Rt Hon Winston Peters
Minister for Rail
Hon Nicola Willis
Minister of Finance

KiwiRail and Hyundai Mipo Dockyard have reached a full and final settlement on the cancelled Project iReX ferries, KiwiRail confirmed today.

“The net $144 million final settlement payment is to cover the costs incurred by Hyundai and its global suppliers, and that is only fair as the decision to cancel Project iReX was never a reflection on Hyundai,” Mr Peters says.

“As $300 million was originally provisioned to cover the potential cost of exiting iReX commitments, including settling the contract with Hyundai, more funding is now available for other Government projects.

“Doomsayers said cancelling the contract would cost the taxpayer the full $551 million contract value, but these are some of the same people who accepted Project iReX ballooning from $1.45 billion when approved in 2021 to Treasury warning it was on course to $4 billion in 2023 thanks to eyes-bigger-than-their-mouths ambitions and absentee management. Even their criticisms blew out.

“So the factual final settlement is net $144 million, not:

• $300 million as reported by RNZ, who said that ‘may not be enough to cover all the costs.’
• $300 million as headlined by The Post.
• $1.16 billion as stated by Labour Transport Spokesperson Tangi Utikere.

“We have brought this project’s costs back to what we established in 2020 and New Zealanders always expected: building what is needed for road, rail and passengers, and keeping the rest so we save the taxpayer billions.

“Ferry Holdings’ engagements with shipbuilders are progressing well, and so is the work to deliver the infrastructure in Picton and Wellington,” Mr Peters says.

“The settlement with Hyundai ends yet another sorry chapter in the story of the previous government’s mismanagement of the Crown’s books,” Nicola Willis says.

“It signed up to purchase two big new ferries without giving sufficient consideration to the port infrastructure needed to support ships of a much bigger size.

“As a result, the cost of the project had almost quadrupled by the time Cabinet cancelled it in December 2023 and officials were worried about further cost escalations.

“No Government should be advised of billion-dollar blowouts in a major infrastructure programme upon being elected, as was the case after the 2023 general election.

“I am pleased that a more pragmatic solution is now in place that will ensure a safe, reliable Cook Strait service at an affordable price,” Ms Willis says.

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