New Zealand Railway Minister Winston Peters confirmed on 14th that the New Zealand government had ordered the construction of two large ferries and handed over to China Shipyard Co., Ltd. to replace the previously cancelled iReX project built by South Korea's modern Taupo shipyard. According to the New Zealand Post, the previous Labour government-led iRex project was originally planned by South Korea's modern Taupo shipyard, but due to the rise in port infrastructure costs, the New Zealand government canceled the original contract in December 2023.

Simultaneous upgrading of construction

Over the years, replacing the aging inter-island ferries has been a political focus in New Zealand. According to the Australian media website The Conversation, the Cook Strait ferry that connects New Zealand¡¯s northern northern island failed again in July. Currently, the average age of the country¡¯s ferry fleet has reached 28 years, failure frequencies and ¡°streaks¡± have become normal. While traffic between the northern island is heavily dependent on ferries, shipbuilding is aging and maintenance costs are high, forcing authorities to look for new cross-island transport options.

According to New Zealand media, the two new 200-metre ferries, each with a capacity of 1,500 passengers and 2.4 kilometres of lane space (for trucks, cars and 40 railway carriages), are expected to be delivered to New Zealand in 2029.

With the commissioning of new ships, major infrastructure upgrade plans are advancing simultaneously. A new terminal and ferry connection bridge will be built at the Port of Picton on the South Island of New Zealand, while the existing terminal at the Port of Wellington on the North Island is also planned to be extended and expanded.

The details of the final agreement remain confidential at the moment, and Petersen said that further progress on the project will be announced in the course of the year.

Cost $671 million without building any ships

In response to transportation problems between the north and south islands, in 2020, New Zealand's state-owned railway company KiwiRail officially launched a cross-island system project called iReX, which aims to replace the aging inter-island ferry fleet with two large railway ferries. It also includes a major upgrade of port infrastructure in Wellington and Picton to accommodate the docking needs of new ships. After international bidding, KiwiRail finally selected South Korea's Hyundai Opo Shipyard as its shipbuilding partner.

But in December 2023, the contract was suspended by the new government on the grounds that the New Zealand Ministry of Finance warned that upgrades and expansion of ferries and required ports would result in cost overruns of New Zealand $3 billion. According to comprehensive New Zealand media reports, the project had a budget of 1.45 billion New Zealand dollars when it was approved in 2021, but the total cost soared to 4 billion New Zealand dollars. "The previous government signed an agreement to buy two large new ferries but did not fully consider the port infrastructure needed to support larger ships," said Finance Minister Nicola Willis. By the time the project was cancelled, its costs had "almost tripled."

In August this year, New Zealand¡¯s KiwiRail and South Korea¡¯s Modern Taipu Shipyard reached a settlement agreement on the cancellation of the iReX project, paying South Korea¡¯s companies $1.4 billion as a settlement for the cancellation of the project. This resulted in the total cost of the cancelled iReX ferry project reaching $6.7 billion, including $4.4 billion for land infrastructure construction, project management and shutdown costs, and a total of $2.2 billion for the modern Taipu Shipyard, which includes previous settlements and settlements.

The current government blamed the previous Labour government for the cost of the project being out of control, saying it could complete the project at a lower cost. Since then, Petersen has begun a global bidding, hoping to find a new builder to build two rail ferries by the end of March and put them in operation in 2029.

"Optimal Scheme"

Peters said in a press release that while two new ferry contracts to be delivered in 2029 have not yet been announced, negotiations with shipbuilders have progressed smoothly: ¡°We have re-controlled the cost of the project within the limits set for 2020 and that New Zealanders have always expected,¡± and said ¡°by canceling the iReX project, billions of dollars can be saved for taxpayers.¡±

New Zealand media are very concerned about the government¡¯s announcement of the project, especially in the context of the current global shipbuilding industry¡¯s intense volatility influenced by U.S. policies.

The Post that the U.S. government had previously imposed investment restrictions on China Shipyard Group Limited and its subsidiaries and demanded the U.S. capital to evacuate, but did not restrict trade with the ship's company. The report, citing data from the U.S. Think Tank's Center for Strategic and International Affairs Research, that China is currently the world's largest shipbuilder and shipbuilds more than the rest of the world combined.

"We want to strive for the best solution for New Zealand taxpayers," Peters said when announcing the news."GSI's professional capabilities, technical strength and production scale confirm our high degree of confidence in the pragmatic ferry renewal plan." At present, China's shipbuilding industry still has significant advantages on a global scale. The latest data from China Shipbuilding Association shows that in the first half of 2025, China's shipbuilding completions, new orders received, and hand-held orders accounted for 47.2%, 64% and 57.6% of the world's total in terms of revised total tons, ranking first in the world. The maritime industry media "Maritime Executive" website reported on the 13th that data from Clarkson Company in the United Kingdom showed that the global order backlog is close to 166 million revised gross tons, with China accounting for 61% of the global order volume, while South Korea accounting for 20%.