The government has set aside $300 million to cover contract break-fees and infrastructure costs after cancelling Hyundai’s contract to build two new Interislander ferries, newly released documents reveal.
The Treasury papers, released today, confirm that while port upgrade contracts have been settled, negotiations with Hyundai are ongoing—meaning the final cost could exceed the $300 million contingency.
Finance Minister Nicola Willis had refused to confirm the figure earlier but later defended the budget allocation as “good budgeting practice.” Meanwhile, Rail Minister Winston Peters met with Hyundai in Seoul last week, confirming the company is back in the running to build the replacement ferries under a new, more cost-effective plan.
Labour leader Chris Hipkins criticised the government’s handling of the situation, calling it a “kneejerk decision” that has left taxpayers footing the bill without a clear replacement strategy.
A new global tender is underway, with the government aiming to select a builder for two smaller, rail-enabled ferries by the end of March, with a launch target of 2029.