The Government has officially signed a contract for two new Cook Strait ferries to replace the ageing Interislander fleet.

The new rail-enabled ferries will come from Guangzhou Shipyard International, Rail Minister Winston Peters said.

“Two new ferries serving road and rail will enter Cook Strait service in 2029, thanks to a $596 million fixed price contract between Ferry Holdings and experienced shipbuilder Guangzhou Shipyard International.

“The total programme will cost less than $2 billion, with the taxpayer contribution coming in under the $1.7 billion allocated at the start of this year.

“Spending less than $1.7 billion means the taxpayer has saved $2.3 billion while still getting the ferries and infrastructure they want, because we have done away with the expensive consultants who hijacked the project by adding more and more infrastructure until Treasury warned the project would cost $4 billion.”

Peters said funding spent on infrastructure will be recovered over the life of the new Interislander ferries and infrastructure through port fees paid from Interislander revenue, and Interislander will be expected to build sufficient reserves to buy new ferries again in 30 years.

“We extend our thanks to the Ferry Holdings board and management team and the pragmatists at CentrePort, Port Marlborough and KiwiRail who heard the clarion call for fiscal discipline to secure the Strait,” he said.

“Ferry Holdings will be in the driving seat for the infrastructure, ably and contractually backed by CentrePort, Port Marlborough and KiwiRail, and accommodations will be made to minimise disruption to Interislander and Bluebridge.”