The crash, involving a Skippers Canyon Jet on February 23 last year, left all nine tourists on board with cuts and bruises - one also sustained a broken leg - when it crashed into rocks while traversing the river in Skippers Canyon.
In its report, released this morning, the Transport Accident Investigation Commission (Taic) found the driver lost control of the boat because of the mechanical failure.
"An inspection of the jet unit showed that three of the four stud-bolts securing the tailpipe assembly to the steering nozzle had suffered fatigue cracking, rendering the unit ineffective.
"It is highly likely that the fatigue cracking was because the nuts on the stud-bolts were not tightened to the manufacturer's recommended torque.
"As a result there was insufficient pre-tension in the stud-bolts."
The report said the company's hazard identification system had not identified the failure of the steering and propulsion system as a hazard, "focusing more on operating conditions and driver training".
At the time of the incident the boat, Discovery 2, was on its return leg when the driver was required to negotiate a series of bends in a section of the river about 10 metres wide.
Approaching a left-hand bend, the driver tried to turn the wheel over to the left, but it would not move.
The driver then tried to reduce speed by operating the reverse bucket, which also would not move.
Subsequently, the boat continued heading across to the opposite side of the river where it made contact with a rock face - it was estimated the speed of impact was between 20 and 30kmh, the report said.
On impact, one passenger was thrown partially overboard and suffered a broken leg, while the remaining passengers suffered minor lacerations and bruising.
A rescue helicopter was on the scene about 20 minutes later and evacuated the passengers.
Taic found "key lessons" from the incident included that the onus was on the maintainer of equipment to follow manufacturer's instructions and guidance and ensure it had an appropriate maintenance regime in place.
It also found while historically jet boat crashes had primarily been attributed to operational conditions and driver training "it is essential that operators pay equal attention to mechanical equipment and identify critical parts that, if defective, can have significant impacts on the safety of the operation".
"In the interests of improving safety in the adventure tourism sector, the Transport Accident Investigation Commission has made a recommendation to the Director of Maritime New Zealand to address the requirement for operators to identify systems that are critical to the safe operation of a jet boat and ensure appropriate maintenance schedules are in place."
