(Bloomberg) -- New Zealand’s government plans to buy two new ferries to traverse the Cook Strait between the North and South Islands, aiming to have them operating by 2029 when existing vessels reach the end of their life.
The expected cost of the project is commercially confidential until procurement and negotiations for the associated port infrastructure have been completed, Finance Minister Nicola Willis said Wednesday in Wellington. A decision on the final solution will be made in March.
A year ago, Willis scrapped a plan initiated under the previous government to buy two super-sized ferries and upgrade port facilities, citing a cost blowout to about NZ$3 billion ($1.7 billion). Since then, the existing vessels have been blighted by mechanical problems and on one occasion a ship ran aground near the South Island port of Picton after suffering a steering failure.
“This decision will ensure New Zealand has a safe, reliable and resilient service to move people and freight between the North and South Islands,” Willis said. “A funding envelope has been established and the costs are expected to be much less than would have been the case” under the previous project, she said.
Winston Peters, leader of junior coalition partner New Zealand First, has been named Minister for Rail to lead the procurement. He has invited the private sector to put forward alternative proposals for a ferry service over the next few months.
“The government is taking this additional step to ensure no good ideas are overlooked,” he said. “Any alternative proposals received will be assessed along with the results of the first stage of the procurement process in March.”
Willis said the new ferries will be medium-sized and may or may not be rail-enabled, which would allow freight wagons can be shunted directly on board. She said the government was unable to find suitable, second-hand vessels but is confident from meetings with various shipyards that the new vessels can be delivered on schedule.
Talks with ferry operator KiwiRail and port companies at Picton and capital city Wellington are continuing to ensure infrastructure suitable for the new ferries will be ready on time, she said.
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