Watch: Winston Peters to make ferry announcement

New Zealand Rail Minister Winston Peters is set to announce the government's plan for replacing the aging Interislander ferries, a project that has faced significant delays and cost overruns. The announcement, expected around 12:30 p.m., will detail the proposed portside infrastructure and operating model for the new vessels.

The journey to replace the ferries has been fraught with challenges. An earlier plan, funded by NZ First in coalition with Labour, envisioned two new ferries at a cost of about $500 million. However, escalating costs for necessary port improvements ballooned the project's budget to $3 billion by the time the government changed in 2023. The coalition government declined KiwiRail's request for additional funding to cover this blowout, leading to a stall in the procurement process.

Under the new coalition government, responsibility for the project shifted to Peters. The revised budget now stands at $1.87 billion, with taxpayers contributing $1.7 billion and the ports covering the remainder. Two new ferries are slated to be built in China, with deliveries expected by the end of the decade. While port upgrades are still necessary, they are planned to be more modest than initially conceived.