10. Question No. 10—State Owned EnterprisesTANGI UTIKERE (Labour—Palmerston North) to the Minister for State Owned EnterprisesQuestion No. 10—State Owned Enterprises10. TANGI UTIKERE (Labour—Palmerston North) to the Minister for State Owned Enterprises: Can he guarantee that the Government's replacement ferries for the Cook Strait will be cheaper than those to be delivered in the cancelled iReX project; if not why not?Hon PAUL GOLDSMITH (Minister for State Owned Enterprises): While the Government has not made a formal decision around the purchase of new ferries as the Prime Minister has said The Government is absolutely committed to ensuring that we can get great new ships on the Cook Strait". And in doing so we definitely expect the total cost of any such project to be significantly less than the $3 billion which was the cost of Project iReX when it was cancelled by KiwiRail.Hon Dr Duncan Webb: Point of order. That question was about the cost of the ferries quite clearly not the cost of the overall project. The Minister's answer referred only to the overall cost of the project but not the ferries themselves.SPEAKER: That's true but the question—Rt Hon Winston Peters: Mr Speaker can I help here? Please.SPEAKER: Well look—I realise I'm fairly remedial in this job. Rt Hon Winston Peters: Look Mr Speaker he's a lawyer; he got—SPEAKER: Hang on I haven't called you.Rt Hon Winston Peters: The iReX project wasn't just for the ferries; it was for the other infrastructure and that's what he should have read in the first place.SPEAKER: Good OK. Look so I think the Minister's answer started with "There's been no formal Government decision". At that point it's hard to expect that there would be a further qualification inside the answer.Tangi Utikere: Has the cancellation of iReX specifically related to the ferry build part of the contract actually been actioned; if not why not?Hon PAUL GOLDSMITH: The contract has been repudiated and ongoing discussions are continuing around the exit cost of that. The ferries will not be coming because we're not going to spend $3 billion on an overall project.Tangi Utikere: Can he confirm that indicative costs associated with the wind-down and cancellation of the build to date will total more than the $551 million figure for the build locked in by the previous Government?Hon PAUL GOLDSMITH: No I cannot confirm that and I won't be making any comments about ongoing negotiation. The simple point is that it is a painful exercise we're going through and it is one of the very many financial bombs that this Government discovered on coming into office—that we had a project that went from $700 million to more than $3 billion and it was unaffordable and inappropriate and that's why this Government stopped that project.Tangi Utikere: Will the Government deliver new ferries by 2026 the date the new ferries were due to be operational; if not when can New Zealanders expect to be using new ferries?Hon PAUL GOLDSMITH: Well we're still considering options on replacement ferries and we have every expectation that we'll make progress well before the 2029 date that has been considered for the current ferries. And so what we're working through is dealing with a situation where we had a project that blew out unbelievably over the course of the past few years which the previous Government didn't manage and this Government is fixing up their mess.Hon Nicola Willis: Can the Minister confirm that even if the ships had arrived there were still very real questions about where they would berth as they were too large for the berths; and can he also confirm that the harbour master had questioned whether they could actually safely go through the Tory Channel?Hon PAUL GOLDSMITH: There were a wide range of issues with that project and the primary one was that because the ships were so much bigger than the current ships and were rail-enabled it required enormous costs to be put into the port's infrastructure. Now as those prices escalated the previous Government had many opportunities to deal with this matter. They didn't. They left it for this Government to deal with and we have.Tangi Utikere: Was the ministerial advisory group's initial advice upon their appointment to continue with the contracted iReX ferry build?Hon PAUL GOLDSMITH: The ministerial advisory group has given us plenty of advice and I'm not going to go into the details of that because we continue to have ongoing discussions about those issues.Tangi Utikere: Has KiwiRail warned the Government that due to reputational damage of breaking the contract it may not be able to procure new ships for decades and that it could also impact other Government ship procurements?Hon PAUL GOLDSMITH: Well we are having ongoing discussions around procuring new ships and I have not received any advice that it is impossible to get new ships. It's just a question of time and we're working our way through that process."