Why did Cabinet choose the MBL JV as the preferred supplier?
The McCallum Bros Limited and Nova Marine Carriers Joint Venture (MBL JV) was selected by Cabinet after the Ministry of Transport ran a competitive Request for Proposals (RfP) process alongside community consultation. The MBL JV’s proposal was one of three shortlisted proposals that were invited to Best and Final Offer (BaFO) negotiations with the Ministry (one of the tenderers later withdrew from the process). Cabinet considered the proposal alongside the other remaining option, additional information provided as part of the BaFO negotiations, and feedback from the community, to make its decision.
The MBL JV proposal was chosen because its proposed vessel and operating model was considered the best fit solution to provide long-term, reliable, and affordable shipping services for the Chatham Islands over the next 20 years. The MBL JV proposal offered the Crown the best value for money and lowest risk outcome.
The agreement will provide grant funding to the MBL JV, on the condition that the MBL JV uses that funding to procure a suitable vessel and provides shipping services to transport fuel, livestock, machinery and general goods between mainland New Zealand and the Chatham Islands. The agreement will include a number of specific conditions that the MBL JV will need to meet in providing the shipping services.
How was the feedback from the community taken into account?
The Ministry consulted with the Chatham Islands community in July 2025 on the three shortlisted proposals. This consultation asked the community about their priorities for key aspects of the new service, including affordability, reliability, frequency, capacity, and ownership. The Ministry also asked the community for its feedback on summaries of all three shortlisted proposals. Almost 50 submissions were received.
The community’s feedback was mixed, with no clear consensus on the preferred supplier. Affordability and reliability wererated as the most important aspects of the service.
What is the capacity of the ship?
The MBL JV’s proposed new vessel will have enough capacity to meet demand for livestock, fuel, and general cargo:
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Livestock: the ship will be able to carry about 5,000 stock units per voyage
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Fuel: 300,000 litres of diesel in bulk tanks and petrol in ISO containers (on deck, each would hold 10–20,000 litres)
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General cargo: 81 Twenty-foot Equivalent Units (TEU), including 10 reefer containers.
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Roll-On Roll Off capabilities via a 5m wide side ramp, compatible with Waitangi Wharf and New Zealand ports.
We estimate that the new vessel will be able to move up to 70,000 stock units per year, based on the minimum contracted number of sailings.
How long will it take to build? When will it arrive?
The new vessel will take around 21 months to build and sail to New Zealand. It will also require some time to go through compliance checks with Maritime NZ. The exact timing will be confirmed as the build progresses but at this stage, we expect it to commence services to the Chatham Islands in the second half of 2027.
How often will the ship serve the Chatham Islands? What about Pitt Island?
The MBL JV will need to meet certain performance standards as a condition of receiving the funding. The MBL JV will be required to make at least 14 return sailings per year to the Chatham Islands, including some sailings to Pitt Island, with a ‘glide-path’ for the MBL JV to ramp up to 17 return sailings per year after an initial bedding-in period, subject to demand. 17 sailings per year is roughly one sailing every three weeks. The agreement with the MBL JV will also include other performance indicators, which will be regularly reviewed throughout the 20-year term to ensure the service is meeting the needs of the community.
Will the ship still serve Timaru and Napier?
The new vessel is expected to serve both Timaru and Napier. The balance of sailings between the two ports is not yet confirmed and will depend on customer demand. Given the long length of the term, the MBL JV will be able to request changes to the ports served, but the community will have the opportunity to provide feedback before any changes are made.
Why is the term so long? What happens at the end of the 20-year term?
A 20-year term has been set because the Chatham Islands’ community needs certainty and stability in its shipping service. The agreement with the MBL JV will be closely monitored by the Ministry of Transport and will be reviewed regularly throughout the agreement term.
At the end of the 20-year term, subject to performance, the MBL JV will be able to seek a roll-over. The extension period will be mutually agreed, but could be five or 10 years.
It is vital that the Chatham Islands has a reliable, affordable, and stable shipping service secured for many years in the future, and the agreement will deliver that outcome.
What performance requirements will apply to the new service?
The agreement with the MBL JV will specify several performance indicators and targets that the MBL JV will need to meet. For example, these include performance targets around the numbers of sailings per year, punctuality, maintenance performance and acknowledging and responding to customer complaints. For some performance targets, financial performance abatements can be applied if the service under-performs.
If the MBL JV consistently fails to meet performance requirements, the Ministry will be able to exercise “step in” rights (where it can take over operations for a period of time), and if necessary, a “call option” (where the Ministry can take control of the ship and assign it to another operator).
Will the new operator increase freight rates?
At the start of the shipping services, the MBL JV has agreed to hold the existing freight rates (subject to inflation-related adjustments). The MBL JV will be allowed to adjust the freight rates each year for inflation, and to apply a fuel adjustment factor as the existing operator does now.
We have allowed for periodic reviews of freight rates over the course of the term of the agreement. This will ensure that the freight rates being charged remain affordable for the community, and commercially sustainable for the MBL JV. Any requests to review freight rates during these periodic reviews may be assessed by an independent expert.
If the MBL JV wishes to decrease freight rates, it can do so at any time without needing approval.
How will services be managed during the transition to the new supplier?
Until the new vessel arrives, the Southern Tiare will continue to operate to the Chatham Islands. We expect that the Southern Tiare will be able to continue operating until around the end of 2027 or early 2028 (but not beyond this point). This aligns with the expected delivery timeframe for the new vessel.
What does this mean for Chatham Islands Shipping Limited?
The Ministry will work with Chatham Islands Shipping Ltd, the Chatham Islands Enterprise Trust, and the MBL JV to ensure that services are not disrupted as we transition to a new service.
When will the agreement be signed? Will it be made available to the public?
The agreement with the MBL JV is currently being finalised. We expect it to be signed over the coming months. The agreement itself is commercially sensitive and will not be released to the public, but the Ministry intends to publish a public summary of the key agreement terms and will report regularly on the performance of the MBL JV.