Nicola Willis's Very Unserious Bungling of the Kiwirail Interislander Cancellation
A repetition of the saga's key unfoldings
Today, RNZ revealed that despite MFAT advice to Nicola Willis to be very “careful and deliberate” in her communications with the South Korean government, prior to any public announcement on cancelling Kiwirail’s i-Rex, they instead told South Korea 26 minutes before-hand
And by text no less!
That communication feels very unserious, and the approach is unbecoming for a senior NZ government Minister, and the National Party’s #2.
South Korea is New Zealand’s 6th largest trading partner, with $8.8bn of annual two-way trade. However, far more importantly, they are a significant strategic and security player in the region, and a relationship I would have thought New Zealand cared about. Especially at a time when Luxon claims our regional security is under threat and there is “no prosperity without security”.
‘Breaking up’ by text 26 minutes before telling the world of it is just not respectful, let alone quite clownish at that level of international diplomacy.
Hyundai Mipo Dockyard is one of the largest shipmakers in the world and delivers ~70 ships a year, having delivered for countries including France, US, UK, and Norway.
It had already built and were testing i-Rex’s hybrid engines by the time of the formal cancellation.
And as I’ve mentioned before - the new ferries would have accommodated 40 rail wagons, 3000 lane metres for vehicles, and 1800 passengers for the projected volume increases across the Straits.
As in all infrastructure programs, future proofing is essential. It is part of the cost-benefit consideration, as no country can afford to drop tens or hundreds millions of dollars regularly to upgrade capacity / operations / functionality.
Hyundai Mipo is now seeking cost recovery through a process called contract “repudiation” after the government forced Kiwirail to terminate its contract.
Bad faith contract termination is always going to open up parties to paying damages.
Now it’s also worth remembering that the i-Rex ferries would have been delivered in 2026 at a price of 40% less than market, and despite Luxon and Willis casting doubts on the 2026 timeline and suggesting their 2029 target would be better, there is no just evidence for their claims.
And the government seems intent on procuring non-rail ferries (with transport advocates only yesterday accusing the government of trying to kill off rail).
But not having rail enabled ferries would by itself add millions on to freight costs every year.
And who will pay for those higher business costs?
Kiwis of course.
Nicola Willis’s bungling is not only detrimental in immediate costs, but ongoing ones.
Another point to note is just how darn expensive this un-serious handling of the Interislander saga has been on the ships alone.
So far, it has cost Kiwis $1bn and counting for 0 ferries – at this stage we might even get to the amount that Willis claims was unsustainable for our health system after National deliberately underfunded the health budget.
Nicola Willis’s bungling is emblematic of the Coalition Government’s modus operandi to date:
Much of what they do seems to be excuses for their real agenda – and this is why the government almost without fail acts, irrespective of evidence or official advice. (The latest example is Karen Chhour ignoring Ministerial advice that told her establishing youth offender categories would not be prudent.)
Reward donors (mainly property developers, fossil fuel, fishing, tobacco, road contractors, global multinatonals) and move NZ towards privatisation
Their way of using “independent experts” also deserves heavy scrutiny.
Related Reading:
Knives Out for Kainga Ora - How Independent Experts are Weaponised by National
When this Government has $33bn to spend on roads over the next 3 years ($70bn over the next 10 years), $3bn on landlords, and a large portion of the $14bn tax cuts going to the well-to-do - yet claims $1.4bn more for Interislander i-Rex is too expensive, and $1.4bn for our health care is “unsustainable,” you’ve got to see that the writing was always on the wall.
Every day it gets more obvious though.
PS This made me laugh
I think we can all see that to National, and particularly to ACT, any money spent on the general (tax paying) public is "wasteful", while anything spent on private contractors or expensive and unneeded infrastructure is "prudent".
We’re going to lose more than we ever would have spent building them if they’d just given the go-ahead. And yeah, no way that these are going to get build by 2026, this iRex procurement was a 10 year process. If they can’t resurrect that contract, it’ll be 2032 at the earliest would be my bet (literally were a year on and we dont even have a replacement decided, it’ll take them two years just to do that).
The South Korea blunder is especially stupid because Luxon wants to convince us to move away from China because “it’s not a democracy” (apparently the last 100 years of politics and economics where non-democracies have traded with democracies to great benefit seems to have escaped him). Trying to shift our export market to wider asia like Japan and Korea instead of saying “nah she’ll be right, america will be our new trading buddy!” would have been 1) very mildly less racist and 2) makes much more geographic sense and is considerably more likely to be successful than actually getting a trade deal with the US, let alone a favourable one.
i’m glad they started off how they meant to continue but i really wish they hadn’t made labour so fucking scared of spending money with their talk/lies about how labour has overspent, the country is going break, and the economy is ruined (i mean it probably is now but back then it was doing a lot better. 🤔). If they’d approved the money before losing the election it would have averted a disaster. Of course they would have got punished for it and we never would have learnt this “lesson” (Do you feel educated? I don’t) and it would have confirmed to half the country that they can’t be trusted with money. But isn’t it strange that when National is pissing it up a wall, it’s all grand?
But I’m sure we’ll all Willis fondly when the cost of shipping doubles in a handful of years 🙃