This is the best summary of the inter-island ferry debate I have read. Well done. This government appears to treat the South Island as a "clip-on" rather than a fundamental part of our economy in NZ.
We should all be suspicious of anything Steven Joyce promotes. Remember he created MBIE. He also was the promoter of Transmission Gully, the PPE which was going to "save" NZ money and introduce the "efficiencies" which the silly government departments didn't understand. Go back and check how economic the outcomes were after his promoted programs were implemented. After 40 years of privatization failures why in the world do we give these theatricians any attention for their outdated views.
Garry I really applaud your comments! I agree Rail is the best all round solution and my vote is for promoting it forthwith! Every day that passes will see the costs rise! Let’s do it NOW?
When Project iReX was first approved it had a benefit-cost ratio of 4.1. Now that the terminal upgrade costs have increased the cost to some $3 billion the benefit-cost ratio is still positive - roughly 1.3 (extrapolating from the figures given in the 24 February 2023 Ministerial briefing). This would still put Project iRex as having a higher benefit-cost ratio than most, if not all, of the proposed extra Roads of National and Regional Significance.
It's an interesting history. My memory tells me in 1993 our Minister of Railways, Richard Prebble, sold our rails to a US company Wisconsin, with Michael Fay and David Richwhite, two Kiwi entrepreneurs, easing the sale. The shares went from $6 to $9 within a year after which F R reportedly pulled out. It was considered good business to buy an undervalued company, asset strip it, and sell it on. In 2003 when Australia's Toll Holdings took over, the shares were valued at $1.50.
Who runs infrastructure better, the state or the private sector? Increasingly, the old hands are saying we have never recovered from the loss of the Ministry of Works, the experienced engineers who built our hydro works and power lines. Roger Douglas may still believe he did he right thing in closing it, and Max Bradford too, ten years later. I wonder how many believe that his partial privatisation reduced our energy prices? If you have honest people with the good of the country as their goal, it matters little which system prevails.
As to the ferries, if our islands are to remain a united country, we need the best possible 'bridge' between them. And the innovators to probe the future; and successful Kiwis like Don Braid who put the country first, to listen to.
That maybe true, but it seems that some of the decisions made by private industry on public utilities have been quite questionable and we seems to be stumbling toward the same rabbit hole that has done us no favours in the recent past.
Bryce this is one of the best editorials I have read on the whole ferry saga. I have been so frustrated with the way the current government has simply canceled the irex project without exploring other ways to manage the costs. The cost of building mega ferries was negotiated at a very good price, and would have delivered a reliable interisland service for the next 30 years. They would have contributed to the economic growth of New Zealand, and would have been cheaper operate than current ferries. The port side infastructure does need upgrading particularly in Picton where warves date back to the 1930's -40's, and the loading ramps to the 1960's. They are old and crumbling. New Zealand needs rail enabled ferries as rail forms an important part of the nations transport network.
How funny things are when Winston Peters becomes the only person who could sort out this mess.
If labour had funded this then there would never have been this opportunity. Nicola Willis is not stupid re the decision that has been made. Kiwirail have shown their ineptitude in running rail and the ferries. Aratere didnt run aground because its an old ship, it ran aground because its new steering system failed. Reports into Kiwirail have shown they have underfunded their maintenance, this is the first rule in any business with moving or static plant, keep up with the maintenance. They are useless at building new stuff. Look at the Wairarapa Line rails were laid 5mm too close causing vibration and the rails needing to be ground thinner, defeating the purpose of buying all that steel.
How much freight actually runs on rail between the islands? Both islands have deep water ports so railing containers etc to get to ports is not an issue or use of the ferries.
Ive just been in Croatia, mobile coverage everywhere, great toll roads, electric power everywhere. Makes NZ look like a backwater we are fast becoming
Laying rails at a tighter gauge has been common practice for many many years.
Unfortunately for Kiwi Rail it has been underfunded for years thus decisions on how to spend the funds they get has to be done to maximise the benefits across the whole business. The Aratere had almost complete steering rebuild.
