Published in Insights, The New Zealand Initiative’s newsletter, 24 January 2014
It was sad to see not one but two Interislander ferries docked in Wellington Harbour last weekend. But should that really make it a political issue?
After the Spanish-built Aratere ferry – nicknamed ‘El Lemon’ after a series of technical defects – had lost one of its propellers somewhere in the Cook Strait in early November, Interislander had brought in a replacement ferry, Stena Alegra, all the way from Poland. However, Stena Alegra seems to have inherited Aratere’s bad luck.
Five days after Stena Alegra had started operations, she suffered an engine failure in Wellington harbour. Once that had been fixed, she was prevented from departing for Picton the following day because the forecast 4 metre swells were too rough for a ferry that lacks stabilisers. According to John Riding from Marico Marine, an independent marine consultancy, Stena Alegra’s design did not make it an ideal ferry for conditions prevailing in the Cook Strait.
It does not quite seem ideal in any case. Interislander decided not to allow any foot passengers on Stena Alegra since they would have had to walk from the terminal and cross the vehicle decks to get on board.
None of these issues deterred the company from chartering her since a replacement for Aratere needed to be found urgently for the busy summer months.
With all this misfortune surrounding Interislander in recent months, there are only two beneficiaries. One is obvious: the rival Bluebridge ferries, operated by Strait Shipping. The other is the opposition parties: Interislander is a subsidiary of state-owned KiwiRail.
Labour’s transport spokesperson Darien Fenton questioned the competence of Interislander’s management while New Zealand First leader Winston Peters called KiwiRail’s ferry service “a farce” and deplored the waste of taxpayers’ money.
Though both Fenton and Peters may have a point, the real question is why the operational matters of a ferry company and the design and engineering of its vessels should be a political matter at all.
In any other market, operational problems and mismanagement would be taken care of by competition, boards and shareholders. Such normal commercial and governance pressures become muddied once politics gets in the way.
Maybe the question the opposition asks should not be whether taxpayers’ money has been squandered but whether taxpayers should be asked to underwrite the operations of a ferry company in the first place?
A privatised Interislander would face the pressures of the market without any obstacles or lifelines from politics. It would also spare us from politicians judging or prescribing what ought to be commercial decisions of Interislander’s management.
