A ferry compromise

We all recognise the need for safe, reliable ferries plying the Cook Strait between the North and South Islands carrying passengers and freight. But how to best achieve this is the subject of considerable debate.

The debate and speculation about the ferries has not been helped by the report on replacing the ferries by the Ministerial Advisory Group being hidden behind closed doors. The final decision will affect our nation for many decades to come. Openness, not secrecy, will lead to the best decision.

As National Party infrastructure minister Chris Bishop recently suggested, all parties need to work together on important long term infrastructure projects such as this. We see division within the coalition parties on this issue. But it is so crucial, all parties, whether in government or opposition, need to set ideology aside and work together for a solution.

Our Vision

The Future is Rail sees both passenger rail and rail freight playing a much greater role in the future to move goods and people quickly, efficiently and in a low emission manner, throughout New Zealand. Rather than being an old-fashioned technology of the past, we envisage modern trains, running along upgraded tracks, powered by renewable electricity, with freight moving through high productivity modern transport hubs such as Te Rapa and Bunnythorpe. Rail enabled ferries are an essential part of that network.

But this is not just our Vision. Mainfreight, a leading New Zealand-based global freight business, has called on the government to invest in modern rail enabled ferries arguing that ‘non-rail-enabled ships could mean longer, more expensive freight travel throughout New Zealand, putting further pressure on our pothole-riddled roads’

The IREX project as envisaged by KiwiRail

Back in 2020, and still on the KiwiRail website, is a statement setting out the ‘Next step for new generation Interislander ferries’.

“The new ships will strengthen and enhance the vital transport link between the North and South Islands and represent a once-in-a-generation opportunity to transform the Cook Strait crossing,” Group Chief Executive Greg Miller says. The ferries are extensions of State Highway 1 and the Main Trunk Line across Cook Strait, linking road and rail networks between the two islands.

Currently, Interislander operates a fleet of three ferries, moving some 800,000 passengers and up to $14 billion worth of road and rail freight between the North and South Islands each year.”

The report goes onto state:

“KiwiRail’s iReX Project was established to replace the existing three ship fleet with two new, large, rail-capable ships to be brought into service during 2024 and 2025.”

The new ferries will be nearly 40 metres longer and at least five metres wider than the current vessels, to meet the expected freight and passenger growth over the next 30 years.

The two ferries will be able to carry twice as many passengers as the current three ship fleet, 300 per cent more rail wagons and almost double the number of trucks and other vehicles."

Importantly, given the need to reduce New Zealand’s transport emissions quickly and dramatically, the report noted:

"The new ships will be much more fuel efficient and produce significantly lower CO2 emissions.

They will also be high tech, including the latest propulsion systems, and able to run on battery power at times. KiwiRail is also future proofing the design so new fuel sources can be adopted as they become available."

Also, critical given that the total cost of the project was heavily influenced by the need to upgrade the ferry terminals both in Wellington and Picton, involving making them capable of handling large earthquakes, the report noted:

“…the project also involves new infrastructure including terminals, linkspans, and marshalling yards which will create numerous Kiwi jobs in Picton and Wellington”

It is also noted that these two large ferries were to be built so that they could be adapted at short notice to be used at other port terminals in New Zealand (without rail connectivity linkspans at those other ports) such as Napier or Lyttleton in the event of a major disruptive earthquake at either Wellington or Picton or both. This was essentially part of the resilience factor of project IREX.

Cancelling the IREX project

As one of the first significant announcements of the new coalition government, finance minister Nicola Willis told KiwiRail their IREX ferries would not gain the extra funding needed to continue the project.

The argument for stopping the project has had many dimensions. Some were set out in the initial announcement to cease funding. Others have emerged since.

Arguments stated by various groups and individuals include:

1. That much of the costs for the project was on shoreside infrastructure. In Wellington the terminal rebuild was in a seismically active zone requiring expensive earthquake proofing. Currently, part of the Interislander terminal in Wellington operates out of a tent due to problems with existing buildings. In Picton, the existing terminal was demolished ahead of the proposed rebuild and currently operates out of a temporary terminal awaiting a decision about ferry replacements.

