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Speaker 1: You're listening to a podcast from News Talks'd be follow

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Speaker 1: this and our wide range of podcasts now on iHeartRadio.

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Speaker 2: To chat further about this, we're joined by Infrastructure New

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Speaker 2: Zealand CEO Nick leg at gett A. Nick, nice to

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Speaker 2: have you on the program.

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Speaker 3: Hi, how are you both very good?

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Speaker 2: So effectively, Nick, this is an announcement of an announcement,

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Speaker 2: isn't it. There's not much detail in this particular stand

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Speaker 2: up from the Finance minister. That's my reading what you're

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Speaker 2: reading about it?

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Speaker 3: Oh, look, it sets the it gives us a bit

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Speaker 3: more information. It sets the sort of the direction they're

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Speaker 3: going to how they're going to procure these ferries, and

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Speaker 3: they've asked that the private sector can put in bids

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Speaker 3: to that, and then obviously how they're going to structure

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Speaker 3: the approach. So they're going to get the ferries sorted

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Speaker 3: and then work on the port side infrastructure. And it

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Speaker 3: does look a lot cheaper than what was previously announced.

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Speaker 3: And I think also having Winston Peters's Minister of Rail,

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Speaker 3: has a good idea. He's passionate about rail, but he

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Speaker 3: also believes that you've got to get a bang for

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Speaker 3: your buck and so I think that's I think all

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Speaker 3: round we like what we hear because safeguards are the

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Speaker 3: service across the cock Strait. It's got to be safe

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Speaker 3: and reliable. But we've also we also sent to forget

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Speaker 3: in these discussions that there is actually a private sector

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Speaker 3: provider in the form of blue Bridge, that's doing this

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Speaker 3: work every day. So we don't I think there's been

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Speaker 3: a lot of fuss made about this over the last year,

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Speaker 3: but actually what we've got to remember is that the

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Speaker 3: services has been delivered at the moment by the private sector.

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Speaker 3: Key we railer is obviously a key component to that.

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Speaker 3: But we want it to be done efficiently and we

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Speaker 3: want we don't want to spend we don't want to

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Speaker 3: write checks that the country can't cash, right, and that's

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Speaker 3: what this has been about.

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Speaker 4: So when she mentions a private sector you know possibilities.

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Speaker 4: Is she talking about an investment in the fairies or

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Speaker 4: is the government saying, in your opinion, that they're going

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Speaker 4: to buy the fairies and potentially look at someone operating them.

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Speaker 4: What did you take from that?

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Speaker 3: I didn't that level of detail wasn't there. What I

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Speaker 3: took to mean from it was that when they they

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Speaker 3: put together their proposal for the fairies they buy or build.

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Speaker 3: The private sector will be invited to put in what

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Speaker 3: they call an unsolicited bid, which which will mean that

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Speaker 3: they can't they can come forward and put a solution

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Speaker 3: on the table to this new entity that's going to

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Speaker 3: be responsible for that. I didn't get any sense that

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Speaker 3: there was a sort of a decision made about how

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Speaker 3: Kiwi Rail's future involvement is going to be. I thought

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Speaker 3: they might look at something where there was some government

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Speaker 3: ownership of Kiwi Rail and there might be some sort

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Speaker 3: of private sector ownership of an entity as well that

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Speaker 3: that delivered the service. But that, look, that might be

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Speaker 3: off the table, or it might be yet to come.

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Speaker 3: But I think those are the sort of the questions

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Speaker 3: that some of us are going to have in the

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Speaker 3: months ahead. But look, it's good to get this stair today.

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Speaker 3: I mean, people do want to know that the this

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Speaker 3: is a service that is going to be safeguarded. Thirty

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Speaker 3: billion dollars of goods a year goes across the Cook Strait.

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Speaker 3: It's the extension of you know, it's a bridge across

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Speaker 3: between the South and the North Islands, and you know

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Speaker 3: it keeps New Zealand fed. It keeps our exporters being

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Speaker 3: able to get their goods to market, and of course

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Speaker 3: it's great to tourism and just people movement. So I

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Speaker 3: think we've you know, I think today's a good step,

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Speaker 3: but we do need to see a little bit more detail.

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Speaker 3: And as I say, having Winston Peters as Minister of

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Speaker 3: Rail is good because we you know, rail is important

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Speaker 3: to our freight task. But there are some true believers

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Speaker 3: out there that think that it can do everything and

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Speaker 3: that we should just spend billions and we've we've got

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Speaker 3: to be more sensible than that.

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Speaker 2: These are going to be brand new fairies, Nick. And

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Speaker 2: there was concern when the i Rex project was canceled

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Speaker 2: that the second hand ferry market, they just don't exist

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Speaker 2: out there. There's no Toyota Corollas that are up for sale.

