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Interislander is reducing its Cook Strait ferry fleet from three to two.
The Aratere will retire when demolition begins on its decaying dock - late this year or early the next - to add infrastructure for new ships.
Two new ferries are due in 2029.
KiwiRail's Adele Wilson says it would've cost about $120 million to have an interim dock.
"The idea of the temporary wharf is one of those things that is not possible if we want to bring this project in on budget and on time and at a level that's affordable."
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