Safety issues have been identified with Fullers' emergency procedures after one of its passenger ferries had to be evacuated on the Hauraki Gulf in 2011.
The Jet Raider was making a trip from Auckland to Waiheke Island with five crew and 316 passengers on board on the morning of August 27.
According to a Transport Accident Investigation Commission (TAIC) report, released today, about 11.20am the starboard engine failed catastrophically when two engine connecting rods broke free of the crankshaft and were ejected through the engine casing.
"The escaping mixture of fuel and exhaust gases, and possibly steam resulting from damage to the cooling water system, set off the fire alarms and gave the crew the appearance on the closed-circuit television that a fire had occurred," the report said.
The crew shut down the engines, sealed the engine compartment and released the CO2 fire-suppression system. Meanwhile, the skipper raised the alarm and anchored the ferry in the Motuihe Channel.