June 24, 2024 • 8 mins
The Finance Minister thinks New Zealand's existing supply of ferries can keep operating until 2029.
There's been debate about who's to blame for Friday's incident involving the Interislander's Aratere, after it spent 24 hours on the rocks.
Nicola Willis says the Government has plenty of time to replace the existing vessels.
"The Government is committed to ensuring we've got safe, reliable vessels - and we completely accept we want to replace the existing vessels."
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
And with us right now is the finance minister Nikola
will I say Nikola, Hi, Ever, so what's the plan
for the fairies? What are we going to do?
Speaker 2 (00:09):
Well? The plan is, first we have to ensure that
Kiwi Rail is maintaining its current feries well, because it's
always been the case that no new ships were due
to arrive until at least twenty twenty six, so there's
been an ongoing expectation that they maintain their existing fleet well.
The second piece is that it's clear that these are
(00:29):
aging vessels which will require replacement, and so we have
taken advice from an independent expert ministerial group about how
we should replace them. The good news is that group
has said to us, look, you've got some good options here.
You can get replacement ships, you can get them in
a timely manner before the end of life of these
(00:49):
current ships, and we're just working through as ministers the
best way to achieve that.
Speaker 1 (00:54):
Okay, So what are they saying there's some available on
the second hand market.
Speaker 2 (00:59):
Well, no, it's more likely that they would be procured you,
and there are some options for how we achieve that.
Speaker 1 (01:05):
What is the end of life? What do you consider
the end of life of the existing fairies.
Speaker 2 (01:09):
Well, I understand that the most recent advice that Kiwi
Rail has had of an independent assessment of the existing
theories is that those fairies can keep operating safely and
reliably until at least twenty twenty nine.
Speaker 1 (01:24):
Well, are you serious we're going to have to do
another five or six years with these things?
Speaker 2 (01:30):
Well, they need to be maintained, Well, they need to
be operated liically.
Speaker 1 (01:33):
You can't be comfortable with that. I mean, look at
what's happened to this fery. The fairy they couldn't even
steer it, and it's not even the first time that
they couldn't steer the ferry. The same thing happened earlier
as well. Do you really believe it's going to be okay?
And key We should be on board these things.
Speaker 2 (01:49):
The government is committed to ensuring that we've got safe,
reliable vessels, and we completely accept that we want to
replace the existing vessels and we've got time to do that.
And of course i'd like to see replacement ships ahead
of twenty twenty nine, there's no question about that.
Speaker 1 (02:04):
Because I mean, you're criticizing key We Rail for the
servicing that they just had the steering replaced.
Speaker 2 (02:11):
Well. K WE Rail are yet to explain exactly what
went wrong here and will await the explanation.
Speaker 1 (02:18):
But is it fair to criticize them for the maintenance
if they are maintaining there. What I'm trying to say,
is maintenance actually an issue here? Or is it the
thing is just so old even if you try to
maintain that you can't.
Speaker 2 (02:32):
Well, this is the point I'm making. An independent expert
has looked at the ships and said, actually, is it
safe and reliable to keep these things going? Is that possible?
And they're more expert than I am or you are,
and I've said, yes, it is. So I've got to
rely on independent experts here and their advice. None of
that stops the fact that k WE Rail also need
(02:55):
to make sure they're doing everything right in the way
that they operate those ships and maintain those ships. And
I think all of us accept that we prefer to
have new ships, so we're making sure we do that.
But you know what, we've got to do that sensibly
because the last proposal that was on the table, those
ships were so much bigger around forty meters longer, round
ten meters wider that they wouldn't have actually fit in
(03:18):
the existing verds at either port. There was a real
question about whether the ports could be fixed up in
time for their arrival. Then the harved master had concerns
about whether those ships would be maneuverable in the narrow
straits of the Tory Channel and coming into the Sound.
So to say that there was a magic answer on
the shelf, that's dreaming.
Speaker 1 (03:37):
Look, I agree that you made the right call in canceling,
and I just wonder if we should have got onto
ordering newer ones earlier. If you are to buy new ones,
has your expert group told you how much they're going
to cost?
Speaker 2 (03:50):
Our excerpt Our group has given us a range of costs.
But the key thing, of course is who we go
with the specification and ares a cabinet. We're working through
all of that and what's the range. Look, it varies, Heather,
and I don't want to throw a number out publicly
for the simple reason that this is incredibly commercially sensitive.
