Plans to build a multi-use ferry terminal in Wellington are in jeopardy, following KiwiRail's insistence it wants to move into the central city beside rival Bluebridge, but won't share facilities with them.
An estimated billion-dollar investment for new wharves in both Wellington and Picton is needed to allow KiwiRail to switch its Interislander operation to two new larger rail ferries by 2024.
Two years ago, the Future Ports Forum, comprising representatives from the Greater Wellington Regional Council, the Wellington City Council, Centreport, the Transport Agency, KiwiRail, and Bluebridge was set up to look at where to best situate the capital's new Cook Strait ferry terminal.
It was agreed the new site would be shared by the Interislander, which KiwiRail owns, and rival Bluebridge.
The latest report from interested stakeholders, released in April this year, recommended Kaiwharawhara where the Interislander ferries currently dock.
Greater Wellington Regional Council (GWRC) chairperson Daran Ponter said KiwiRail left the forum before the final report was released because they did not agree with the location.
"Because they were on the working group they had an understanding of where that report was going to land in terms of its recommendation, they clearly didn't agree with Kaiwharawhara as the preferred recommendation and they pulled out in advance. Not helpful, but it's an interesting way of doing business."
KiwiRail chief executive Greg Miller denied leaving the forum, and said releasing the report did not make sense.
"What you are talking about is, 'did we agree in the forum?' and the fact is we didn't agree in the forum, so we'd said no we don't think that's the best outcome and we made that very clear," Miller said.
"Then you'd have to ask yourself, what was the benefit of the Future Ports Forum that couldn't agree, when the two customers - Bluebridge and KiwiRail - couldn't agree with the provider, that's more the point."
Miller said it was the geotech report that made KiwiRail stop and think.
"Is this the best location on the port to put new ferries and a new terminal that is rail served? There's also the motorway upgrade and the location on the port for future transport, which has always been a challenge at Kaiwharawhara, with road and rail location and for the passengers arriving from overseas and domestically, getting access to the Kaiwharawhara site," he said.
Estimates for building new ferry terminals in both Picton and Wellington are vague - ranging somewhere between half a billion and a billion dollars.
Miller said the huge costs of having to remediate the site could not be ignored.
"You can engineer your way out of many things, but what we're told by the engineers is that the cost of mitigation is extremely high, so there is a cost component to this that you cannot ignore."
KiwiRail prefers its new terminal to be at Kings Wharf, beside Bluebridge's existing spot, and closer to downtown Wellington.
But GWRC chairperson Daran Ponter said while KiwiRail had zeroed in on the seismic issues at Kaiwharawhara, Kings Wharf also had problems.
Ponter said the 2016 Kaikōura earthquake showed how fragile the port was. The port received more than $600 million - the second biggest insurance payout in New Zealand's history - for the damage suffered in that quake.
"Kings Wharf sits midway between the container terminal and the new BNZ centre, both of which were taken out in the November 2016 Kaikōura earthquake. So it would appear wherever you locate yourself around the Centreport site, you are potentially still open to being challenged by an earthquake."
And documents suggest the lengths KiwiRail is prepared to go to get the site. An email seen by RNZ from their group general counsel, Jonathan Earl, to KiwRail managers in May raised the possibility of using the Public Works Act to secure it.
Ponter said that would be unprecedented and would effectively mean seizing land from regional ratepayers.
"Clearly KiwiRail are an acquiring authority under the Public Works Act, but Centreport itself is a public works. Because you can't just use the Public Works Act because you like an option more than you like another. You've got to give good grounds for the option or for your preference."
Miller denied that was an option they were pursuing.
"Well the Public Works Act is there to be used to acquire if we need to, and as I said to you we haven't put in any time, effort into that because I do believe the relationship commercially long term is better to be resolved that way and that's the way we're going."
Centreport is now preparing a third assessment report for a new site, but Miller said he was not keen to share a facility with Bluebridge at Kings Wharf because KiwiRail needed a single-use terminal.
"We needed a rail link span. We have far greater volumes of trucks and cars and passengers that we move, so we probably needed a greater area and how do you divvy up the cost in a single user terminal for that with a competitor?"
Ponter said regardless of KiwiRail's preferences, ultimately the port company had to accommodate both operators.
In a statement, Bluebridge said it was aware of KiwiRail's recent proposal to build another wharf adjacent to its site at Kings Wharf, and had provided feedback.
The report is due in the next two months.
In June, the State Owned Enterprises Minister Winston Peters told regional councils he wanted the forum to reconvene and find a solution.