs back to what we established in 2020 and New Zealanders always expected: building what is needed for road, rail and passengers, and keeping the rest so we save the taxpayer billions.
"Ferry Holdings' engagements with shipbuilders are progressing well, and so is the work to deliver the infrastructure in Picton and Wellington."
Finance Minister Nicola Willis said the settlement "ends yet another sorry chapter in the story of the previous government's mismanagement of the Crown's books".
The new ferries would deliver a "more pragmatic solution ... at an affordable price", she said.
KiwiRail's chief financial officer Jason Dale said the finalisation of the settlement costs meant the iReX ferry project was "officially concluded".
"KiwiRail remains focused on working with Ferry Holdings Limited and the port companies to deliver two new rail-enabled ferries and the required infrastructure upgrades in Wellington and Picton by 2029.
"We're looking forward to ensuring the safe and smooth transition of the new fleet into service for our people and customers when the time comes."