(04:12):
We are working with shipbuilders and I don't want to
precice any of those discussions.
Speaker 1 (04:17):
Is it going to be more expensive potentially than the
ones you just canceled, Well.
Speaker 2 (04:21):
I'll tell you what will be a heck of a
lot cheaper, and that is the cost of the infrastructure
required at port to take.
Speaker 1 (04:27):
But the boat itself could potentially be more expensive.
Speaker 2 (04:31):
Wellever, I say, I'm not going to give a number
on what we think the ships will cost until I've
had a proper tender process and I've looked at proper documents,
or until I've had a proper number from a shop shipbuilder.
So I don't think it would be a good idea
to play a guessing game with that number.
Speaker 1 (04:45):
Have we actually canceled the contract for the Big Fairies?
Speaker 2 (04:49):
We're in a negotiation process at the moment with HMD.
Who are the Korean builders who were contracted to build
the very large ship?
Speaker 1 (04:59):
What's that a negotia? If you want to cancel it,
just go to them and say cancel.
Speaker 2 (05:03):
Oh well, obviously these contracts are pretty complex and there's
a range of things to work through.
Speaker 1 (05:09):
The break fee right.
Speaker 2 (05:11):
Well, and also this question of whether or not HMD
would be appropriate to build smaller in future.
Speaker 1 (05:19):
How big is the break fee, Well, that will.
Speaker 2 (05:23):
Depend on the negotiations that are underway.
Speaker 1 (05:26):
Oh, I see, so it could potentially be smaller if
we keep them building the big ones, but go for
smaller ones as well. Like if we negotiate with them
for the next round that we want, it could bring
that break fee down.
Speaker 2 (05:36):
Yeah, these are all things that we're working through.
Speaker 1 (05:39):
Okay, how much money did you guys lose on that
failed ETS auction?
Speaker 2 (05:45):
Well, we didn't lose money as such. The point with
the emissions trading scheme is that it's a market. There
are a number of options each year, and like any
market price discovery occulse.
Speaker 1 (05:58):
Yeah, because I just noticed that there's normally but in
the past we've had a figure attached to it, but
not this time. Do you know how much it was
that that was lost in the auction?
Speaker 2 (06:07):
Look, I just get given repeatedly, very clear advice don't
start commenting on the auction in any detail because actually
you could compromise the effectiveness of that auction in future.
So I'm going to be really careful. There no fair enough.
I like to be candid in upfront, but that is
one thing I don't want to.
Speaker 1 (06:24):
Comp and I appreciate it. I understand that. I see
that there's some suggestion that maybe there are other industries
now who also want exemptions because forestry got an exemption
in farming got an exemption. Is that the case.
Speaker 2 (06:36):
Well, in the case of farming is a very good reason. A.
It's leading, so it's a different gas and we're actually
doing our work currently to look at what that means
in terms of the way it's treated and in the
case of forestry those that's providing a really good carbon sink.
So beyond that, we don't have any proposals to withdraw
(06:57):
anything from the eat us.
Speaker 1 (06:59):
Hey, Nicola, I'm asking you this because you're a Wellington
based MP and that's really the only kind of significance
of that. But if your council, Wellington City Council, does
the extraordinary thing of being unable to pass the long
term Plan on Thursday, which seems to be a live possibility,
do you think the government needs to step in here?
Speaker 2 (07:18):
Because that was the case, if the council couldn't pass
its own plan, I would be set up on behalf
of Wellingtonian because actually they just want for his local
body politicians to get on and govern a city which
actually has leaking water pipes and all sorts of challenges.
So at the point that the council decides it won't
(07:39):
pass its own plan. Well, it's really making it clear
that it's not up to the task and so then
the government will have to look at that and say
what next.
Speaker 1 (07:49):
So you would consider it.
Speaker 2 (07:53):
Well, I mean to me, it's almost unfathomable Heather, that
a council would not pass its own plan. And if
that happens, that will be a novel thing, and I
think that will be a matter for me and Brown
to consider. I would throw my hands up in despair
and I think that it would warrant quite serious action.
I think Wellingtonian's would be pretty fed out and at
(08:17):
that point something serious would have to happen.