The question is will Willis' hubris and pride defeat commonsense.
Fortunately with school lunches and cancer drugs, we are seeing some small willingess on the part of the coalition to back away from bad decisions. They may be slow learners but at least they may be learning..
What is wrong is that this port infrastructure has not been regularly updated isn't it? The result of 40 years of failed neoliberal policies, isn't it?
Not at all, its 40 years of substandard politicians, politicians who have no vision, politicians who can't see past their own ideologies (all sides btw) and politicians who would rather blow the money on things that get them political capital rather than on whats needed. It also falls on cronyism appointments to boards rather than the right person for the job.
In terms of Auckland, that falls squarely on the council. In terms of the ferries thats on central government.
Labour and the left have always had a mystifying and romantic attachment to rail. And a matching antipathy to trucking.
The heavily unionized workforce of the railway and the maritime freight sectors is one reason, another is that rail requires a strong centralized management controlling what goes where and when. Labour Governments like that control.
Trucking is far more flexible and diverse, and more responsive to changing demand. It also has a long history of exploiting its drivers, which gets it offside with the Left.
If one looks at the freight demand problems, you'd have to ask why have ferries into Picton at all? The population and industrial center of the South Island is Christchurch. That is where the bulk of the freight goes so why not use coastal shipping into Lyttleton?
The right like trucking because it pushes freight costs and dangers onto other road users and because it exploits its drivers and profits private interests.
The middle ground is that rail is the more suitable for bulk transport on principal routes. And that needs a national rail network unified by rail-enabled ferries.
Rail ferries to Lyttelton seem advantageous, but probably only so if you closed the railway north of Christchurch.
Rail is very suitable for non-urgent bulk freight between the manned stations or destinations. It can't stop and drop off anywhere else along its very fixed route. It doesn't need to cross Cook Strait.
Trucking is a cut-throat commodity service industry, and that gets passed onto the drivers. Not sure anybody maakes big profits in tucking.
There is a substantial public subsidy to trucking businesses in terms of their no paying their fair share of the costs of providing and maintaining roads. Corporate welfare to donors to National and ACT.
Rail is 200 year old technology. Within a few years there will be non-driver electric trucks on our roads. We should be removing all trains and replacing rails with solid road beds to run trucks on this route and get them off our over-worked roading system. Currently containers need to be trucked to rail, railed, unloaded again and trucked to end point. Very inefficient.
Idiot. The rest of the world says otherwise. Most export containers are loaded on rail at source and unloaded at ports. Long-haul truckers have been subsided by the rest of the nation for decades, not helped by Kiwi Rail freight being run as an extension of Toll trucking operations.
Overseas with huge factories maybe. Here, where freight moves container at a time there is no railhead at factories. RUC should be higher to represent the damage (80 x cars) trucks do, and they should differentiate between main highways and secondary country roads being chopped apart by logging trucks. Details. Let's keep to principles.
Haven't you seen all of the trucks come out of the Auckland ports with cars on them?
You are incorrect, most containers are loaded onto trucks from the source and delivered to an inland port and then put on rail. Incoming containers with goods generally go on rail in AKL to an inland port and are then...put on a truck, often to a devanning site and then put on a truck again to be delivered to the customer.
Lets hear your great ideas on how we stop using trucks.
Given the cost of RUC being based on the capacity of the trucks I would disagree that trucks are subsidised by other motorists. EV's were, up until recently, subsidised by everyone else.
the mistake here was the mega ferries and the view that sea level rise of 1.5 m needed to be considered. Due to the size of the ferries the port side infrastructure needed to be much bigger to get people and vehicles on and off quickly. What is missing in this discussion is how much freight goes by truck and how much by rail. Was the scale of the ferries being built for more freight or less. The fact we have deep water ports in both islands means that import and export goods dont need to cross the strait to get on and off container ships.