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Speaker 2: So building these two new fairies, is it your understanding

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Speaker 2: that it is relatively easy to find a ferry builder

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Speaker 2: a boat builder within the international space and get that

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Speaker 2: contract in place pretty quickly.

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Speaker 3: Well they did it with Irex right. The problem with Irax,

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Speaker 3: of course, was that they were very specialized because they

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Speaker 3: were rail roll on roll offs, you know, rail enabled,

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Speaker 3: and these new theories won't be that's where the massive

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Speaker 3: cost was not just for the boats, but actually also

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Speaker 3: for the for that port side infrastructure. And yeah, there

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Speaker 3: wasn't a hell of a lot of resilience in what

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Speaker 3: was proposed. Now I think that you know, there will

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Speaker 3: of course, there'll be a market they could find. I mean,

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Speaker 3: the challenge they will have is the same challenge that

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Speaker 3: New Zealand as a small country has with much of

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Speaker 3: its infrastructure and what it needs to get built. It's

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Speaker 3: you know, can they get a competitive price? And that

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Speaker 3: will be on people's minds, particularly given the fact that

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Speaker 3: the Irex project was canceled to costs. So I think

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Speaker 3: we'll be looking to make sure they're getting the best

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Speaker 3: thing for Keywi Rail and New Zealand's buck.

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Speaker 4: So rail freight capability as opposed to roll the trains on.

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Speaker 4: She was quite clear that she said it would have

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Speaker 4: rail freight capability. So is that that the trains come up,

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Speaker 4: you aren't you unload them, load them onto the onto

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Speaker 4: the ferry and then I unload them onto the trains

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Speaker 4: at the other end.

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Speaker 3: Yes, that's that's that's what That's what she means, and

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Speaker 3: it's what we've got at the moment, right so and look,

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Speaker 3: we were the only country in the world they're actually

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Speaker 3: building rail enabled ferries, so it's not something that you know,

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Speaker 3: is a particularly contemporary thing to be going for. So

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Speaker 3: and as I say, it added a lot of cost.

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Speaker 3: I mean it was going to cost. They estimated about

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Speaker 3: three billioned Man and the estimate I think I've seen

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Speaker 3: from David Seymour has said, you know, this is great

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Speaker 3: because we think it'll be about half that. So but

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Speaker 3: this is important, right, we don't need we don't need

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Speaker 3: the flesh's most sophisticated service. We do need something that

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Speaker 3: feature proof. So we we know that we've got some

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Speaker 3: you know, resilience in that in there and it's not

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Speaker 3: going to fail. And actually, you know, safety is really

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Speaker 3: important across the Crooks Straight as well, so we should

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Speaker 3: be looking for the safety part of this proposal, you know,

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Speaker 3: and ensure that that's covered at either end.

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Speaker 2: So the big blowout with the i REX project neck

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Speaker 2: was clearly on those landside operations, the infrastructure for these

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Speaker 2: new ferrari ferries that were planned. Have you got confidence

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Speaker 2: that under this plan that those infrastructure needs are not

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Speaker 2: going to be to the same extent as the previous project.

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Speaker 3: I would have confidence because they're not having to build

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Speaker 3: rail enablement. It's also important who pays, so you know,

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Speaker 3: like should keep e railvant forking out for infrastructure at

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Speaker 3: ports which the ports can charge for use and you know,

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Speaker 3: make money off. So I think it will be important

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Speaker 3: to see who's going to pay for the port side

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Speaker 3: infrastructure and how that's going to be brought around. Yeah,

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Speaker 3: I think lots of questions, and we've got to ensure

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Speaker 3: that this is an unpleased to hear your services is

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Speaker 3: going to keep running. The other thing i'd just say

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Speaker 3: about those rail enabled theories, what was the sort of

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Speaker 3: the thing that kind of went unreported was that the

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Speaker 3: first those ferries was going to turn up i think

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Speaker 3: next year, and there was going to be no port

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Speaker 3: side infrastructure ready for them. So I mean that would

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Speaker 3: have been horrific. I mean the lost the lost cost

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Speaker 3: and you know, the sunk cost and the lack of

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Speaker 3: productivity the projects would have eaten its head off. So

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Speaker 3: cancelation actually, when you think about that and you think

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Speaker 3: about this much lower cost we're actually going to end up,

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Speaker 3: I think you a head wellyed.

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Speaker 2: Nick, great to get your expertise. Thank you very much

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Speaker 2: for coming on.

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Speaker 3: Thanks both that.

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Speaker 2: Is Nick Legant Infrastructure New Zealand CEO.

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