The engine is supposed to be the centrepiece of the festival, but was delayed again - this time because Christchurch rail staff did not attach it to an overnight freight train booked to bring it south.
Taieri Gorge Railway operations manager Grant Craig said for the second day in a row, several trips on the train had to be cancelled.
Investigations into the blunder were being carried out, but it appeared there may have been a glitch with the paperwork.
Ka 942 was scheduled to come down from Christchurch on Wednesday night, but maintenance problems meant its initial arrival had to be delayed until lunchtime yesterday.
The engine eventually arrived at 8.30pm yesterday, he said.
Consequently, four trips to Sawyers Bay scheduled for Thursday and five yesterday had to be cancelled.
"It's rather depressing. This is two days we've had to cancel.
"We've been planning this for a long time - it's very depressing. We thought about putting diesel engines on to do the shuttles, but they do not embody the essence of the Steam Festival."
Dozens of people, including some from as far away as Australia, waited on the platform at Dunedin Railway Station yesterday afternoon, expecting to board the steam train.
But when they were told it had been postponed again, anger was vented.
"How could this happen?
"It's pretty incompetent," a Dunedin mother of two said.
Another parent, who declined to be named, said he had bought tickets for yesterday's excursion after the Thursday run was cancelled, and brought his children in from Mosgiel yesterday, only to find it, too, had been cancelled.
He was angry because he and his children could not travel on the train now because they were going on holiday to Queenstown for the weekend.
Festival co-ordinator and Southern Heritage Trust founder Ann Barsby was also disappointed with the situation and understood the upset it had caused passengers.
"It's the major aspect of the whole festival. It has instant appeal for all ages - it's a huge draw card.
"There will be a lot of disappointed people who will miss the excursion.
"It's also a shame because if it had arrived when it was supposed to, there would have been quite a buzz around the Dunedin Railway Station instead of people standing around disappointed," she said.
Mr Craig said additional carriages containing an extra 180 seats would be attached to the steam train today which would give enough capacity to take those passengers who had missed out in the past two days.
