dave February 25, 2019 No Comments

KiwiRail is buying two new, large, rail-enabled ferries to replace the current three-ship Interislander fleet. This is an investment in a future that is not only ours but also New Zealand’s.

Our ferries play a crucial role linking the north and south of the country but the Aratere, Kaiarahi and Kaitaki are all reaching the end of their useful lives.

Every year 800,000 passengers cross the strait on nearly 4000 sailings. The ferries also transport the equivalent of a queue of freight trucks 1200km long and a train with 500km of wagons carrying goods for supermarkets and commodities such as grain, gas, wood products and aluminium.

And as we saw when the Kaikoura earthquake struck just over two years ago, our ships are a lifeline for our vulnerable capital city and for the top of the South Island.

Our ferries are a vital set of sinews that connect the economic muscles of New Zealand.

There is huge interest in the future of our ferries and the decision on their replacements. That is understandable. Crossing the strait on the Interislander is part of many Kiwis’ childhood memories, and many are aware of the role they play in building stronger connections for New Zealand.

The ships are well-maintained and delivering great results – 99 per cent of our scheduled services operate as planned and 93 per cent arrive on or ahead of schedule. But they are ageing, and will reach the end of their useful lives around the middle of the next decade.

The decision on what to replace them with spans generations. Each ship is expected to cost upwards of $200 million, though this may change depending on the final specifications, and the ships are likely to remain in service until at least 2050.

The two big questions we had to answer were how many ships we should have, and whether or not they should be capable of carrying trains.

There are clear economic benefits in a two-ship fleet. Large ships – we expect the new ferries will be around 30 per cent larger than what we have now – have the capacity to cater for demand at peak periods, such as the holiday season. Two large ships will deliver what is required through the year at a lower cost than a three-ship fleet.

Crucially, having three ships instead of two would simply add to operating and capital expenditure without generating any additional revenue.

The reduction in fleet size will not affect capacity, with up to six return sailings possible each day.

Having two identical ships is also more efficient, allowing standardisation of all aspects of the operation, including terminal infrastructure, crew familiarisation and training, and a reduced spare parts inventory.

It also makes sense for KiwiRail to opt for rail-capable ferries as part of our commitment to grow rail freight in New Zealand. They will provide a seamless journey between the islands without the need to unload rail wagons on to road trailers for the trip across the strait, and then reload them on the other side.

Getting freight off the road and on to rail is not only good for KiwiRail, but also good for the country – carrying freight by rail results in 66 per cent fewer carbon emissions compared with heavy road freight, and also means fewer heavy trucks on the roads. That means safer roads, and lower spending on road maintenance.

Our next step is to begin the detailed work setting out what we require in the new ships and terminals then seeking expressions of interest from shipyards to provide the final costing for our detailed business case approval. All going well, the first of the new ferries will arrive around the end of 2023.

We’re confident the decision we’ve made is the right one for KiwiRail, and the right one for New Zealand.

• Todd Moyle is acting chief executive of KiwiRail.

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