Aratere to depart for drydock in Singapore
10 February 2014 10:10AM
Interislander’s Aratere ferry is due to depart Wellington for drydock repairs in Singapore tomorrow (Saturday 8 February). Following the break of Aratere’s propeller shaft on 5 November last year, the ship will be going to the Keppel Yard to have a new starboard shaft installed. While in drydock, the ship’s port shaft will be inspected and, if appropriate, also replaced.
“The work, which also includes a scheduled drydock, is expected to take four weeks (following Aratere’s arrival in Singapore around 28 February/ 1 March) and we are planning for the ship to be back in service in early May, provided no other work is required, which can sometimes occur through standard drydock inspections,” says KiwiRail Chief Executive, Jim Quinn.
Mr Quinn says the net impact of Aratere’s outage is estimated to be between $20 and $30 million – this includes lost passenger, rail freight and commercial vehicle revenue, increased freight costs for the work-arounds required to minimise the impact on customers, as well as charter costs for the interim replacement ship Stena Alegra. Of this, lost revenue is expected to be approximately $16.4 million and higher costs approximately $9.6 million, covering trailer hire, alternative shipping capacity, new ship leasing and delivery costs.
“The decision to charter Stena Alegra was made on the basis that Interislander needed to be able to offer capacity for our peak season when we make a large portion of our revenue. It is also crucial that we were able to restore certainty around bookings and maintain a service for our customers. Our analysis indicates that the revenue generated by having the Stena Alegra in service will be more than the cost incurred by the charter and it will protect us from the risk of long term revenue decline had we not been able to offer our customers an alternative,” Mr Quinn says.
“Obviously this disruption has had a major impact on our financial position and we have had discussions with Government to request a contingency fund to cover the estimated impact, to draw down from this financial year, should we need it. We are continuing to mitigate this through expenditure management right across the business.”
“It is important to note, as a stand-alone business, Interislander generates around $20 million each year and as a result would typically be able to support the level of funding required to cover this incident. However, Interislander is part of the KiwiRail group and as such this financial shortfall impacts the overall funding of the organisation.
“The disruption caused by Aratere being out of service has been unprecedented, and both Interislander and KiwiRail Freight have worked very hard to create alternative plans that minimised disruption to our customers as much as possible, including getting approval for Aratere to provide freight-only sailings in the busy period prior to Christmas, the implementation of road bridging to transfer rail freight on Kaitaki and the incredible effort that has gone into commissioning Stena Alegra and finding additional crew within such a short timeframe,” says Mr Quinn.
The investigation into the cause of the incident has yet to be concluded and will continue once the ship is in drydock.
Media Contact: Sophie Lee, Senior Communications Advisor, KiwiRail
(04) 498 3181 or (027) 435 9464 email@example.com