A summary bullet point and synopsis on this story incorrectly said that the Government cancelled a previous $3 billion order with Hyundai due to cost blowouts. The order with Hyundai to build two new mega ferries was worth $551 million, while the overall infrastructure upgrades required in Picton and Wellington for these ferries pushed overall costs to more than $3b. A summary of a Media Council decision which upheld a complaint about this article can be found here.

By Corin Dann, RNZ

The giant Korean shipbuilder Hyundai could be back in the running to build two new Cook Strait ferries after a meeting between the company and Rail Minister Winston Peters in Seoul on Friday.

The Government last year cancelled an order with Hyundai to build two mega ferries, citing a $3 billion cost blowout associated with the ferries and the required port upgrades.

Peters, as the new Rail Minister, has since embarked on a worldwide tender to find by the end of Marcha builder for two cheaper and smaller rail-enabled ferries and have them running by 2029.

New Zealand Deputy Prime Minister Winston Peters meets South Korea's Foreign Minister Cho Tae Yul in Seoul. Photo / RNZ / Corin Dann

He said Hyundai was open to considering bidding to build the new smaller ferries and had indicated it could meet the size specifications involved.

“I’ve got a serious contender back in the ring of potential contenders for the tender for two replacement ferries for the Cook Strait.”

Peters, who is in South Korea for talks with the Korean Foreign Affairs Minister, said it made sense to also visit Hyundai given it was the world’s biggest shipbuilder.

It seems unlikely, however, the Government can escape a costly multimillion-dollar break fee that KiwiRail is believed to be in negotiation with Hyundai about after cancelling the mega-ferry deal signed in 2021.

When asked by RNZ what would happen to the break-fee negotiations should Hyundai build two new smaller ships, Peters said that was a decision made by the last Government and KiwiRail and has to play out separately.

When also asked why Hyundai wanted to bid again after being burned by New Zealand before, Peters said: “Hyundai understand the vagaries of politics as much as anybody else and we had a marvellous conversation”.