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  • rmacculloch

Who, with an ounce of business sense, pulls out of a deal with no idea of what legal claims will arise, and with no idea of the price of a replacement deal? PM Luxon and Finance Minister Willis.

The PM was elected on the basis that his previous career as CEO meant he had a much greater business acumen than Labour's leaders - that he knew the "Art of the Deal", as Donald Trump's famous book once described it. However, yesterday it was revealed by the accountant, Peter Reidy, who is the Chief Executive of KiwiRail, that the builder of the now cancelled new ferries, Hyundai Mipo Dockyard (HMD), in South Korea, has put in a claim stemming from the terminated $551 million contract, since the shipyard has already started work on them. When asked, it emerged that KiwRail don't know what will be the size of the claim that the NZ taxpayer will ultimately end up paying. “There's lots of complexity .. there are a number of elements of the claim. We’ve got .. legal experts, just going through the claim with us line by line - assessing what’s reasonable, what’s fair". Well, it's not up to Kiwi Rail's lawyers to decide what is "fair" - it depends on what HMD's lawyers also believe what is fair - and should the two not agree, it ultimately must be decided in court. Furthermore, the government cannot tell anyone what will be the cost of smaller, scaled-down ferries.


The crux of the matter is that finding out the cost of pulling out of the contract and the cost of replacement ferries over the next few months is irrelevant - the question is how could PM Luxon & Finance Minister Willis pull out of a billion dollar deal with no idea of the legal consequences? With no idea of the costs of the claims that will arise? With no idea of the price of a replacement deal? PM Luxon talks a big game but has he ever done a three billion dollar deal before? No. Has he ever pulled out of a billion dollar deal before? No. Elon Musk tried pulling out of a multi-billion dollar deal to buy Twitter. It was a nightmare - so costly that he ended up going ahead with it. If Luxon and Willis don't smarten up and prove they know how to do deals - show they know how to break-up the cartels running NZ - headed by folks the PM calls "A-listers", yet are the primary reason behind our high-cost-of-living - and show they know how to do a quality-enhancing health-care reform (rather than pretending abolishing the Māori Health Authority is a reform plan) then we will know in quick order that both are not the real deal. On present form, Luxon is looking like a watered down version of John Key, and Willis a watered down version of Bill English. Labour were so bad that anything is an improvement. But these two are so far looking like not much of one.

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