Rail Minister Winston Peters confirmed that the taxpayer would be buying two roll-on roll-off road and rail ferries to sail between Picton and Wellington, and also funding upgrades to wharves at both ports to accommodate the dimensions of the new vessels.
The Cook Strait ferry service is a vital connection between New Zealand’s two major land masses. Quite apart from its economic significance, in a country where geography dictates that you cannot drive from one end of it to the other it offers a psychological connection between Te Waipounamu and Te-Ika-a Maui.
While there is a privately-owned company plying the waters of Cook Strait, Bluebridge could sail off into the sunset any time it liked.
Only having a state-owned and operated ferry service offers the guarantee that goods can be transported easily between north and south, and that people who prefer to, or who cannot afford, air travel, can traverse the islands.
In recent years, however, "guarantee" has been too strong a word for the performance of the KiwiRail ferries. Elderly and in need of regular maintenance, they have also endured a series of expensive and embarrassing breakdowns — most notably Aratere running aground in Picton harbour.
On that note, it is a slight concern that the government has only contracted to have two ferries built by Chinese firm Guangzhou Shipyard International — routine maintenance requirements, let alone any extraordinary events, dictate that occasionally only one ship will be available.
Presumably the expectation is that Bluebridge can pick up any slack, but that presumes that the firm will have the capacity available to do so.
Also, Cook Strait is a notoriously turbulent stretch of water and the craftsmanship of the shipwrights will need to be able to match what the elements can throw at their handiwork.
There also exists the real possibility that the first of the two vessels could arrive here as scheduled, in 2029, and the construction of the indispensable port infrastructure which it requires to operate may not be completed. This happened in Tasmania recently, so it is not a far-fetched notion.
A budgeted $531 million has been set aside for work at Picton and $325m at Wellington. Despite bullish comments from port executives that the work would be done on time, the contracts have not been signed yet and the timeframe to get the work completed will be tight.
Getting a ferry deal across the line is an achievement by Mr Peters, who was brought in as Rail Minister to find some ships after the previous government’s iRex project was scrapped as unaffordable by Finance Minister Nicola Willis.
However, some questions remain as to how much money this exercise has saved taxpayers.
Mr Peters was adamant yesterday that the total programme would cost less than $2b, with the government picking up $1.7b of that cost. That was compared to the iRex project budget, which had spiralled beyond $4b.
Labour insisted that those figures were sea mist; its ferries would, allegedly, have been bigger, better and cheaper, and it also claimed that the government had not factored in the expensive break fee cancelling the build of the iRex ferries had incurred.
Even if all those things are true — and the quality of either class of vessels is difficult to gauge — the new cost still looks like it will be less than the old, which in tight financial times is no mean feat.
Perhaps the most salient feature of the structuring of the ferry deal was hidden near the bottom of Mr Peters’ press release: the ferry operators will be expected to build reserves over the estimated 30-year lifespan of the vessels, so that there will be funds enough salted away to buy new ferries once they are required.
Having the capacity to avoid this whole saga of uncertainty all over again would be more than welcome.
The ferry service is too important to be left in limbo again some time in the future.
