Labour’s rail obsession to blame for ferry fiasco

Steven Joyce writes:

he interisland ferry decision was the wrong one from the start. As Finance Minister in 2017, I clearly recall being advised that rail-enabled ferries would be a big, expensive mistake in this day and age. All over the world they were being retired, and virtually nobody was building new ones. The market had long since voted with its feet and we should too. Interestingly, at that time KiwiRail agreed.

The only fiscally responsible move was roll-on, roll-off ferries, which do a fine job of shifting freight and people between islands and continents all around the world. With most freight now in containers, getting it from shore to ship and ship to shore is simple and easy. In 2017, it made no sense for New Zealand to be the last country in the world to build ferries with train tracks on them.

However, the Ardern Government knew better, as they claimed in so many areas. One thing that united the new coalition partners was a nostalgic love for all things heavy rail. They swiftly sent the message to KiwiRail that they wanted rail-enabled ferries, and would pay for them. Never mind that four of the five current ships on the strait are not rail-enabled and have no need to be – it was time to go back to the future. The rest of the world was wrong.

So the Government effectively mandated that replacement ferries would have to cost so much.

It is absolutely no surprise that the cost has blown out from $775 million to $3b in just five years. And all this for an Interislander operation that had revenue of just $151m in the last financial year and a surplus of $12m.

That’s a stunning figure. The left are complaining that the new Government won’t spend $3b on an operation which has revenue of just 5% of that, and profit of 0.4% of the cost.