The fiscal handgrenade is why this has happened. I cant believe that if national had said they were going to borrow another $3B to fund this project, which they did not know was unfunded by the previous govt, that all the "experts" and media would have supported this decision.
Kiwirail are a joke. They are unreliable have overseen multiple failures in infrastructure builds and poor maintenance practices. They are not the right entity to run any of this. A good example of their failings is the Wairarapa line rails being laid 5mm too close so the trains couldn't run faster without vibration. What was their answer grind the tracks thinner. What a pack of numpties
That's an excellent summary of the situation. Time for national to realise the mistake in cancelling the project and reinstate it. An efficient economy needs rail and road working together to get the best out of both modes. Derek
I'd contend that this was intentional on their part. This entire Govt's ethos is predicated on corporatisation of New Zealand - selling off Interislander for them was always on the cards.
This is why Willis cancelled it without a Plan B despite being informed by Kiwirail that our ferries would not last much longer than a few years.
Ever major policy they are implementing is about institutionalizing and making concrete 10-30 years plans of corporate donors.
I guess when the only tool you're willing to endorse is a hammer, to maintain credibility you have to present every issue as a nail. Even when experts, evidence, and history disagree.
This is the best summary of the inter-island ferry debate I have read. Well done. This government appears to treat the South Island as a "clip-on" rather than a fundamental part of our economy in NZ.
We should all be suspicious of anything Steven Joyce promotes. Remember he created MBIE. He also was the promoter of Transmission Gully, the PPE which was going to "save" NZ money and introduce the "efficiencies" which the silly government departments didn't understand. Go back and check how economic the outcomes were after his promoted programs were implemented. After 40 years of privatization failures why in the world do we give these theatricians any attention for their outdated views.
Garry I really applaud your comments! I agree Rail is the best all round solution and my vote is for promoting it forthwith! Every day that passes will see the costs rise! Let’s do it NOW?
My opinion - noted above - is this wasn't a mistake or treating the South Island as a "clip-on."
This was a fundamental part of their strategy to find a narrative to sell off our ferries.
The Katare grounding merely accelerated their plans.
Make no mistake - every major policy action or omission has been about making concrete the 10-30 year plans of corporate donors.
When Project iReX was first approved it had a benefit-cost ratio of 4.1. Now that the terminal upgrade costs have increased the cost to some $3 billion the benefit-cost ratio is still positive - roughly 1.3 (extrapolating from the figures given in the 24 February 2023 Ministerial briefing). This would still put Project iRex as having a higher benefit-cost ratio than most, if not all, of the proposed extra Roads of National and Regional Significance.
It's an interesting history. My memory tells me in 1993 our Minister of Railways, Richard Prebble, sold our rails to a US company Wisconsin, with Michael Fay and David Richwhite, two Kiwi entrepreneurs, easing the sale. The shares went from $6 to $9 within a year after which F R reportedly pulled out. It was considered good business to buy an undervalued company, asset strip it, and sell it on. In 2003 when Australia's Toll Holdings took over, the shares were valued at $1.50.
Who runs infrastructure better, the state or the private sector? Increasingly, the old hands are saying we have never recovered from the loss of the Ministry of Works, the experienced engineers who built our hydro works and power lines. Roger Douglas may still believe he did he right thing in closing it, and Max Bradford too, ten years later. I wonder how many believe that his partial privatisation reduced our energy prices? If you have honest people with the good of the country as their goal, it matters little which system prevails.
As to the ferries, if our islands are to remain a united country, we need the best possible 'bridge' between them. And the innovators to probe the future; and successful Kiwis like Don Braid who put the country first, to listen to.
Nostalgia is no basis for making infrastructure decisions.
That maybe true, but it seems that some of the decisions made by private industry on public utilities have been quite questionable and we seems to be stumbling toward the same rabbit hole that has done us no favours in the recent past.
$800 million and counting, to get 2nd hand Corollas in 5 years, for the price of Ferraris, a master class in household budgeting...
