Second port to rival Bay for big ships

Port Otago expects to announce its new dredging programme to become big ship capable within three months, says chief executive Geoff Plunket.

That follows the recent announcement of Port of Tauranga's pioneering 10-year alliance with Fonterra logistics company Kotahi and Maersk Line, which will help underwrite Tauranga's own big ship dredging programme. The Kotahi deal will also funnel significant freight volumes through Port Otago competitor Prime Port Timaru, 50 per cent owned by Port of Tauranga.

"We're the deepest container port in New Zealand as it stands, so we've got a head start on everyone," Mr Plunket said. Only Otago and Tauranga currently have dredging consents.

Mr Plunket said Port Otago had advantages in that it was already 13m deep at low tide, and that half its channel was naturally 14m deep. The port was consented to 15m, but would be proceeding in stages, he said.

"We've got quite a small amount of dredging to get to 14m," he said, but going to 15m required much more. In addition, to accommodate vessels of more than 300m length, the port would need to extend its turning basin.

Port Otago had its own suction dredge and the sandy bottom made for relatively easy dredging, he said.

The port's dredge was currently on an out-of-port contract, but would become available again in about three months, by which time the port expected to have finalised its dredging plans. "We plan to do the deepening in stages in line with commercial demand," said Mr Plunket, who estimated the total cost to go down to 14m would be less than $10 million. Port of Tauranga's total dredging operations were expected to run to around $70 million, but the port had also made major commitments in recent years to develop its port infrastructure in order to handle bigger ships.

"As a result of the alliance, there's more certainty of revenue streams, which allows us the confidence to begin the first stage of the dredging project," Port of Tauranga chief executive Mark Cairns said.

Michael Knowles, chairman of the NZ Shippers Council, said the council supported other major ports developing to become big ship capable.

"All the forecasts show that we need four major ports to become big ship capable," he said. It made sense from the country's perspective not to have all its eggs in one basket, he added, citing the Christchurch earthquake, which had severely reduced Port Lyttelton's capacity. "The only thing we would say is that we don't want to see a lessening of competition," he said.