The Interislander ferry Arahura will be retired from service and replaced next year, it has been announced.

With an estimated cost of $25 million to bring the 31-year-old vessel up to standard, it was decided to discontinue the ferry from service, KiwiRail said today. It was also deemed unable to meet future freight demand.

Arahura will be replaced with the Stena Alegra, which was brought in to cover for the Aratere when it was undergoing repairs earlier this year.

"The Stena Alegra is powerful enough to maintain a reliable service and is significantly larger than the Arahura, adding considerably more freight and passenger capacity," KiwiRail said today.

Advertisement

"The Stena Alegra will undergo a significant upgrade and refurbishment prior to her arrival in New Zealand, and will be renamed."

The vessel will be brought in as a medium-term charter, instead of being bought by KiwiRail.

Many of the interislander ship masters were already familiar with the running of the Stena Alegra, the company said.

"Following on from her charter in the first half of 2014, their feedback was that the vessel will have the speed and capacity to maintain a good service and will be powerful enough and capable of maneuvering in winds up to gale force."

The vessel is almost one third bigger than the Arahura, and can transport close to the same amount of freight in two return sailings as the Arahura can in three, as well as up to 520 passengers, KiwiRail said.

The Arahura was involved in a near-miss with another Interislander ferry, the Kaitaki, in May this year.

The incident followed a near-miss with a fishing boat.

The Arahura was taken out of action when it became stranded in Wellington harbour after losing power last month.

Its replacement, the Stena Alegra, has not been without its own problems.

Shortly before it was chartered by KiwiRail, the ferry ran aground in a storm in the Baltic Sea in October last year.

Then, only a week on to the new job, the ferry lost power as it was leaving Wellington.

The Stena Alegra later suffered a nasty gash to to its hull which took it out of action.

Its crew also came down with an illness that forced the cancellation of some sailings.

The Stena Alegra was brought in as a temporary replacement for the troubled ferry Aratere, which has suffered a string of mechanical failures - notably the loss of its propeller during a sailing in November last year.