When National cancelled the iRex ferry contract out of the blue in a desperate effort to make short-term savings to pay for their landlord tax cuts, we knew there would be a cost. Not just one to society, in terms of shitter ferries later, but one to the government, which would eventually show up on its books. And now we know: $300 million:
New documents reveal the coalition has set aside $300 million to cover broken infrastructure contracts and a break-fee with Hyundai, after the government ended a contract with the Korean company to build two new Interislander ferries.And note that that's just what they've set aside, not necessarily what the actual cost will be. And on that front, there's this:The Cabinet paper was released by Treasury just half an hour after Finance Minister Nicola Willis had repeatedly refused to confirm that figure to reporters.
The broken contracts for associated infrastructure costs - for example, port upgrades - have been resolved, but the exact amount to be paid to Hyundai is still being negotiated.
The inside word from KiwiRail is that the original contract break cost was the entire $551m and the $300m now budgeted for is Hyundai offering a discount on the break fee *if* they win the new contract to build the reduced capacity/capability ships.Note that we'd be able to verify this, and hold both the government and KiwiRail to account for fucking this up so badly / agreeing to that contract, if KiwiRail had released the contract. But they refused. And you can see exactly why both parties have a very strong incentive to keep the details completely secret.
This is a complete fucking fiasco. We're going to pay a fucking fortune to get less than what we were going to, and later, just so National could make the books look marginally better in 2024/2025 and pretend to be "better economic managers". But this isn't "better economic management" - it's pure stupidity and waste. And we need to hold the government to account for it.
