David is the business writer for the Bay of Plenty Times and Rotorua Daily Post.

Tainui keen to berth up partners for inland port

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WATERLESS PORT: An artist's impression of the proposed Tainui Group Holdings Ruakura inland port and logistics hub. (GRAPHIC/SUPPLIED)
WATERLESS PORT: An artist's impression of the proposed Tainui Group Holdings Ruakura inland port and logistics hub. (GRAPHIC/SUPPLIED)

Tainui Group Holdings last week announced it was seeking expressions of interest from a range of world class port operators for Ruakura, the major new inland port it proposes developing near Hamilton.

However, the logical potential partners, the Port of Tauranga and Ports of Auckland, at this stage do not seem likely to become involved.

"Port neutrality - providing the flexibility for importers and exporters to access both seaports so they can get the best deals and manage risks is a key part of the Ruakura proposition," said Tainui Group Holdings chief executive Chris Joblin.

A Tainui Group Holdings spokesman confirmed that Mr Joblin had been accurately quoted in a report this week saying the developer was looking for a New Zealand or overseas-based port operator that had no existing ties with the Port of Tauranga or Ports of Auckland.

However, the spokesman said Tainui Group Holdings remained in dialogue with the Port of Tauranga on a range of port-related issues.

Port of Tauranga chief executive Mark Cairns confirmed the port had been in regular dialogue with Tainui Group Holdings about the site.

"But our approach has been to wait until we have a foundation shipper customer to establish a freight hub in Hamilton," he said.

That approach is consistent with the Tauranga port's recent strategic developments, including its 10-year deal with Kotahi Logistics, which has effectively allowed it to lock up the majority of Fonterra's North Island dairy exports. Kotahi already has a major warehouse hub at Crawford St in Hamilton.

Ports of Auckland - which declined to comment on the Tainui Group Holdings announcement - had already effectively passed on the option earlier this year when it put an alternative stake in the ground with an agreement to buy a 33ha site at Northgate Business Park at Horotiu, just north of Hamilton.

When the deal was announced, Ports of Auckland chief executive Tony Gibson said establishing a freight hub in the Waikato was central to its supply chain strategy.

"Waikato will complete our North Island freight hub network, complementing our existing sites in the Manawatu, Bay of Plenty and Wiri, South Auckland."

Last August, Ports of Auckland also announced it would open an intermodal freight hub on 1.4ha of land in Triton Ave, Mount Maunganui, by the end of 2015, in a deal with businessman and Tauranga mayoral candidate Doug Owens, who controls Triton Pacific, the owner of the land. When the Bay of Plenty Times went to press Ports of Auckland was unable to say when the Triton site would become operational.

But it would be tiny compared with Port of Tauranga's own 25ha Metroport Auckland operation.

Mr Joblin said this week that Ruakura was cleared for take-off from a zoning and resource consents point of view, and that Tainui Group Holdings now wanted to appoint a port operator to have input to the construction of the port, which will get under way later this year.

"Tainui Group Holdings is seeking a world class port operator who shares our vision to shake up the freight economics in the upper North Island and change the game from plant-to-port for the region's rapidly growing importers and exporters as well as increased movement of domestic cargoes," Mr Joblin said.

Over the past three years, all necessary zoning and major resource consents have been secured for the first stage of the Ruakura project. The 480ha development incorporates a 33ha inland port and 84ha logistics zone.

Tainui Group Holdings' statement references a forecast 60 per cent increase in freight volumes in the region by 2042.

However, industry sources have noted that estimating freight volumes a quarter of a century out is by no means an exact science.

Tainui Group Holdings is targeting an annual container throughput of 100,000 20 foot equivalent units by year three, and says the port will have the capacity to eventually manage more than 1 million container moves a year when it is fully built out in the coming decades.

"Ruakura offers a large-scale, greenfields, fresh start for major exporters, importers and domestic cargo owners," said Mr Joblin.

"We have designed in efficiency from the word go and we are looking for the best operators in the business to help us maintain excellence in every aspect of operations."

The inland port's links would include a dedicated full diamond interchange to the new Waikato Expressway, which is currently under construction, to reduce drive times to and from Auckland, and a proposed four-track rail siding at Ruakura for the efficient turnaround of trains to Ports of Auckland and the Port of Tauranga.

The successful operator would have the option to invest in the site infrastructure.

Tainui Group Holdings said key players in the export and imports sector had already approached the company, citing their interest in a "neutral" port operator. But a spokesman said no potential customers had yet been confirmed.

Mr Joblin said the company welcomed approaches from prospective port operators, whether New Zealand or overseas based, who will need to submit their formal expressions of interest by September 30, 2016.

Tainui Group Holdings' statement said the new operation would be a "major new inland port to link the golden triangle of Auckland, Hamilton and Tauranga".

However, it remained unclear whether any significant international port operators would be interested in investing in an inland port that would have to process its containers through the golden triangle's two existing and well-developed seaports.

The Port of Tauranga also owns 50 per cent of Northport, Whangarei. And assuming - as seems likely - that the Port of Tauranga and Ports of Auckland would be actively competing with the new inland port, Tainui Group Holdings's best hope may lie further south.

Speculation is that Napier Port, ultimately owned by Hawke's Bay Regional Council, or CentrePort, ultimately owned by Greater Wellington regional Council and the Manawatu-Wanganui Regional Council, could be interested in accessing freight out of Hamilton.

However, Napier is likely to be less viable as it doesn't have a direct rail link, meaning that CentrePort may be the most likely candidate, said an industry source.

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