The Kaiarahi Interislander ferry was "catastrophically" damaged and in need of European specialist assistance when its gearbox failed last year, ministerial briefings reveal.
It was first thought the ferry would be back in service by March, but that has now been pushed out to the middle of this year.
The last few months have been difficult for KiwiRail's operations across the Cook Strait.
The fleet of three ferries is ageing, more prone to unexpected breakdowns, and systems onboard are becoming obsolete.
New Zealand's supply chain was put under pressure in September when two of the ferries needed maintenance at the same time.
Briefings to ministers from the end of last year reveal the full extent of the damage to the Kaiarahi, following a gearbox failure in August.
Then KiwiRail chief executive Greg Miller reported in the briefings, released to the Herald under the Official Information Act, that there was significant damage.
"Bearings and gears were catastrophically damaged during the failure. Further, the forces caused by the failure warped the gearbox casing. In order to get access to the gearbox, we needed to remove some utility services and cut through the deck."
The gearbox is designed to last the entire life of the ship to the point that it cannot be fully accessed for inspection without taking it apart.
Miller said KiwiRail was satisfied the gearbox had been maintained and monitored appropriately under the Interislander's asset management practices.
This included regular oil sampling as well as vibration and thermal monitoring.
"The failure is simply sudden and accidental", Miller reported.
KiwiRail received assessments from engineering company Aurecon confirming the nature of the fault was unpredictable.
The Kaiarahi was going to take months rather than days or weeks to fix, so KiwiRail leased an additional ferry called the Valentine to help out. It had been working the English Channel and arrived in New Zealand in the middle of December.
The state-owned enterprise considered options for the Kaiarahi including rebuilding the gearbox, replacing it with a new or secondhand gearbox, or putting the ferry into retirement.
Miller told ministers KiwiRail focused on repair options as initial estimates indicated the cost to purchase a new gearbox would be "very expensive".
"Repairing the ship will ensure the Interislander service retains capacity and supports
the resilience of the New Zealand freight supply chain.
"As Kaiarahi also carries passengers it will ensure adequate ongoing capacity is provided for social and tourism connections between regions."
All repair options KiwiRail was considering at the time required European specialist assistance, meaning parts would have to transported to and from the gearbox manufacturer overseas, the briefings said.
Interislander acting executive general manager Peter Mathews told the Herald the gearbox required machining and straightening. He confirmed the bearings and pinion shaft needed to be replaced and manufactured by an overseas supplier.
Mathews said the cost of the repair was commercially sensitive, but expected to be substantial. Most of it will be covered by insurance.
"The ship is likely to be repaired in either Tauranga or Picton, with both ports able to provide berths that are not vulnerable to the southerly storms that Wellington is exposed to from time to time", Mathews said.
"A sheltered berth is essential as the vessel will be without propulsion for some of the time during the repair."
After receiving the final supply dates for the replacement parts, Mathews said KiwiRail now expected the Kaiarahi to return to service mid-year rather than an earlier estimate of March.
"Kaiarahi's gearbox failure highlights that our fleet is ageing, and while we undertake a significant amount of maintenance on our vessels, they are, just like an old car, more prone to breakdowns."
KiwiRail has ordered two new bigger and rail-capable ships, which will start entering service in 2025 and eventually replace the existing fleet.