Rail Minister Winston Peters. Photo: RNZ / Samuel Rillstone
The lower cost Cook Strait ferry plan is a matter of getting the right infrastructure, rather than less infrastructure, according to Rail Minister Winston Peters.
He told Morning Report the new Cook Strait ferries were better suited to the region they would be sailing.
On Wednesday, Peters lifted the lid on how the government plans to save cash on the ferries.
The project will see two new ships sail into New Zealand in 2029 with new port infrastructure.
When Finance Minister Nicola Willis pulled the plug on iReX, the previous government's mega ferry project, she said at the time costs had quadrupled since 2018 to $3 billion.
Willis stated the spiralling costs were largely due to the port side infrastructure in Wellington and Picton.
The iReX project included new terminal buildings on both sides of the Cook Strait, an upgraded rail yard in Wellington and significant flood protection work.
The new plan strips back those costs by reusing much of the existing infrastructure - with the taxpayer expected to pay less than $1.7 billion.
Peters told Morning Report under the new plan New Zealanders would get two new state-of-the-art-ferries with enormous capacity.
"They will be the latest state of the art with better thrust and better movement, more stability on the water, less damage to the shores of Marlborough for example.
"We're going to use as much of the original infrastructure that's been there for years and we're going to also duplicate most of the technology between Picton and the CentrePort Wellington, to ensure we keep those costs down."
Peters said under the previous iReX plan, New Zealand had been headed down the same path as Tasmania which had purchased two new ferries they could not use because they did not have the right infrastructure and the ferries had not been built the right way.
"We're [New Zealand] not getting less infrastructure, we're getting the right infrastructure by saving it and using it to the max. And we're getting ferries that are suitable for the Sounds, they're far more safe than the other options were."
Peters acknowledged the new ferries were smaller and $45 million more expensive than under the previous iReX plan.
"They're slightly more expensive because it's a new time and a new contract. However the other parts of the contract are massive savings and they'll be around for the next 30 years, they'll pay for themselves and they'll be also, because of the utility, highly saleable."
Speaking at a press conference on Wednesday, Peters said they were saving billions.
"In fact, we have saved the taxpayer $2.3 billion... one more time we have saved the taxpayer $2.3 billion."
That calculation was based on the iReX project blowing out to $4 billion, a figure he has said in the past Treasury warned the previous government it could cost.
Peters outlined the costs to Morning Report.
"It'll be under $2 billion, the cost to the taxpayer will be $1.7b, the ships are $596 million, for the Picton it's $531m, for Wellington or CentrePort it's $325m and there's a $415m for project management and contingency ... that's why my hard-nosed business men and women are confident about this."
Wellington Mayor and former cabinet minister Andrew Little said it was good they have been able to find a fix to the huge port costs.
"I think they have got a different solution on infrastructure; something had to happen because the infrastructure costs were going to be astronomical."
Marlborough Mayor Nadine Taylor said it provided direction for the community.
"We have been through the iReX iteration, now we are into the new project and today's announcement gives us that level of certainty."
She accepted that Picton would not get the new terminal pitched as part of iReX.
"I think that it is in line with the government's pragmatic reuse policy, and you know as a country we have to be sensible about these things."
Peters would travel to China next week with Ferry Holdings Limited to acknowledge the contracts with Guangzhou Shipyard International.
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