Rates lift could pay for Napier Port expansion but council says it's too early to speculate

By Patrick O'Sullivan -
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Funding options to pay for Napier Port could prove unpopular. Photo/Duncan Brown
Funding options to pay for Napier Port could prove unpopular. Photo/Duncan Brown

A slashed port dividend could hit ratepayers in the pocket but Hawke's Bay Regional Council chairman Rex Graham says it is too early to speculate.

Napier Port is applying for resource consent to build a new wharf and associated infrastructure, as cargo volumes continue to break records.

If the consent is granted Napier Port directors are obliged to consider all options to pay for the expansion when writing its business case, to be presented to the port's owner, the Hawke's Bay Regional Investment Company (HBRIC).

HBRIC is owned by the Hawke's Bay Regional Council.

One option is selling a stake in the port, which could take place only after wide community consultation.

HBRIC interim chairman Sam Robinson said he was unaware of any conversations about selling a stake in Napier Port.

However, Hawke's Bay Today understands there has been informal discussions at regional council and port company level.

Another financing option is a combination of port revenues and debt, which could slash the dividend the port pays to the regional council.

The port paid a dividend of $7.9 million to the regional council from a profit of $11.5m for the year to the end of September.

The regional council's operating revenue was $42.3 m to the end of June.

When asked if the regional council would replace a slashed port dividend with borrowing or increased rates Mr Graham said he "wouldn't look that kindly" on signalling options on financing the expansion early "especially regarding the shareholder's dividend".

"Everyone is very clear that we are going to have some major capital expenditure at the port," he said.

"What people haven't had is the discussion about how we do that - the various options."

Mr Cowie said the port was working hard toward attaining a resource consent and progressing well with environmental assessments and community consultation.

The port expects to lodge its consent application in the middle of this year but the expansion could be "years away".

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