quickymart:

 

...and typical.

 

So we're doing personal attacks on people who disagree with us now?

That wasn't my intention, but are you implying I'm not allowed to hold my own opinion?

I only expanded on why GV27 deflected instead of answering Michael's fairly straightforward question about the cancellation of the ferries - hardly what I'd call a personal attack. But if that's what you want to think I said or was implying, don't let me stand in your way.

As an aside, re the typical comment: one thing I have noticed is that when right-wing people - not specifically yourself or GV27, but in general - get asked questions that they don't like (this is moreso now in the age of Trump), deflection seems to often be the go-to/default response. But we're getting off-course (pardon the pun, this is about the ferries, after all) here.

Please feel free to quote me where I said you can't have your own opinion.

Casting me as right wing is pretty funny, it really couldn't be further from the truth. 

Help me out here, was Robertson being 'right wing' when he put Kiwirail on notice about unacceptable iRex cost escalations? I note no one engaging with this point, can I label this as proof of some vast left wing conspiracy? 

For the record, no I do not understand why the portside infrastructure could not be rejigged to be more reasonable but the fact there was questions about whether Kiwirail should be making these decisions in the first place suggests there wasn't much trust in them to deliver anything. At some point you're asking the same people who got you into a mess to get you out of it. 

Likewise, I'm not sure there's much mileage in labelling me 'right wing' if you're trying to make an accurate assessment but I do see the only two people in this thread who are presenting opinions that don't glaze the previous government and trash the current one by default being labelled as such. 

GV27:

 

Help me out here, was Robertson being 'right wing' when he put Kiwirail on notice about unacceptable iRex cost escalations? I note no one engaging with this point, can I label this as proof of some vast left wing conspiracy? 

 

I don't think anyone on this thread is really qualified to fully explain why the costs were blowing out. I doubt it was because the project managers decided to increase the supply of champagne and cocaine against the engineer's reasonable estimated requirements; whatever it was, was probably completely necessary and we still have to do it even though the ferries were cancelled. Last I heard, a lot of it was seismic work, which doesn't sound optional to me, and there were also a lot of complications with other projects in the area.

Personally I think that the whole procurement process - public and private - is broken by design because whatever words are worded about how we won't just accept the lowest bidder, we all know they're going to accept the lowest bidder. And so the the costs blow out because you do have to add back in everything you made 'optional' in the bid in order to be the lowest bidder.

That said, I still stand by my assertion that simply cancelling the boats already in the process of being built without spending even a second getting a handle on the situation was f***ing stupid. Because the old ferries are falling apart and we do still need a way to get freight to the South Island.

Now, we have to keep them running for years longer. We've already given up on one, and the government won't fund an ocean going tug to go pick them up when they break down either.

There almost certainly would have been a way to manage the port side infrastructure upgrades in such a way that it could have been managed from a cost perspective. The current plan uses "minimum viable and maximum reuse" to keep costs down. Why didn't they spend more time doing that before they cancelled the ferries? Hell, worst case scenario they could have let the boats be completed and then sold them off brand new without having to pay Hyundai a squillion dollars in penalties. But we'll never know, now, because Willis went off half-cocked to try to look tough.

We really haven't saved billions in taxpayer money at all. We're just going to spend it on opex now, rather than capex.

There definitely is a vast left wing conspiracy, though. I'm not supposed to talk about it, but you've figured it out already. ;-)

Just get one ferry to tow other ferry, and...

The Cook Straight is one of the most challenging seaways for a ferry anywhere in the world.

It was part of the rationale for larger ferry that can better handle this with least non sailing days and safety. 

Combined with capacity for our 'growing economy' that certain parties are supposed to be all about. 
The capacity to maintain lower costs with more efficient use of fuel and sailings.

Interisland trade efficiency supports many businesses in the country.
A farming group did raise its concern about the link.
We spent so much rebuilding better the links after Kaikoura earthquake.
So keeping capacity limited is a great idea.

Hopefully this hospital pass to build mini-ferries elsewhere will not be a repeat of problems NZ Rail had with engines being built there.

SaltyNZ:

 

GV27:

 

Help me out here, was Robertson being 'right wing' when he put Kiwirail on notice about unacceptable iRex cost escalations? I note no one engaging with this point, can I label this as proof of some vast left wing conspiracy? 

 

 

 

 

I don't think anyone on this thread is really qualified to fully explain why the costs were blowing out. I doubt it was because the project managers decided to increase the supply of champagne and cocaine against the engineer's reasonable estimated requirements; whatever it was, was probably completely necessary and we still have to do it even though the ferries were cancelled. Last I heard, a lot of it was seismic work, which doesn't sound optional to me, and there were also a lot of complications with other projects in the area.

 

The fundamental reason why the costs were blowing out was really quite straightforward. Kiwirail ordered the ferries prematurely without understanding the scope of the project. 

The simplest and easiest part of the project was procuring the ferries and once that was done it cascaded consequences through the project. From a cost perspective it’s not really a ferry project, it’s a terminal project with a couple of ferries on the side. 

Construction costs usually don’t work in a linear way. A 5% bigger building can be 2% more expensive or it can be 50% more expensive because of the constraints of the site and other factors.

Small decisions can have really significant consequences and if the driver for those decisions (eg the length or height of the ferry) can’t be changed you are locked in to having to pay. 

You couldn’t “fix” the landslide part of the project because it was a consequence of the ferries that were chosen. It was a fundamental flaw in the project. 

