The Kaitaki Interislander ferry anchored off Wellington's rocky south coast in rough weather when it lost power in January 2023. Photo: KiwiRail
KiwiRail has been forced to pay $432,500 after being found guilty of exposing passengers to risk when the Kaitaki Interislander ferry lost power with more than 880 people on board.
The agency was being sentenced on Monday afternoon in the Wellington District Court after pleading guilty over the incident where its ferry broke down off Wellington's rocky south coast.
On 28 January 2023, the Kaitaki was sailing into Wellington Harbour when it lost propulsion - which resulted in a mayday call.
Anchors were lowered and lifevests handed out to the passengers, but the crew were able to restore limited power, allowing them to limp the ship to port, accompanied by tug boats.
In January this year Maritime New Zealand filed a charge under the Health and Safety at Work Act of exposing people to risk of harm following a near year-long investigation into the incident.
Victim impact statements read out this afternoon revealed the stressful and frightening situation on board the ship that day.
Many said likened the event to that of the Wahine Disaster and said they had not gone on an Interislander service since.
One passenger detailed that the event had a long term impact on them and that the recent ferry grounding, in which the Aratere ran aground on 21 June just north of Picton, had brought back memories of the Kaitaki power outage event.
A former police officer read out his victim impact statement to the court and applauded the efforts of the ferry's workers that day.
"I was impressed with how the staff of the interislander performed."
The maximum penalty the organisation faced was a fine of up to $1.5 million. The company was ordered to pay $432,500, including costs associated with the case.
KiwiRail's Duncan Roy outside Wellington District Court on Monday. Photo: RNZ/ Bill Hickman
Speaking to media outside court after the sentencing, KiwiRail said passengers could be confident systematic errors had been solved.
Interislander general manager Duncan Roy said the company acknowledged the distress caused to customers and crew, and respected the judge's decision.
"You can be very confident that systematic errors in our asset management have been removed. We have a dedicated system now for planning, for the delivery, and the assurance that that delivery has occurred."
He said it was important to the company to make a public apology, reinforced by pleading guilty earlier this year.
"Trust is hard won and easily lost," he said. "We are focussed on providing a safe and reliable service."
To those customers who had lost trust, he said: "We're sorry, we've changed, we've improved, please come and use our service."
After the Kaitaki's near miss a Transport Accident Investigation Commission interim report found the ferry's engines failed after one of the ship's safety-critical rubber expansion joints ruptured and prevented the engines restarting.
Chief investigator of accidents Naveen Kozhuppakalam said the joint which failed had been manufactured in 2005 before being installed in 2018.
However, the manufacturer's advice was the joint should be no older than eight months when installed, inspected annually and replaced every five years.
Judge Peter Hobbs said the failure of the rubber expansion joint was most likely caused by the extended duration of operating at a high temperature and the age of the part.
Hobbs said in his view the risk of the part that failed on the boat breaking was well known to KiwiRail.
"It was an obvious risk that exposed crew and passengers to the risk of serious injury or death, acknowledging however that fortunately no serious injury occured."
Hobbs said that the KiwiRail had a poor safety record with respect to ferry services.
He detailed safety issues in 2020 where and 2022 where staff were injured while working.
Hobbs told the courtroom KiwiRail's early guilty plea and the remedial steps its made reduced the fine it had to pay.
Monday's sentencing came after an Interislander passenger on the same ferry sailing won compensation in the disputes tribunal after it found the service "was not fit for purpose".