A new deepwater logging port is one of two East Cape projects vying this week for $45 million in government funding.
Terrafermah managing director Dave Fermah said the planned port in the East Cape will take 10,000 logging truck trips off the road, put $22 million a year back into the local community and open up new economic opportunities in tourism, coastal shipping and more.
The company leads the wharf project in conjunction with the Māori owners of the land on which the deepwater port will be sited.
"The East Cape area has large tracts of commercial forest reaching maturity, much of it on Māori land, but commercial viability has been hurt by high transportation costs," Fermah said.
"The port solves this by putting the logs directly onto ships at a direct annual saving of $14m to the Māori land and forest owners, compared to the barging option."
In addition to local community gains, taxpayers win too, with savings of $165m a year as a result of fewer trucks on the road, according to figures from an Opus Consulting report.
The project is up against a competing bid that proposes to barge logs to the Gisborne port from a site at Te Aroha just to the west of Hicks Bay. From the barge, logs would then be loaded onto ships.
But this double-handling comes at a significant cost, both economic and environmental, Fermah said.
"A barge decision could set the region and its vital forest industry back for 50 years.
"From a commercial point of view, barging adds costs and provides none of the long-term economic opportunities that a general-purpose deepwater port can open up in the region."
The environmental harm from the barging operation, which seeks to dredge the foreshore and cut into a pristine beach has also led to widespread opposition and protests from the Te Aroha community who are calling for an end to the barging project.
"We need this port project for our communities," Potikirua Trust chairman Allen Weanga said.
This week, ministers and Crown Infrastructure Partners will make their decision on which of the two competing bids will receive the $45m in funding.
"It's not just our hapu who will benefit, but all of the East Cape hapus and people," Weanga said.
"A wharf, not a barge, is what we need down here to get our people back on their feet."
But a working group tasked with assessing the environmental, cultural, social and economic impacts of the barge facility says it had the community's support and could create up to 100 jobs.
Deepwater port will spur new industries
Terrafermah estimates gains from the port will inject $28,000 to $47,000 per family annually into the East Cape economy compared to the barging option. In addition, there will be employment income from the 165 full and part-time jobs created.
"Putting in this deepwater port and facilities will remove the tyranny of distance, one of the reasons why the East Cape region is one of New Zealand's most economically-deprived areas," Fermah said.
"Very high transportation costs mean that money paid for uncut trees is often well below the cost of replanting and pruning for the next harvest. So for the beneficiaries of Māori land trusts, there may never be any payments unless this changes."
There are further significant benefits that a deepwater port offers over barging. While both projects are seeking the same amount of funding, a port has multiple uses, opening the region up to new opportunities.
It can be used for regional coastal shipping — "the new blue highway" as Shane Jones, former Minister For Economic Development, has put it.
While coastal shipping fell out of favour in the 1960s when trucks took over, it is now being seen as a sustainable way of reducing trucks on roads and transport costs.
The Provincial Growth Fund, MPI, and Seeka have all identified areas in the East Cape where kiwifruit and avocado orchards could be established. Coastal shipping can take this agriproduct directly to the Auckland domestic market or Tauranga port for export, improving East Cape grower returns.
Cruise New Zealand has estimated that up to nine cruise expedition boats a year could visit the deepwater wharf. These high spending tourists on day trips would spend an estimated $3 million per year on cultural activities, with local communities providing all the cultural activities, tours and creative sales.
A weekly passenger ferry service to Gisborne or Whakatāne is also being investigated. This could improve access to supermarkets and other essential services for East Cape locals.
Fermah said Eastland Group, who operate Gisborne's Eastland Port, were interested in taking over operations once the port is built.
Te Rimu Trust, which is leading the barge proposal, established the Te Araroa Working Group that has been tasked with assessing the environmental, cultural, social and economic impacts of a barge facility.
The working group's secretary Tiwana Tibble said some community members initially responded with 'angst' to the barge proposal but it had since gained widespread community support.
"We've got a lot of community support. We've got a landowner that supports the project. That's pretty critical. Ownership is 9/10ths of the law."
Tibble said acknowledged the barge facility faced some environmental challenges as well as with all of the consents that will be required but he hoped those could be resolved.
"If you're gonna build any marine structure, it's not straightforward, but there is provision.
"If the wider benefit – social, economic, community, cultural – if that all stacks up, the Toi Rawhiti District Plan provides for that.
"The next twelve months will either prove or disprove that, but on the face of it, there are some huge benefits."
He predicted the barge would create 100 jobs.
"That's a pretty big change. It'd be a huge benefit."
Tibble was also optimistic the barge could create more tourism opportunities and aquaculture and said once the barge was underway, opportunities would multiply.
He said, currently, costs to cart the logs were "through the roof" and a barge would reduce them significantly.
Tibble suggested cruise ships could ferry passengers from their boat to the shore, as done in Gisborne.
"We don't think this is straightforward, but we've done a lot of work on this, and we think we've got a great chance. The next twelve months will tell.
"We've gotta convince a whole lot of parties, but we've got a majority support to go forward."
"We're reasonably happy with our progress to date, to get a majority of public supporters that turned up to our public hui and said let's go to the next stage.
"It's subject to the Crown. The Crown has to make the decision."