I'd prefer a better analogy. Ferraris are notoriously unreliable cars. Temperamental and expensive to maintain.
Bryce this is one of the best editorials I have read on the whole ferry saga. I have been so frustrated with the way the current government has simply canceled the irex project without exploring other ways to manage the costs. The cost of building mega ferries was negotiated at a very good price, and would have delivered a reliable interisland service for the next 30 years. They would have contributed to the economic growth of New Zealand, and would have been cheaper operate than current ferries. The port side infastructure does need upgrading particularly in Picton where warves date back to the 1930's -40's, and the loading ramps to the 1960's. They are old and crumbling. New Zealand needs rail enabled ferries as rail forms an important part of the nations transport network.
How funny things are when Winston Peters becomes the only person who could sort out this mess.
Well said.
Road trucking depends on cross-subsidy from other road users.
Less rail freight means more road freight with huge roading and road-death costs.
Without rail enabled ferries you have two separate unsustainable rail networks.
So you need rail-enabled ferries if you want a national rail system.
Rail-enabled ferries are a specialized product, so you cannot buy second hand.
So you need new ferries.
Port infrastructure needs renovation just as much as do the ferries themselves.
Best therefore to upgrade both ferries and infrastruture together.
If labour had funded this then there would never have been this opportunity. Nicola Willis is not stupid re the decision that has been made. Kiwirail have shown their ineptitude in running rail and the ferries. Aratere didnt run aground because its an old ship, it ran aground because its new steering system failed. Reports into Kiwirail have shown they have underfunded their maintenance, this is the first rule in any business with moving or static plant, keep up with the maintenance. They are useless at building new stuff. Look at the Wairarapa Line rails were laid 5mm too close causing vibration and the rails needing to be ground thinner, defeating the purpose of buying all that steel.
How much freight actually runs on rail between the islands? Both islands have deep water ports so railing containers etc to get to ports is not an issue or use of the ferries.
Ive just been in Croatia, mobile coverage everywhere, great toll roads, electric power everywhere. Makes NZ look like a backwater we are fast becoming
Laying rails at a tighter gauge has been common practice for many many years.
Unfortunately for Kiwi Rail it has been underfunded for years thus decisions on how to spend the funds they get has to be done to maximise the benefits across the whole business. The Aratere had almost complete steering rebuild.
Thanks, this all makes sense.
The question is will Willis' hubris and pride defeat commonsense.
Fortunately with school lunches and cancer drugs, we are seeing some small willingess on the part of the coalition to back away from bad decisions. They may be slow learners but at least they may be learning..
I agree that the rail spend at 3 billion was utterly ridiculous. It shows that they weren't given a scope to work to, nor a budget.
I too want rail enabled ferries but when it costs you four to five times the cost of the ferries for the infrastructure then something is wrong.
Unfortunately the last government was utterly hopeless at getting value for money and every government should be looking at exactly that.
What is wrong is that this port infrastructure has not been regularly updated isn't it? The result of 40 years of failed neoliberal policies, isn't it?
Not at all, its 40 years of substandard politicians, politicians who have no vision, politicians who can't see past their own ideologies (all sides btw) and politicians who would rather blow the money on things that get them political capital rather than on whats needed. It also falls on cronyism appointments to boards rather than the right person for the job.
In terms of Auckland, that falls squarely on the council. In terms of the ferries thats on central government.
Read the report!
Labour and the left have always had a mystifying and romantic attachment to rail. And a matching antipathy to trucking.
The heavily unionized workforce of the railway and the maritime freight sectors is one reason, another is that rail requires a strong centralized management controlling what goes where and when. Labour Governments like that control.
Trucking is far more flexible and diverse, and more responsive to changing demand. It also has a long history of exploiting its drivers, which gets it offside with the Left.
If one looks at the freight demand problems, you'd have to ask why have ferries into Picton at all? The population and industrial center of the South Island is Christchurch. That is where the bulk of the freight goes so why not use coastal shipping into Lyttleton?
