Kerre Woodham: Why do we struggle to run the Cook Strait ferry crossing?

I don't know who these people or these organisations would be and what on Earth their motivation might be, but it would appear that Treasury has identified several private operators who have expressed an interest in establishing a commercial competitor to Bluebridge with government help. Which basically means the opportunity to privatise the KiwiRail Cook Strait ferries.  

I don't know why you would do that, where in the world does any kind of public transport make money? I guess where there are profits to be made, Bluebridge has found them. But in a country this small, could two people, two organisations, two interested groups, make money out of the Cook Strait ferry crossing?  

Earlier this year, Winston Peters took a paper to cabinet, along with Finance Minister Nicola Willis and Transport Minister Chris Bishop, which confirmed a direction to Ferry Holdings —that's the publicly owned companies set up to procure two new Inter Island ferries— to consider options for ferry ownership and operation that will improve efficiency and recycle government capital. What does this mean? Translated into real world speak, that means the Government’s looking at letting private operators into owning and running the ferries that the government currently owns and runs, in the hope that efficiency will be improved, and recycling government capital means using private investors money, not taxpayers' money.  

All very well and good to open it up for expressions of interest, but what I found really staggering is that there are people who are interested in doing just that. As you may have heard on the Mike Hosking Breakfast, Deputy Prime Minister David Seymour is all for allowing private operators into running the ferries.  

“I have long had the philosophical view that government is not a good operator of commercial enterprises, and there's no shortage of evidence for that. But the reality will be much more persuasive to whoever's in government, you’ve got to balance the books, and at the moment we own too many underperforming assets. We are really struggling. As a result, the New Zealand people who fund the government as taxpayers are struggling, and there's going to have to be a reckoning. The alternative is people young and talented, keep looking further afield for opportunity and I don't want that.” 

No, none of us do. But is KiwiRail going to private operators going to be the Great Saviour? I wouldn't have thought so. It's been sold off before and it didn't work then. So he’s all for private operators coming in and running state owned assets more efficiently. Equally unsurprising is Winston Peters being against any form of privatisation. He makes the point that NZ First has consistently held the view that taxpayer funded assets should be owned by the taxpayer.  

As somebody who uses the ferries once in a blue moon, I wouldn’t have thought it difficult to have ships that are seaworthy, take people, and cars, and freight over the Cook Strait, and bring them back again. And you need people who can steer the ship, and you need people who can maintain the ships so that they don't break down in the middle of Cook Strait, because that's very bad. If there isn't enough money to be made commercially from doing this as an exercise, as taxpayers we have to fund it because it is State Highway 1. We need to keep it going.  

So why is it so hard to do that? Why is it so hard to have ships that are seaworthy, captains who can steer them, people who can maintain them? And either we know every year how much it's going to cost us to keep State Highway 1 open, which we have to do, or we allow private operators to run it and make small profit from it. Looking from the outside, I wouldn't have thought it was possible. Bluebridge has been able to do so, but is there room for another private operator? Clearly people think so, but why has it be

Episode Transcript

Speaker 1 (00:06):
You're listening to the Kerry Wood and Morning's podcast from
news Talks, he'd be I don't know.

Speaker 2 (00:13):
Who these people or these organizations would be and what
on earth their motivation might be, but it would appear
that Treasury has identified several private operators have expressed an
interest in establishing a commercial competitor to Blue Bridge with
government help, which basically means the opportunity to privatize the

(00:37):
Cockstraight Fairies, the Kiwi Rale Cookstraight Fairies. I don't know
why you would do that. Where in the world does
any kind of public transport make money. I guess where
there are profits to be made. Blue Bridge has found them.

(01:00):
But in a country the small could two people, two organizations,
two two interested groups make money out of the Cook
Straight Ferry Crossing. However, you know, I'm not an investor.
I know very little about the fairies other than sometimes

(01:22):
they stop and that they've had a troubled history. Earlier
this year, Winston Peters took a paper to Cabinet along
with Finance Minister Nichola Willison Transport Minister Chris Bishop, which
confirmed a direction to Ferry Holdings. It's the publicly owned
company set up to procure two new inter island ferries,

(01:44):
to consider options for ferry ownership and operation that will
improve efficiency and recycle government capital care What does this mean?
Translated into real world speak, that means the government's looking
at letting private operators into owning and running the ferries
that the government currently owns and runs, and the hope

(02:05):
that if fiency will be improved, and recycling government capital
means using private investors' money, not taxpayers money. All very
well and good to open it up for expressions of interest,
but what I found really staggering is that there are

(02:26):
people who are interested in doing just that. As you
may have heard on the Microsking Breakfast this morning, Deputy
Prime Minister David Seymour is all for allowing private operators
into running the fairies.

Speaker 3 (02:41):
I have long had the philosophical view that government is
not a good operator of commercial enterprises, and there's no
shortage of evidence for that, but the reality will be
much more persuasive to whoever's in government. You've got to
balance the books, and at the moment we own too
many underperforming assets. We are really struggling as a result.

(03:03):
The New Zealand people who fund the government as taxpayer
are struggling and it's going to have to be a reckoning.
The alternative is people young and talented keep looking further
afield for opportunity. And I don't want that.

Speaker 2 (03:16):
No, none of us do. But as key we Rail,
going to private operator is going to be the great savior.
I wouldn't have thought. So it's been sold off before
it didn't work. Then David seem more sounded like he
was running up a hill, probably going for an early
morning jog. Healthy mind and healthy body and all that.
So he's all four private operators coming in and running

(03:38):
state owned assets more efficiently equally, unsurprising, as Winston Peter's
been dead against any form of privatization. He makes the
point that New Zealand First has consistently held the view
that taxpayer funded assets should be owned by the taxpayer
as somebody who just uses the fairies once in a

(03:58):
blue moon. It doesn't seem I wouldn't have thought that difficult.
Have ships that are sea worthy, take people and cars
and freight over the cook straight ferry and bring them
back again. And you need people who can steer the ship,

(04:19):
and you need people who can maintain the ships so
that they don't break down in the middle of cook
straight because that's very bad if there isn't enough money
to be made commercially from doing this as an exercise.
As taxpayers, we have to fund it because it is
State Highway One. We need to keep it going. So

(04:40):
why is it so hard to do that? Why is
it so hard to have ships that are sea worthy,
captains who can steer them, people who can maintain them.
And either we know every year how much it's going
to cost us to keep State Highway one open, which

(05:01):
we have to do.

Speaker 1 (05:03):
Or.

Speaker 2 (05:04):
We allow private operators to run it and make some
more profit from it. I you know, looking from the outside,
I wouldn't have thought it was possible. Bluebridge has been
able to do so as their room for another private operator. Well,
there are expressions of interest, clearly people think so. But
why has it been so troubled? It seems a relatively

(05:26):
simple organization. It's a bit like the lovely CEO from
Caring Order, who said, really an effect, the job is
quite simple. We build houses for people and we rent
them out.

Speaker 3 (05:39):
He said.

Speaker 2 (05:39):
It only got difficult when the previous administration wanted to
make it a more social enterprise and bring in mixed
model housing communities, and I, you know, I get that
that's a lovely idea, but if you drill down to
what the job is, it's actually quite simple. So why

(05:59):
have we struggled for decades to run a cook straight
ferry crossing?

Speaker 1 (06:06):
It?

Speaker 2 (06:07):
Really, from the outside, doesn't seem that difficult.

Speaker 1 (06:12):
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