Interislander’s only rail enabled ferry, the Aratere, will be retired this year, KiwiRail has confirmed.

The withdrawal of the ship means there will be just four ferries being operated by the Interislander and Bluebridge companies for nearly four years, until the new vessels are scheduled to go into service in December 2029.

Minister for Rail Winston Peters says the decision by the KiwiRail board to retire the Aratere from service is “about the next 60 years of rail on the Cook Strait”. Ferry Holdings supports the move.

He said it would have cost $120 million to keep the Aratere in service.

“We will not waste one tax dollar on shuffling infrastructure to keep the vessel in service for the sake of it or add any infrastructure risk to our objective of completion in 2029.”

The Aratere berth in Picton will be demolished and a new, double lane linkspan will be built in its place to serve road and rail for the next 60 years.

Peters said KiwiRail has briefed the government on its plans to serve the market in the interim. Goods will still get from A to B by shifting freight on to the Kaitaki and Kaiārahi, making use of coastal shipping for some heavy freight such as grain, and adapting their rail and ferry schedules to best suit the market.

National Road Carriers has welcomed the announcement.

James Smith, GM policy & advocacy, said the decision to retire the Aratere is a critical step in future-proofing New Zealand’s inter-island transport network.

“While the retirement of the Aratere marks the end of a long-serving vessel in New Zealand’s freight and customer operations, we acknowledge the careful planning KiwiRail has undertaken to manage the transition,” he said.

“Maintaining safe and reliable freight connections across Cook Strait is essential for our members and the customers they serve.”

Smith said the decision to enhance road-bridging capacity to carry rail freight ensures that critical freight flows between the North and South Islands will be maintained at a high standard.

“The assurance that existing customers will be rebooked, and that freight continuity remains a top priority, provides our members and the broader freight industry with confidence. We also support KiwiRail’s intent to consult with the freight market during this period to ensure operational arrangements are practical and effective,” he said.

“Ultimately, this work lays the foundation for a stronger, more resilient transport link that will benefit freight operators, their customers, and all New Zealanders in the years ahead.”

Transporting New Zealand CEO Dom Kalasih said KiwiRail’s announcement gives some certainty on what’s happening, however it was a concern that the decaying wharf has reached such a point that the Aratere can no longer be used.

“Given the earlier debate around rail-enabled versus rail capable it is also interesting that it appears that freight movements between the islands will manage for at least the next four years without a rail enabled vessel,” he said.

“Our road freight operators will do their best to adapt to the challenges of having one fewer ferry, but there are times when getting space on board is going to be tight.”

Kalasih said planned maintenance, or unexpected breakdowns could put real pressure on capacity for freight.

“While we appreciate the early notice, the reality is that time has run out for any further delays in securing new ferries.”

He said it is vital that Peters gets the new ferries on the water as quickly as possible.

“December 2029 is looking a long way away now. The transport sector wants resilience and regular sailings. Anything else is just not good enough for the country.”