The right like trucking because it pushes freight costs and dangers onto other road users and because it exploits its drivers and profits private interests.
The middle ground is that rail is the more suitable for bulk transport on principal routes. And that needs a national rail network unified by rail-enabled ferries.
Rail ferries to Lyttelton seem advantageous, but probably only so if you closed the railway north of Christchurch.
Rail is very suitable for non-urgent bulk freight between the manned stations or destinations. It can't stop and drop off anywhere else along its very fixed route. It doesn't need to cross Cook Strait.
Trucking is a cut-throat commodity service industry, and that gets passed onto the drivers. Not sure anybody maakes big profits in tucking.
There is a substantial public subsidy to trucking businesses in terms of their no paying their fair share of the costs of providing and maintaining roads. Corporate welfare to donors to National and ACT.
So determine what is the true cost of trucking to maintaining roads?
Calling it the 'fair' share is simply emotive.
Rail is 200 year old technology. Within a few years there will be non-driver electric trucks on our roads. We should be removing all trains and replacing rails with solid road beds to run trucks on this route and get them off our over-worked roading system. Currently containers need to be trucked to rail, railed, unloaded again and trucked to end point. Very inefficient.
Idiot. The rest of the world says otherwise. Most export containers are loaded on rail at source and unloaded at ports. Long-haul truckers have been subsided by the rest of the nation for decades, not helped by Kiwi Rail freight being run as an extension of Toll trucking operations.
Overseas with huge factories maybe. Here, where freight moves container at a time there is no railhead at factories. RUC should be higher to represent the damage (80 x cars) trucks do, and they should differentiate between main highways and secondary country roads being chopped apart by logging trucks. Details. Let's keep to principles.
Haven't you seen all of the trucks come out of the Auckland ports with cars on them?
You are incorrect, most containers are loaded onto trucks from the source and delivered to an inland port and then put on rail. Incoming containers with goods generally go on rail in AKL to an inland port and are then...put on a truck, often to a devanning site and then put on a truck again to be delivered to the customer.
Lets hear your great ideas on how we stop using trucks.
Given the cost of RUC being based on the capacity of the trucks I would disagree that trucks are subsidised by other motorists. EV's were, up until recently, subsidised by everyone else.
You can't argue against nostalgia.
the mistake here was the mega ferries and the view that sea level rise of 1.5 m needed to be considered. Due to the size of the ferries the port side infrastructure needed to be much bigger to get people and vehicles on and off quickly. What is missing in this discussion is how much freight goes by truck and how much by rail. Was the scale of the ferries being built for more freight or less. The fact we have deep water ports in both islands means that import and export goods dont need to cross the strait to get on and off container ships.
The fiscal handgrenade is why this has happened. I cant believe that if national had said they were going to borrow another $3B to fund this project, which they did not know was unfunded by the previous govt, that all the "experts" and media would have supported this decision.
Kiwirail are a joke. They are unreliable have overseen multiple failures in infrastructure builds and poor maintenance practices. They are not the right entity to run any of this. A good example of their failings is the Wairarapa line rails being laid 5mm too close so the trains couldn't run faster without vibration. What was their answer grind the tracks thinner. What a pack of numpties
That's an excellent summary of the situation. Time for national to realise the mistake in cancelling the project and reinstate it. An efficient economy needs rail and road working together to get the best out of both modes. Derek
I'd contend that this was intentional on their part. This entire Govt's ethos is predicated on corporatisation of New Zealand - selling off Interislander for them was always on the cards.
This is why Willis cancelled it without a Plan B despite being informed by Kiwirail that our ferries would not last much longer than a few years.
Ever major policy they are implementing is about institutionalizing and making concrete 10-30 years plans of corporate donors.
Thank you for the excellent editorial, Bryce.
I guess when the only tool you're willing to endorse is a hammer, to maintain credibility you have to present every issue as a nail. Even when experts, evidence, and history disagree.