Speaker 1 (08:19):
So I appreciate how carefully you're choosing your words. Then, Nichola,
thank you very much, really appreciate your time. That's Nichola Willis,
the Finance Minister. For more from Hither Duplessy Allen Drive,
listen live to news talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio.
And with us right now is the finance minister Nikola
will I say Nikola, Hi, Ever, so what's the plan
for the fairies? What are we going to do?
Speaker 2 (00:09):
Well? The plan is, first we have to ensure that
Kiwi Rail is maintaining its current feries well, because it's
always been the case that no new ships were due
to arrive until at least twenty twenty six, so there's
been an ongoing expectation that they maintain their existing fleet well.
The second piece is that it's clear that these are
(00:29):
aging vessels which will require replacement, and so we have
taken advice from an independent expert ministerial group about how
we should replace them. The good news is that group
has said to us, look, you've got some good options here.
You can get replacement ships, you can get them in
a timely manner before the end of life of these
(00:49):
current ships, and we're just working through as ministers the
best way to achieve that.
Speaker 1 (00:54):
Okay, So what are they saying there's some available on
the second hand market.
Speaker 2 (00:59):
Well, no, it's more likely that they would be procured you,
and there are some options for how we achieve that.
Speaker 1 (01:05):
What is the end of life? What do you consider
the end of life of the existing fairies.
Speaker 2 (01:09):
Well, I understand that the most recent advice that Kiwi
Rail has had of an independent assessment of the existing
theories is that those fairies can keep operating safely and
reliably until at least twenty twenty nine.
Speaker 1 (01:24):
Well, are you serious we're going to have to do
another five or six years with these things?
Speaker 2 (01:30):
Well, they need to be maintained, Well, they need to
be operated liically.
Speaker 1 (01:33):
You can't be comfortable with that. I mean, look at
what's happened to this fery. The fairy they couldn't even
steer it, and it's not even the first time that
they couldn't steer the ferry. The same thing happened earlier
as well. Do you really believe it's going to be okay?
And key We should be on board these things.
Speaker 2 (01:49):
The government is committed to ensuring that we've got safe,
reliable vessels, and we completely accept that we want to
replace the existing vessels and we've got time to do that.
And of course i'd like to see replacement ships ahead
of twenty twenty nine, there's no question about that.
Speaker 1 (02:04):
Because I mean, you're criticizing key We Rail for the
servicing that they just had the steering replaced.
Speaker 2 (02:11):
Well. K WE Rail are yet to explain exactly what
went wrong here and will await the explanation.
Speaker 1 (02:18):
But is it fair to criticize them for the maintenance
if they are maintaining there. What I'm trying to say,
is maintenance actually an issue here? Or is it the
thing is just so old even if you try to
maintain that you can't.
Speaker 2 (02:32):
Well, this is the point I'm making. An independent expert
has looked at the ships and said, actually, is it
safe and reliable to keep these things going? Is that possible?
And they're more expert than I am or you are,
and I've said, yes, it is. So I've got to
rely on independent experts here and their advice. None of
that stops the fact that k WE Rail also need
(02:55):
to make sure they're doing everything right in the way
that they operate those ships and maintain those ships. And
I think all of us accept that we prefer to
have new ships, so we're making sure we do that.
But you know what, we've got to do that sensibly
because the last proposal that was on the table, those
ships were so much bigger around forty meters longer, round
ten meters wider that they wouldn't have actually fit in
(03:18):
the existing verds at either port. There was a real
question about whether the ports could be fixed up in
time for their arrival. Then the harved master had concerns
about whether those ships would be maneuverable in the narrow
straits of the Tory Channel and coming into the Sound.
So to say that there was a magic answer on
the shelf, that's dreaming.
Speaker 1 (03:37):
Look, I agree that you made the right call in canceling,
and I just wonder if we should have got onto
ordering newer ones earlier. If you are to buy new ones,
has your expert group told you how much they're going
to cost?
Speaker 2 (03:50):
Our excerpt Our group has given us a range of costs.
But the key thing, of course is who we go
with the specification and ares a cabinet. We're working through
all of that and what's the range. Look, it varies, Heather,
and I don't want to throw a number out publicly
for the simple reason that this is incredibly commercially sensitive.
(04:12):
We are working with shipbuilders and I don't want to
precice any of those discussions.
