The future of Cook Strait travel has been thrown into turmoil with the government's decision to decline KiwiRail's request for further $1.47 billion for two new mega ferries.
To date, $435.1 million of Crown funding has been assigned for the Inter-Island Resilient Connection (iReX) project of which about $63 million remains.
The fixed cost of the two ferries was $551 million, which Finance Minister Nicola Willis says makes up 21 percent of the total cost of the project.
KiwiRail requested an additional nearly $1.5 billion to address cost blowouts for landside infrastructure in Wellington and Picton.
Yesterday, Willis said the government would not pay up, and KiwiRail should go back to the drawing board.
KiwiRail CEO Peter Reidy told Morning Report one option could be to continue building the bespoke designed ferries and sell them.
Greater Wellington Regional Council chair Daran Ponter tells Kathryn Ryan he's unsurprised by the government's decision.