en.Wedoany.com Reported - The New Zealand government has confirmed that two new Cook Strait ferries will remain in public ownership and continue to be operated by KiwiRail when they enter service in 2029.
Rail Minister Winston Peters said KiwiRail's experience operating the Interislander service since 1962 makes it the right choice to operate the new rail ferries. The two ferries have been officially named "Kupe" and "Cook".
Peters noted that this decision allows the rail freight network and ferry operations to function as an integrated system, supporting the key domestic freight route between Auckland and Christchurch. The reliability of the Interislander service has improved to 98%, and KiwiRail expects to achieve its profit target of NZ$160 million for the financial year ending June 30, 2026, following a final audit. Under the current arrangement, KiwiRail will be responsible for operating the ferries over their planned 30-year service life, with a review scheduled after 10 years of operation in 2039.
The government reiterated that taxpayer funding for the ferry replacement project is capped at NZ$1.7 billion, having previously confirmed a fixed-price shipbuilding contract with Guangzhou Shipyard International. Construction work is set to begin in 2027, with the ferries scheduled to enter service in 2029. Peters said the revised plan will save taxpayers approximately NZ$2.3 billion compared to the original iReX project. KiwiRail had estimated the iReX project cost at NZ$3.1 billion, while the Treasury warned costs could rise to NZ$4 billion.
The project also includes the construction of new maritime infrastructure in Picton and upgrades to Wellington's wharves. Peters said Ferry Holdings will retain overall control of the project, and no cost-plus construction contracts will be used.
KiwiRail Chief Executive Peter Reidy welcomed the government's decision, saying it recognizes the company's operational experience and efforts to improve reliability. Reidy said the company has operated the Interislander service for over 60 years, and the new ferries will provide greater capacity and reliability for passengers and freight customers. The Interislander fleet achieved over 99% sailing reliability (excluding weather-related disruptions) in the last financial year. KiwiRail will continue to work with project partners including Ferry Holdings, Port Marlborough, and CentrePort to support port infrastructure development and ensure a smooth transition when the ferries enter service. Early construction work at the ports has already begun, and the company will start construction of an overbridge on Dublin Street in Waitohi Picton later this year to maintain the rail connection through the town. Reidy added that company staff have used their operational experience to help shape the design of the new ferries, ensuring the vessels are practical, safe, and fit for purpose.
