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Discussions about the Korean ferry cancellation were limited to two text messages sent within an hour of the announcement.

Discussions about the Korean ferry cancellation were limited to two text messages sent within an hour of the announcement.

A digital image of a new Interislander ferry to be built by Hyundai Mipo Dockyard.

A digital image of a new Interislander ferry to be built by Hyundai Mipo Dockyard.
Photo: Supplied / KiwiRail

New Zealand officials informed their Korean counterparts they were abandoning the Interislander ferry project via text message less than an hour before the public announcement.

This is despite earlier warnings from the Department of Foreign Affairs and Trade (MFAT) that cautious discussions with Korea would be necessary.

“Careful and deliberate communications with the Korean government will be necessary before any public announcement,” the ministry said in a Dec. 8 memo.

Asked to provide evidence of this communication under the Official Information Act, MFAT provided two text messages.

The decision to reject KiwiRail’s funding application was made by Cabinet on Monday 11 December, KiwiRail was informed on 12 December and it was announced publicly at 3.30pm on Wednesday 13 December. Ministers were warned that this would likely mean the end of the contract with Korean company HMD to build the new large rail ferries.

RNZ/Reece Baker

Nicolas Willis
Photo: RNZ / REECE BAKER

At 2:38 pm New Zealand time on the 13th, less than an hour before Finance Minister Nicola Willis announced the Cabinet’s decision to cancel additional funding for the project, New Zealand Ambassador to Korea Dawn Bennett sent a text message to Director-General for Asia and Pacific Affairs Seo Min-jung, a senior Korean official.

“Good morning, DG Seo. I hope you are well. I would like to inform you of an announcement that will be made in New Zealand at 11:15 a.m. Korea time (3:15 p.m. New Zealand time). Could I call you in the next 15 to 20 minutes? Ambassador Bennet.”

The second, much more comprehensive message was sent 26 minutes later – and 26 minutes before the announcement – at 3:04 p.m.

“Hello again DG Seo. Since I was unable to reach you, here is the information I was going to pass on to you (in complete confidentiality):

– You may be aware that Kiwirail, a New Zealand transport company in which the New Zealand government is a shareholder, has contracted Hyundai Mipo Dockyard to build two new ferries to transport passengers and goods between the North and South Islands of New Zealand.

– Kiwirail had asked the government for significant additional funding to meet the increasing costs of its comprehensive inter-island ferry replacement project.

– Yesterday, the newly elected coalition government rejected this request for additional funding.

– This will likely have implications for the scope of the Kiwirail project.

– The next steps are the responsibility of the Kiwirail Board of Directors. We will keep you informed as decisions are made.

– It should be noted that the government’s decision regarding funding in no way reflects the fact that Hyundai Mipo Dockyard is the contracted shipbuilder.

– Only 21% of the cost increase is related to ferry replacements. The majority of the cost increase is related to upgrading port infrastructure at the ports of Wellington and Picton to accommodate the new, larger ferries.

– New Zealand continues to value its close relationship with the Republic of Korea, including our important trade and economic ties.

The MFAT declined to detail the director-general’s responses under the Official Information Act, citing the need to protect international relations.

For clarity, RNZ repeatedly asked if there had been any further correspondence. MFAT said it had nothing to add to its initial response provided in July:

“Discussions took place in Wellington and Seoul between New Zealand Foreign Ministry officials and their respective counterparts on the afternoon of the announcement to provide advance notice of the New Zealand Government’s decision.”