A Suite Of Politics: Why is Luxon so Clueless? Karen Chhour Recovers. And The Police Minister Is Warned.

Oh, and the Kiwirail Interislander Saga continues to continue.

Good afternoon -

There is often so much to cover, and too little time, so let’s trial a Short Long & Sharp. (It ended up being long)

This one covers:

• A. Kiwirail Interislander Saga Continues (Episode 2)

• B. Police warn Mark Mitchell people could die

• C. Banks come out swinging - urging RBNZ to cut OCR

• D. Karen Chhour recovers back to form

• E. Luxon doesn’t know what the law he is repealing does - video

• F. Luxon again spreads misinformation, regrettably, and again doubles down

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A. The Kiwirail Interislander Saga Continues (Part II)

The Maritime Union of New Zealand revealed that the government is bumping up against $1 billion for cancelling the Kiwirail ferries contract. That’s because cancellation fees may be as high as $500mn, on top of ~$500 mn in sunk costs. Previously cancellation fees were floated as ~$300mn, and it’s all still going through a “repudiation” process.

That means that although Kiwirail cancelled the contract - after Willis directed them to - the ship builder, Hyundai Mipo Dockyard, could still choose to enforce the contract or cancel. Cancelling the contract would entail paying a break fee for damages.

The bulk of sunk costs ($347m) was spent on terminals and the remainer for ferries “design, procurement, the initial deposit for the ships’ build, and funding costs for the ships’ loan facility" (Kiwirail’s Chief infrastructure officer, André Lovatt)

Remember though - even $1bn is not the final figure.