Union fears Fonterra move will hurt ports

The Maritime Union wants KiwiRail to spell out what part state subsidies may have played in Fonterra's deal to move its exports through regional ports in favour of long-distance rail.

Dairy giant Fonterra is switching shipment of its products from Timaru to Port Lyttelton for the next five years and dropping the port at New Plymouth to ship through Auckland, Tauranga and Napier.

The Timaru and Taranaki ports will each lose about a third of their cargo volumes.

Critics claim the extra cost of railing 22,000 containers to Auckland and Tauranga must make use of the Government's $90 million KiwiRail subsidy to be financially viable.

But KiwiRail chief executive Jim Quinn told the Taranaki Daily News the subsidy was irrelevant.

"KiwiRail needs that subsidy, that's a fact. But the Fonterra deal has nothing to do with that," he said.

"We price freight movements by distance. Fonterra had clearly made its decisions based on how it wants to operate its end-to-end supply chain."

Fonterra would pay more to move product from its Whareroa factory in Taranaki to Auckland or Tauranga than to Port Taranaki but that was its choice, he said.

However, Maritime Union general secretary Trevor Hanson said he was not satisfied with KiwiRail's answers and "either they are being subsidised or not, and we believe there is more to this situation than regional communities are being told".

The union called for public meetings for those affected to begin "active resistance" to Fonterra's actions.

Locals needed to fight back against the destruction of these ports, and ultimately the damage to their regional communities, he said.

"The Government has the end responsibility here to step in for the national interest.

"To stand aside and let these heartland communities have their infrastructure and transport systems demolished by a 500-pound gorilla called Fonterra is showing that it either has no idea or the wrong idea."

Mr Hanson said the money ports had invested in infrastructure to handle Fonterra's trade had effectively been flushed down the drain.

"The question needs to be answered - is the Government aware of any influence of subsidies on the price of the movement of cargo on rail hundreds of kilometres away from its regional catchment?"

The 65 per cent reduction in Fonterra shipping through Port Taranaki would result in about 22,000 containers being cut from the record 65,000 the port handled last year.

Port Taranaki spent $20 million in 2007 on dredging so it could handle the same big ships that called at Auckland and Tauranga.

PrimePort Timaru would lose about 30,000 containers a year - nearly half its container trade, which accounted for about 80 per cent of its operation - to Port Lyttelton.

- NZPA