What seems most likely to me is Kiwirail had fixated on the ferries they chose and ignored the risks. They clearly got a sharp deal on the ferries themselves which justified the decision to themselves.

They failed to understand and control the risks to the project and the constant cost blow outs were a consequence of the decision they made. Treasury had flagged this risk at the time so this isn’t one of those things that is only apparent in hindsight. It was foreseeable. 

At that point you have two choices. You either persevere and hope the project cost doesn’t go truly exponential (which is what had been failing) or you stop and start again with a clean sheet of paper. 

Given Kiwirail had repeatedly come with their “final” and “worst case” scenarios it’s very clear the project was toxic and out of control. There was a very minimal chance they weren’t coming back for more money later on. Robertson made it very clear that there was no more money but they did it anyway. 

The project wasn’t getting better and starting again was a reasonable decision based on the evidence. 

https://www.rnz.co.nz/news/political/581998/finance-minister-must-take-responsibility-for-state-of-books-say-labour-taxpayer-union

Nicola Willis copping some flak on both sides due to not predicting a surplus until 2029-2030.

If National win next year, I wonder if she'll keep on blaming Labour?

Wow, Labour and the TPU. Marx and Reagan must both be spinning in their graves, in equal and opposite directions.

Handle9: The fundamental reason why the costs were blowing out was really quite straightforward. Kiwirail ordered the ferries prematurely without understanding the scope of the project. <snip>

What you’ve written is a classic gish gallop. Lots of plausible sounding points, but they rely on one flawed premise. That the ferries caused the blowout, therefore cancelling fixes the problem.

It doesn’t.

The cost blowout was overwhelmingly in the ports. Those port works were not a ferry mistake. They were long overdue seismic and resilience upgrades that any future solution still needs. That money was not “wasted”. It was an investment in infrastructure New Zealand will rely on for decades, regardless of ferry size.

Saying “start again with a clean sheet” ignores basic logic. The geography, seismic risk, and port constraints do not reset. Smaller ferries do not remove earthquakes, landslides, or safety standards. They just kick the real costs down the road while keeping unsafe, unreliable assets in service longer.

KiwiRail locking in ferries early was not recklessness. It secured a once in a generation deal at roughly 40 percent below market, future proofed for capacity, rail, and emissions. Cancelling that deal did not reduce risk. It crystallized losses, doubled maintenance costs on an ageing fleet, eliminated rail enabled ferries entirely, and left us paying more later for less capability.

If the original project was truly toxic, the replacement would be cheaper, faster, or better. It is none of those. That tells you the problem was not the ferries. It was political short termism dressed up as fiscal discipline.

This was not fixing a flawed project. It was abandoning long term infrastructure investment because the bill arrived in one term instead of being hidden across five...

It's amazing how people like yourself still attempt to defend a finance minister who clearly screwed up. It's OK to admit she was wrong in doing this instead of going on a full blown tangent.

Right. Now you’re accusing people who have a different view of arguing in bad faith. 

I can respect someone who has a differing point of view but I don’t respect someone who immediately jumps to accusing me of arguing in bad faith  

There’s very little point in continuing this discussion. 

Handle9: Right. Now you’re accusing people who have a different view of arguing in bad faith.

Calling something a gish gallop isn’t a judgement about motive, it’s a description of an argument structure. Multiple claims stacked together can make it hard to test the core assumption, which in this case is that cancelling the project reduced risk and cost...

That's not accusing you of arguing in bad faith. But also interesting how my original very simple question still goes unanswered?

michaelmurfy:

 

That's not accusing you of arguing in bad faith. But also interesting how my original very simple question still goes unanswered?

 

So this one was your original very simple question? 

michaelmurfy:
Can you all agree that sorting the real cost blowout which was the port side infrastructure would have been better than cancelling ferries at massive cost then making a deal with the Chinese?

While a large part of the cost blowout was the earthquake strengthening etc, the primary driving factor for the upgrade was the size of the ferries ordered. 

The ships were longer/larger and so were incompatible with current infrastructure - needed new/upgraded  logistics - bridges / ramps etc.
Those bridges/ramps were a large part of the cost. Working 'in the air' is expensive. 

By changing the ferries to smaller ones, my understanding is that it has removed a lot of the requirements for those sorts of upgrades.  But doing so required cancelling the original ferries. 

If you just look at the cost of purchasing the 'boats', then the costs are comparable - but we're getting less capable ferries.
If you consider the 'total cost of the project', the new one will be cheaper overall. 
Yes the original one would have delivered a better solution - but was it worth the extra investment?

Obviously the different parties emphasise the version that best benefits them. 

The point that handle9 was making was that the choice of ferries directly contributed to the costs of port infrastructure.  

And I think that indirectly answers your question.   Its not as simple as you made it out - the two were interlinked. 

Was it the right call?  Who knows? 

Personally I think the infrastructure investment of the bigger ferries would have been worth it.   NZ is forever kicking the can down the road and underinvesting in infrastructure.  
Chopping and changing all the time costs a lot.   Yes the costs blew out.  But regardless, we're going to need it at some point, and it will cost the same or more then - so we may as well suck it up and pay it now. 

https://www.stuff.co.nz/politics/360915794/new-poll-puts-labour-well-ahead-national-and-box-seat-form-government

This is only one poll, and the numbers change over time, but if the opposition being 8% ahead of the government doesn't get them a little concerned - especially if this trend continues, well...