KiwiRail has signed an agreement with Hyundai Mipo Dockyard to deliver two ships, for a price $150 million above funds set aside in the Budget.
The contract for the two new Cook Strait ferries has been awarded to South Korean shipyard Hyundai Mipo Dockyard.
A digital image of a new Interislander ferry to be built by Hyundai Mipo Dockyard. Photo: Supplied / KiwiRail
In December last year, KiwiRail signed a letter of intent with the dockyard to progress negotiations.
The operator now has signed an agreement with the shipyard to deliver the first ship in 2025 and the second in 2026, for $551 million.
The cost is $150 million more expensive than what was initially set aside in last year's Budget.
In a statement, KiwiRail chief executive Greg Miller said it was a momentous day that had been a long time in the making.
"The new ferries will ensure a safe and resilient rail and passenger service between the North and South Islands, which is a vital part of the economy and a key part of New Zealand's supply chain, transport and tourism infrastructure."
Interislander operates about 3800 ferry services a year, transporting about 850,000 passengers, 250,000 cars and billions of dollars worth of freight, and with significant growth predicted.
The two new ferries will replace KiwiRail's three ageing Interislander ferries, which are nearing the end of their lives.
It has been more than 20 years since New Zealand introduced a brand-new purpose-built ferry to its fleet.
KiwiRail officials and the Hyundai Mipo Dockyard team signed an agreement for two new Cook Strait ferries to be built in South Korea. Photo: Supplied / Mark Coote
Miller said the new ferries would reduce carbon emissions by 40 percent and would be able to carry double the number of passengers, and commercial and passenger vehicles compared with the current fleet.
The Aratere is currently the only rail-enabled ferry, carrying at most 27, 60ft equivalent wagons per sailing. KiwiRail said the new ships would be able to triple that capacity.
KiwiRail said the South Korean shipbuilder was the world's sixth-largest with decades of experience building ships, including HMNZS Aotearoa for the New Zealand Defence Force.
As part of a $1.45 billion package, KiwiRail is also progressing with plans to redevelop terminals on both sides of the Cook Strait, in Waitohi Picton and at Kaiwharawhara in Wellington.
That is nearly $500m more than was initially forecast by the Treasury.
KiwiRail initially fought against the proposed Wellington site, wanting the terminal to be closer to town, but this was rejected by the city, regional councils and all other harbour users.
Regional council chairperson Daran Ponter described the news of the contracts being awarded as a "very positive development".
"Work is now well underway for planning for new ferry terminal at Kaiwharawhara," Ponter said.
"The aspiration is to lodge Resource Consents for the ferry teriminal by the end of the year - likely to be fast-tracked under the Covid-19 fast-tracking legislation."