2. That there are very few rail capable ferries now operating around the world. As Micheal van Drogenbroek has clearly shown, one reason is that many have been replaced by tunnels or bridges (eg between Islands in Japan with rail, or between England and Europe) and secondly, it depends on how hard one looks. The use of non-rail capable ferries on a number of international routes that have been used as comparator examples where the rail capable ferries are not required are simply not relevant comparisons to the NZ situation. This is due to their being no interoperability on rail networks in those examples at either side of these ferry journeys, unlike there is in New Zealand, where these ferries run. Examples are. between mainland Australia and Tasmania or say between England and Ireland. In both these cases the rail networks at each end of the ferry journey have different track gauges between origin and destination ports and trains have never been carried between these ports by ferries. Van Drogenbroek shows examples where rail capable ferries are still used around the world where network interoperability exists, and they are being invested in. A link between USA and Mexico is one example, another is to be found in China. Michael van Drogenbroek, on LinkedIn, explores some other parts of the world where rail capable freight ferries still operate.

3. That the large ferries would add new safety challenges in using Tory Channel.

4. That with just two rail enabled ferries if one was out of action for various reasons, including planned maintenance, capacity would be significantly reduced. It is well noted that in the business case that this is a red herring as three return crossings can be done each day by one ship (normally when both ships are in action it would be two) if required as the ships and terminals were designed to have a one hour turn around for both loading and unloading at each terminal. So outside peak season the ships have significant surge capacity to take the projected loads when one ferry is out of action to be able to handle tonnage on offer. This in off itself adds significant surge capacity resilience and is part of the reason why the option of the two larger ships was the most resilient option compared to three smaller vessels that require a lot more handling.

5. That despite recently running aground, it has been stated the current rail enabled Aratere, with a better maintenance program, has more life left in it that at first suggested.

6. It is not only the Interislander that has had reliability problems. The private sector Bluebridge operation has also had potentially dangerous breakdowns.

7. That shifting freight from trains onto road-based trailers onto the ferry, then back onto trains at each end, is common all over the world and cost effective. This is disputed by many experts who say double handing is not only expensive but requires much larger marshalling yards than are possible in both Wellington and Picton. Not only is this approach much slower for rail-based freight, it requires more room for this activity to manage safety critical risks and is much more complex. It also erodes rail timeliness competitive advantage relative to road-based competition and essentially locks out a good portion of the contestable freight market to rail and is one reason why rails share of the freight market has declined over recent years. A good examination of the reasons why rail enabled ferries are important are explored by Michael van Drogenbroek on LinkedIn.

8. That having a non-rail enabled ferry link puts the entire South Island rail network at risk and potentially much of the north island network.

9. That without rail more freight needs to go on trucks. Mainfreight, a company that carries about one quarter of domestic freight, has stated that it will have to use about 5,700 more truck and trailer movements if the rail enabled ferries are cancelled.

10. If more freight is put on trucks there will be greater damage to roads, which is not fully paid for by the trucking industry. In addition, roads will become more dangerous and emissions will increase.

11. It is not yet clear that the contract to build the ferries has actually been cancelled. There has been much discussion about the monetary and wider reputational costs of cancelling the contract. It is possible a different set of ferries could be built within an altered contract.

12. That rail technologies are rapidly advancing, and this includes better more cost-effective ways of moving freight, including time sensitive products, by rail.

13. That without a strong rail freight sector, it will be impossible to bring back longer distance passenger rail.

14. Geopolitics, and the unintended and unforeseen consequences of actions, by decision-makers, taking a narrow viewpoint, as a basis for eliminating rail enabled ferries. This is discussed in a LinkedIn article by Michael van Drogenbroek.

A way forward

Based on advice from our own experts, insight from Mainfreight, as well as gauging public opinion through local community meetings, The Future is Rail suggests the following way forward.

• Through increased maintenance, ensure the safe ongoing use of existing Interislander ferries, especially the rail enabled Aratere, as long as possible.

• Re-negotiate the current contract with Hyundai to produce two new smaller, low emission, safe rail enabled ferries for delivery before 2030.

• Redesign the ferry terminals in Wellington and Picton to produce facilities that are both functional and of similar standard to that travellers through airports now expect. We need terminals we can be proud of.

• Invest more in rail freight to increase its mode share.

We have set up a petition calling for the government to continue to support rail enabled ferries linking our two main islands.