Photo: RNZ / Angus Dreaver
Finance Minister Nicola Willis and Labour finance spokesperson Grant Robertson are each pointing the finger after the Cook Strait ferry project was cancelled.
Willis in Parliament on Thursday made a Ministerial Statement ahead of Question Time, having announced the day before she had rejected a bid from KiwiRail for further funding for the project to replace the Interislander ferries.
KiwiRail had requested a further $1.47 billion, part of which had been agreed to in principle by the previous government, to address cost escalations related to harbourside infrastructure in Wellington and Picton including to accommodate new larger ferries.
The two new ferries would mean double the passenger and vehicle capacity and triple rail capacity, while reducing the carbon footprint by about 40 percent - with emissions reductions increasing in future with battery capacity and cleaner fuel upgrades.
The project was set to deliver them by 2026, but construction had not yet started on those - and KiwiRail on Wednesday confirmed the project would have to go back to the drawing board.
Willis' statement in Parliament said refusing the funding had been a very difficult decision and the last thing they wanted to have to do but the costs had blown out and the project had "veered far away from its core purpose".
She said KiwiRail had told her in late November of further blowouts, bringing the costs to about $3b, and only 21 percent of that related to "the core project of replacing ageing ferries".
"It would be irresponsible for us to continue funding a project that has diverted so far in scope and cost from the original proposal."
Robertson, however, argued it was KiwiRail that was to blame for the blowouts, saying the previous government had rejected a bid for more funding this year and was advised of a much lower level of risk.
Labour's Grant Robertson Photo: RNZ / Angus Dreaver
He pointed to a timeline released by Willis the day before, which noted KiwiRail's assurance in October 2022 that "in a 'worst case scenario' the tagged contingency would need to increase by $280m".
He noted the February 2023 bid for a further $2.6b - also highlighted in the timeline Willis released - had in fact been rejected by the government at the time.
The government later made the smaller offer - cancelled by the new government - because "we did believe that it was important that New Zealanders did have confidence that there would be an ongoing sustainable Cook Strait ferry network".
"To clarify, the minister's statement says that the project veered away from its core purpose when it hadn't, the minister's statement also says that the costs had blown out to $2.6b under the government's watch when that money had not in fact been agreed.
He also argued the need to upgrade harbourside infrastructure had always been part of the plan, referring to a statement from Winston Peters - who at the time was part of government, in coalition with Labour - which hailed the jobs provided by "landside new terminal infrastructure including rail and vehicle marshalling yards".
"The core purpose of the project agreed by the Labour Party and the New Zealand First Party," Robertson said, "was for both the construction of new ferries and indeed portside infrastructure, as Mr Peters stated in his statement of the 27th of May 2020."
Unions had called for Willis' resignation over the cancellation of the extra funding, but she refused.
"No. If I was to resign there'd be 19 other Cabinet ministers behind me. This was a decision made by Cabinet, it was the right decision for New Zealand."
She promised to provide further updates about the future of the ferry crossing before Christmas, reassuring people the government would be "working to ensure we have ongoing safe reliable ferry services and that we'll make the investments needed to deal with that".
"We will be a government that builds and delivers infrastructure. I will note when it comes to the ferry project nothing had been delivered ... we're going to make sure the reset is better conceived, it provides better value for money."
The need for the new ferries has become more urgent after the Kaitaki lost power in Wellington harbour in January, drifting dangerously close to Red Rocks on the capital's south coast in rough evening conditions.
Another, the Kaiārahi, also sustained damage during berthing last month with a metre-long hole ripped in the hull above the water line.
KiwiRail had spent $400 million but construction had not yet started on the new ships, and it will now wind up spending on the project.
