By Russell Palmer of RNZ
New Zealand officials notified their Korean counterparts they were scrapping the Interislander ferry project via text message less than an hour before the public announcement.
That’s despite the Ministry of Foreign Affairs and Trade (MFAT) earlier warning ministers that cautious talks with Korea would be required.
“Careful and deliberate communications with the Korean Government would be required in advance of any public announcement,” the Ministry said in a memo on December 8.
Asked for evidence of that communication under the Official Information Act, MFAT provided two text messages.
The decision to reject KiwiRail’s funding request had been made by Cabinet on December 11 last year. KiwiRail was informed the next day and it was publicly announced at 3.30pm on December 13. Ministers had been warned it would likely mean the end of the contract with Korean company HMD to build the large new rail-enabled ferries.
At 2.38pm (NZ time) on the 13th – less than an hour before Finance Minister Nicola Willis announced Cabinet’s decision to cancel additional funding for the project – New Zealand’s Ambassador to Korea Dawn Bennet texted Director-General for Asia and Pacific Affairs Seo Min-jung, a high-level Korean official.
“Good morning DG Seo. I hope you are well. I would like to give you a heads up about an announcement that will be made in NZ at 11.15 Korea time [3.15pm NZ Time]. Could I please give you a call in the next 15-20 minutes? Ambassador Bennet”.
The second much more fulsome message was sent 26 minutes later – and 26 minutes before the announcement – at 3.04pm.
“Hello again DG Seo. As I haven’t been able to reach you here is the information I was going to convey (in confidence):
– You may be aware that Kiwirail, a New Zealand transport company in which the NZ Government is a shareholder, has contracted Hyundai Mipo Dockyard to build two new ferries for passenger and cargo transport between New Zealand’s north and south islands.
– Kiwirail had requested significant additional funding from the government to address the cost escalations in their overall project to replace the interisland ferries.
– Yesterday the recently elected Coalition government declined that request for additional funding
– This is likely to have implications for the scope of the project by Kiwirail.
– What happens next is a matter for the Board of Kiwirail. We will keep in touch with you as decisions are made.
– Note that the government’s decision on funding is in no way a reflection on Hyundai Mipo Dockyard as the contracted shipbuilder.
– Only 21% of the escalated costs are associated with the replacement of the ferries. The bulk of the cost escalation related to upgrading harbourside infrastructure in the ports of Wellington and Picton to accommodate the new, larger, ferries.
– New Zealand continues to value our close relationship with the Republic of Korea, including our important trade and economic links.”
MFAT has refused to detail any responses from the Director-General under the Official Information Act, citing the need to protect international relations.
For clarity, RNZ repeatedly asked if there had been any other correspondence. MFAT said it had nothing further to add to its initial response provided in July:
“Discussions took place in Wellington and Seoul between New Zealand Ministry of Foreign Affairs officials and their respective counterparts on the afternoon of the announcement to provide advance notice of the New Zealand government’s decision.”
