Cook Strait ferry failures: Who runs the ferries and how much do they cost?

The Interislander ferry Kaitaki is out of service for at least two weeks. Photo / Mark MItchell

Crossing the Cook Strait has been anything but smooth sailing. Dire Strait is an ongoing investigative series looking at the full saga and inside story of our interisland ferries, how they came to be in such a state of disrepair, and how it’ll all be fixed.

Thanks to wildcat labour strikes, questionable food and services, and bilious crossings over one of the world’s roughest stretches of water, the Cook Strait ferries have never been out of the headlines long since their debut in 1962.

As the countdown starts to the scheduled delivery of two new, much bigger interisland service ferries from 2025 (sceptics think it’ll be more like 2028 given the world’s on a go-slow for everything since Covid), planning to cross the sea between the North and South Islands has become a logistics nightmare for many in recent months.

Two operators ply Cook Strait’s waters, their services always vulnerable to weather extremes quite apart from the rash of breakdowns and cancelled sailings that have beset travellers lately.

Synonymous with Cook Strait is the Interislander service due to its 61-year-old legacy. It’s operated by state-owned KiwiRail and is propped up by the taxpayer through Government funding to the parent KiwRail Group. The service was started by “the people’s railway”, government department NZ Railways in 1962, with the vessel Aramoana, its “puke green” colour appropriate for some crossings, note historians.

Twenty-one years ago, private company StraitNZ, founded by Jim Barker, entered the Cook Strait business with the Bluebridge brand. Today it is operating two vessels, the Straitsman and the recently purchased Connemara. (The Straitsman has since been sold to a Channel Islands ferry operator. There’s no word yet when it will leave the country.) Bluebridge also has a ferry, the Strait Feronia, in drydock for maintenance. When it comes back on duty, Bluebridge says it will sail alongside the Connemara on a full seven-day-a-week schedule.

While both operations have experienced engineering problems recently - Bluebridge’s Connemara, purchased to increase capacity and avoid disruption caused by the Strait Feronia’s drydocking, broke down in late February and was out of action for five days - the KiwiRail service has copped most of the public ire as passengers, holidaymakers and freight trucks found themselves stranded in Wellington or Picton.

Consumer NZ has asked the Commerce Commission to investigate both operators’ recent practices. It believes they are failing to meet their obligations under the Consumer Guarantees Act (CGA) and misleading consumers about their rights – which would mean they are also breaching the Fair Trading Act.

The consumer watchdog, which has received complaints from upset passengers, says under CGA the ferry operators are required “to carry out services (scheduled sailings) with reasonable care and skill”.

Given the frequency of sailing disruptions, caused by mechanical issues, the watchdog says it does not believe the operators are using reasonable care and skill in providing services. It says the CGA also requires ferry operators to provide a service which is fit for purpose.

KiwiRail’s Interislander website says it usually operates four vessels - Kaiarahi, Kaitaki, the rail-enabled Aratere, and the freight-only carrier, the leased Valentine. Collectively they cross the strait a total of 4000 times a year, carrying nearly 800,000 passengers and 250,000 vehicles. The Valentine was leased to provide freight capacity after the breakdown last year of the Kaiarahi. The Kaitaki is now out of service for at least two weeks.

The three KiwiRail ferries are all nearing the end of their 30-year working life. While KiwiRail says there is no root cause for the rash of breakdowns, it acknowledges the vessels are in the last period of their “useful lives” and the focus is on “their safe and reliable operation” until the arrival of the two new ferries from a Korean shipyard.

Their contracted price was NZ$551 million. The hybrid diesel-electric ferries will be much bigger than the current vessels at 220m long, and be able to take rail and truck cargo. KiwiRail says they’ll “come into operation in 2025 and 2026″.

In the 2022 financial year, the Interislander service operated 2737 sailings between the capital and Picton with three vessels, according to KiwiRail’s annual report.

The service recorded an 18 per cent fall in revenue to $106.4m in FY22 on the previous year, attributed to the impact of the pandemic and breakdown of the Kaiarahi’s gearbox. Most revenue at $54.6m was from vehicles. Passenger revenue was $44m, with the balance from “other” sources.

This Government has to date invested more than $8 billion in the total KiwiRail group. The group, which includes the Interislander service, reported an operating surplus of $133.9m in FY22.

Bluebridge's Cook Strait ferry Straitsman negotiating 6 metre swells in Cook Strait as it approaches Wellington Harbour. Photo / Mark Mitchell

Transport Minister Michael Wood, to whom the KiwiRail board of directors answers, says the company has not approached the Government for more funding for the current fleet in the meantime.

The KiwiRail ferries employ 681 people.

KiwiRail, noting to the Herald it had put on extra sailings during the upheaval, said the cost of the disruptions was commercially sensitive.

Bluebridge ferry operator StraitNZ also cited commercial sensitivity around some Herald questions.

In a statement it said its fleet configuration after the Strait Feronia comes out of drydock had yet to be confirmed but the company would continue to operate two vessels across Cook Strait.