KiwiRail to run new Cook Strait ferries Kupe and Cook from 2029

KiwiRail has managed the Interislander network since 1962, creating a single transport system that links the national rail network with Cook Strait crossings between Wellington and Picton.

The New Zealand Government has confirmed that KiwiRail will continue operating Cook Strait ferry services when two new rail-enabled vessels enter service in 2029, keeping rail freight and passenger transport connected across the country's most important maritime link.

Rail Minister Winston Peters said KiwiRail's decades of experience running the Interislander service made it the right choice to operate the new ferries, named Kupe and Cook, for their planned 30-year service life. The operating agreement will be reviewed after the first 10 years, in 2039, while keeping the long-term focus on reliable and commercially sustainable ferry services.

KiwiRail to continue integrated ferry operations

KiwiRail has managed the Interislander network since 1962, creating a single transport system that links the national rail network with Cook Strait crossings between Wellington and Picton. According to the Government, this integrated approach strengthens the freight route connecting Auckland and Christchurch while supporting passenger travel across the Strait.

The decision also reflects KiwiRail's recent operational improvements, with Interislander reliability reaching 98 percent. The company is also expected to meet its $160 million earnings target for the financial year ending 30 June 2026, subject to the completion of a final audit.

Commercial model backs ports and taxpayers

The Government said the arrangement is structured as a commercial agreement rather than financial support for KiwiRail. Under the model, KiwiRail will pay commercial port charges to CentrePort, Port Marlborough and Ferry Holdings for using the upgraded facilities.

CentrePort and Port Marlborough are contributing $100 million and $110 million respectively towards the programme, while Ferry Holdings will invest $373 million in the more extensive infrastructure required in Picton. A special purpose vehicle will jointly own those Picton assets with Port Marlborough, creating a shared ownership structure for the new facilities.

Officials have also confirmed that taxpayer funding for the entire programme will remain capped at $1.7 billion, matching the commitment announced in late 2025 after signing a fixed-price construction contract with Guangzhou Shipyard International. Construction of the ferries is scheduled to begin in 2027 before delivery in 2029.

New project replaces higher-cost proposal

The Government says the redesigned programme will save about $2.3 billion compared with the previous iReX project, which KiwiRail estimated had grown to $3.1 billion while Treasury believed total costs could eventually reach $4 billion.

The new ferries will be supported by newly built marine infrastructure in Picton and upgraded facilities in Wellington, with Ferry Holdings overseeing project delivery and retaining control of major programme decisions. Officials said the delivery model avoids cost-plus construction contracts and includes incentives designed to keep construction on schedule and within budget.

Kupe and Cook honour New Zealand's maritime history

The two ferries have officially been registered as Kupe and Cook, recognising figures closely linked with New Zealand's maritime story. The Government said the names reflect the importance of Cook Strait in connecting communities, supporting trade and preserving rail transport between the North and South Islands for decades to come.