Link to build deep water port in north

By FIONA ROTHERHAM

In a New Zealand first, Northland Port Corporation and Port of Tauranga have entered into a 50:50 joint venture to develop and operate a $65 million deepwater port at Marsden Pt in Northland.

The joint venture is a "step in the right direction" for further port company co-operation and rationalisation, says Northland Port chairman Mike Daniel.

"Having all these ports in New Zealand is like having a management team at every bus-stop.

"It is not logical."

Northland approached Tauranga for its experience in container port development and forestry.

Port of Tauranga chief executive Jon Mayson is likely to run the new port in tandem with his present role.

Northland handles around 100,000 tonnes of logs a month but that figure is predicted to rise to two million tonnes a year within five years.

Carter Holt Harvey is building a $150 million laminated veneer timber plant at Marsden Pt that will use the new deepwater port.

As the new port will be at least 3m deeper, it will be able to handle the new breed of super container vessels.

Port of Tauranga is already handling around three million tonnes of logs each year.

Chairman Fraser McKenzie said there were synergies between the two ports that they would be able to exploit and the Commerce Commission had given its clearance.

A KPMG study found ports could save money by working together.

The partners will jointly finance the new port project through $15 million each in cash and the balance by debt.

Construction is expected to start as soon as the joint-venture arrangements are settled, including a strategic throughput contract.

Originally, the project was conditional on at least 75 per cent approval from shareholders at the Northland Port Corporation's annual meeting in July.

The port company said the joint-venture agreement meant shareholder approval was no longer necessary, but it would still seek their "endorsement" at the meeting.

The likely impact on Northland Port Corp's earnings will be included in the annual report due out next month.

Both joint venture partners are predominantly local government owned.

Port of Tauranga is 55.3 per cent owned by the Bay of Plenty Regional Council while Northland Port is 72.3 per cent owned by the Northland Regional Council.

Their main competitor is Ports of Auckland.

Ports of Auckland's communications manager, Karren Beanland, said that the joint venture would have little impact on the company as it pulled out of the logging trade several years ago.

Northland Port Corporation has already spent more than $5 million gaining resource consents during the past five years.

Fletcher Construction has been named the preferred contractor and the new port is expected to open within two years.

The new port is necessary because silt limits the existing Whangarei port's life span.