Business response ominous for port and rail

 Roger Handford

Opinion

The end of the three-month coastal service between Gisborne and Napier raises a number of questions which have not been answered.

In total $2.75 million of taxpayers’ money was spent on this venture, but no assessment has yet been provided on whether it was truly economic.

I note with some concern that the businesses that used the Rangitata are not interested in continuing the service.

Eastland Port’s operations manager Andy Kinsella has been quoted in other media as saying the companies had told him with State Highway 2 reopened, it was easier and more convenient to use roads.

Mr Kinsella said: “They were straight up and said, ‘Look, trucks are going to be far easier for us’.”

The companies told him the door-to-door nature of trucks made them more suitable for the short journey between Gisborne and Napier.

When Cyclone Gabrielle put the highway from Gisborne through Wairoa to Napier out of action, the only road alternative was a nine-hour trip.

Mr Kinsella said the coastal route was off the table for now . . . but could resume “either once the port completed its $60 million wharf rebuild, or in the event of another disaster”.

I believe it is in all of Gisborne’s interests to know this is the position of potential users of the port — and presumably those who might use rail if that ever was resurrected.

One big plus from the coastal trial is that it apparently proved environmentally sound, with ship freight emissions less than 15 percent of comparable road freight.

Port Eastland also got an extra injection of cash towards the wharf project and fitting out the electrics to handle refrigerated containers.

But on the employment and business side, there has been no report on jobs or companies saved from closure — in other words, what actually were the benefits from funding the exercise, and who benefited?

Was it done to ensure meeting contracts and preserving supply reputation — or was it a case of “thanks for the money, we’ll take it and run?”

Claims of success need examination, especially as funding covered leasing the ship, paying for the crew, and fuel and other associated costs.

All up, the ship cost $750,000 a month to operate, for three months, or $25,000 a day.

The ship could carry 32 containers — and at full capacity over its 18 trips, could have transported 576 containers.

It actually carried 294 containers, or just over half of its capacity.

In the cold light of day, this doesn’t seem to me to be enthusiastic support from local business for a coastal service, or for the port.

And as I pointed out months ago, the multiple handling, mixed modes of transport and extra costs are surely a killer for rail or port, unless there is a large quantity of bulk cargo.