Speaker 1 (04:17):
Is it going to be more expensive potentially than the
ones you just canceled, Well.
Speaker 2 (04:21):
I'll tell you what will be a heck of a
lot cheaper, and that is the cost of the infrastructure
required at port to take.
Speaker 1 (04:27):
But the boat itself could potentially be more expensive.
Speaker 2 (04:31):
Wellever, I say, I'm not going to give a number
on what we think the ships will cost until I've
had a proper tender process and I've looked at proper documents,
or until I've had a proper number from a shop shipbuilder.
So I don't think it would be a good idea
to play a guessing game with that number.
Speaker 1 (04:45):
Have we actually canceled the contract for the Big Fairies?
Speaker 2 (04:49):
We're in a negotiation process at the moment with HMD.
Who are the Korean builders who were contracted to build
the very large ship?
Speaker 1 (04:59):
What's that a negotia? If you want to cancel it,
just go to them and say cancel.
Speaker 2 (05:03):
Oh well, obviously these contracts are pretty complex and there's
a range of things to work through.
Speaker 1 (05:09):
The break fee right.
Speaker 2 (05:11):
Well, and also this question of whether or not HMD
would be appropriate to build smaller in future.
Speaker 1 (05:19):
How big is the break fee, Well, that will.
Speaker 2 (05:23):
Depend on the negotiations that are underway.
Speaker 1 (05:26):
Oh, I see, so it could potentially be smaller if
we keep them building the big ones, but go for
smaller ones as well. Like if we negotiate with them
for the next round that we want, it could bring
that break fee down.
Speaker 2 (05:36):
Yeah, these are all things that we're working through.
Speaker 1 (05:39):
Okay, how much money did you guys lose on that
failed ETS auction?
Speaker 2 (05:45):
Well, we didn't lose money as such. The point with
the emissions trading scheme is that it's a market. There
are a number of options each year, and like any
market price discovery occulse.
Speaker 1 (05:58):
Yeah, because I just noticed that there's normally but in
the past we've had a figure attached to it, but
not this time. Do you know how much it was
that that was lost in the auction?
Speaker 2 (06:07):
Look, I just get given repeatedly, very clear advice don't
start commenting on the auction in any detail because actually
you could compromise the effectiveness of that auction in future.
So I'm going to be really careful. There no fair enough.
I like to be candid in upfront, but that is
one thing I don't want to.
Speaker 1 (06:24):
Comp and I appreciate it. I understand that. I see
that there's some suggestion that maybe there are other industries
now who also want exemptions because forestry got an exemption
in farming got an exemption. Is that the case.
Speaker 2 (06:36):
Well, in the case of farming is a very good reason. A.
It's leading, so it's a different gas and we're actually
doing our work currently to look at what that means
in terms of the way it's treated and in the
case of forestry those that's providing a really good carbon sink.
So beyond that, we don't have any proposals to withdraw
(06:57):
anything from the eat us.
Speaker 1 (06:59):
Hey, Nicola, I'm asking you this because you're a Wellington
based MP and that's really the only kind of significance
of that. But if your council, Wellington City Council, does
the extraordinary thing of being unable to pass the long
term Plan on Thursday, which seems to be a live possibility,
do you think the government needs to step in here?
Speaker 2 (07:18):
Because that was the case, if the council couldn't pass
its own plan, I would be set up on behalf
of Wellingtonian because actually they just want for his local
body politicians to get on and govern a city which
actually has leaking water pipes and all sorts of challenges.
So at the point that the council decides it won't
(07:39):
pass its own plan. Well, it's really making it clear
that it's not up to the task and so then
the government will have to look at that and say
what next.
Speaker 1 (07:49):
So you would consider it.
Speaker 2 (07:53):
Well, I mean to me, it's almost unfathomable Heather, that
a council would not pass its own plan. And if
that happens, that will be a novel thing, and I
think that will be a matter for me and Brown
to consider. I would throw my hands up in despair
and I think that it would warrant quite serious action.
I think Wellingtonian's would be pretty fed out and at
(08:17):
that point something serious would have to happen.
Speaker 1 (08:19):
So I appreciate how carefully you're choosing your words. Then, Nichola,
thank you very much, really appreciate your time. That's Nichola Willis,
the Finance Minister. For more from Hither Duplessy Allen Drive,
listen live to news talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio.
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