A major reset is underway for New Zealand’s critical Cook Strait connection, with the government unveiling plans for two new Interislander rail ferries set to enter service by 2029. The announcement marks a new chapter in a long-running saga to replace the ageing fleet that has linked the North and South Islands for six decades.
The updated plan—revealed by Rail Minister Winston Peters and backed by Cabinet—aims to deliver “rail ferries and straightforward infrastructure” at a significantly lower cost than the now-cancelled iReX project. Peters says the new approach is guided by “minimum viable and maximum reuse” principles, promising both fiscal restraint and operational modernisation.
Modern Ships with Future-Proof Features
The new vessels, each 200 metres long and 28 metres wide, will carry up to 1,500 passengers and offer 2.4 kilometres of lanes for vehicles, including capacity for 40 rail wagons. These specifications exceed the size and functionality of the current Interislander fleet while avoiding the infrastructure issues posed by the larger ships ordered in 2021 under the iReX plan.
Critically, the ships will be fully rail-enabled. They will feature both road and rail decks, allowing for single shunt loading and unloading of multiple wagons—an operational improvement praised by KiwiRail and freight stakeholders. “Rail-enabled ferries … will ensure the lowest operating cost for rail freight and increased capacity for road transport operators,” said KiwiRail Chief Executive Peter Reidy.
Designed for performance and resilience, the vessels will operate at speeds of up to 20 knots and navigate through the Tory Channel. They will incorporate modern redundancies for safety and future-proofing, complying with international maritime environmental and safety standards. This includes the International Convention for the Prevention of Pollution from Ships and requirements for “safe return to port.”
Infrastructure: New for Picton, Reused for Wellington
A key element of the new strategy is its differentiated port infrastructure approach. Picton’s marine facilities, deemed in need of full replacement, will be entirely rebuilt. In contrast, Wellington’s infrastructure will be adapted and reused, avoiding the costly overhauls proposed under the previous plan.
“The marine infrastructure in Wellington has life left in it, so it will be modified and re-used,” said Peters. “Our analysis showed this to be the most cost-effective option, and contrasts sharply with the wanton demolition and extravagant specification under the cancelled project.”
Marlborough Mayor Nadine Taylor welcomed the clarity, saying the announcement “gives Port Marlborough the certainty it needs to move forward with detailed design” and reinforced the region’s importance as a national transport hub.
Wellington’s terminal buildings will remain unchanged for now. Peters dismissed calls for large-scale architectural builds, remarking that “the people paying their taxes will not” regret the absence of “a Taj Mahal in Picton and a Sydney Opera House in Wellington.”
A Cheaper Path Forward—But At What Cost?
The new plan comes in the wake of the government’s December 2023 decision to scrap iReX, a project that had ballooned from $700 million to nearly $3 billion, with further warnings it could reach $4 billion. Peters repeatedly emphasised the cost savings of the new strategy but did not provide specific figures.
“We are saving the taxpayers billions,” he said. Ferry construction contracts are expected to be signed by the end of 2025, with shipyard shortlisting already underway. Meanwhile, port infrastructure work will begin with enabling works by late 2025.
The opposition has questioned the lack of detail. Labour transport spokesperson Tangi Utikere criticised the announcement, saying, “All Winston Peters has announced today is that New Zealanders will be waiting another three years for ferries and still have no idea how much they’re going to cost.”
Still, the government maintains the current approach is both financially prudent and strategically sound. KiwiRail’s Reidy noted the long-term value of the investment, including a standardised approach to asset management, training, and operations. “Two new, identical ships will improve Interislander’s efficiency by reducing ongoing maintenance costs,” he said.
The Timeline and What’s Next
The roadmap for the project begins in earnest in April 2025, when Ferry Holdings—a new Crown entity—will assume responsibility from Treasury. The company will lead governance coordination with KiwiRail, Port Marlborough, and CentrePort, finalise co-funding agreements, and advance technical and legal preparations.
Shipyards will be shortlisted by June, with a letter of intent to be signed with a preferred builder in the third quarter and final contracts secured by the end of the year. The government expects both ferries to enter service by Christmas 2029, coinciding with the retirement of the current fleet.
The implications for stakeholders are wide-ranging. Freight operators are set to benefit from greater capacity and efficiency. Tourists and passengers will gain improved reliability and comfort. And for government agencies, the project offers a case study in balancing infrastructure ambition with fiscal responsibility.
As Peters put it, the new ferries “will get you, your family, the caravan, the dog and all the rest, across the Strait, which is what New Zealanders want to happen.”