Napier Port’s ‘predatory’ proposal to build a new ferry terminal at CentrePort’s container wharf in Wellington has resurfaced as a potential solution for Winston Peters.
The future of Interislander’s ageing fleet hangs in the balance as Peters, the new Minister for Rail who is now in charge of delivering the new ferries, is on the hunt for a better option than the one Finance Minister Nicola Willis has put on the table.
Dawson has said it would be a good option to build a new ferry terminal at CentrePort’s Thorndon Container Wharf, which is close to the inner harbour, because it was recently strengthened after the 2016 Kaikōura earthquake.
“You’ve effectively got Wellington’s container business sitting on top of an opportunity that could significantly reduce or resolve the cost of the inter-island ferry solution.”
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A spokesman for Peters said last week that the Minister had no view on the proposal as he had not seen it.
Asked whether Napier Port intended to submit the proposal to Peters and whether this could be the solution he was looking for, a port spokeswoman said they had nothing further to add.
Peters is keen on rail but the problem with rail-enabled ferries is that the portside infrastructure needed to support them is expensive.
The previous plan to replace the Interislander ferries with two mega ferries suffered huge cost blowouts due to the landside infrastructure, including managing seismic risks.
News website Politik has recently reported the Napier proposal was now attractive because it offered what is likely to be a much cheaper option for rail-enabled ferries.
Prebble argued that the Government should issue a national container port strategy.
“Start by ordering the closure of the Wellington container terminal and requiring Napier Port to pay the cost.” A report by Infometrics, commissioned by Napier Port, found it was difficult to determine CentrePort’s container revenues but noted container volumes had not recovered to what they were before the 2016 earthquake.
Dawson said CentrePort’s container trade could be redistributed and contested by other ports around the country, including Napier.
“Although we have the capacity to accommodate more container trade, we don’t assume that outcome and it’s not our primary motivation for raising this discussion.
“When you’re part of an industry and see things can be done better, you need to put your hand up.”
GWRC rejected the proposal and council chairman Daran Ponter called it predatory at that time.
Ponter said the port had not been approached about this latest version of the proposal.
He said it would “strip CentrePort of its container traffic and that would have significant implications for the regional economy.”
“But either way, I don’t see the Government making such an extreme move.”
Special legislation, potentially similar to the Public Works Act, would probably be required to take over the wharf, he said.
If that were to happen, there would have to be compensation for taking the asset, which would be an undesirable additional cost to the overall ferry project, Ponter said.
CentrePort chief executive Anthony Delaney said there have been initial discussions with Treasury about how the port’s existing infrastructure could potentially be used to provide a cost-effective solution.
“While we have not seen the specific detail of Port Napier’s proposal, we have previously investigated such options with KiwiRail.
“These options affected our wider port operations, were costly, and the timelines to develop would be beyond current expectations.”
Privatisation of ports not on the table
Willis said the Government has engaged with the ports on either side of Cook Strait and conveyed the expectation they meet as much of the ferry portside infrastructure costs as possible.
“The port, as the owner of the assets, should be the first port of call for the funding,” she said.
Both ports are owned by councils. GWRC has a 77% share in CentrePort with Horizons Regional Council owning the remaining 23%.
Port Marlborough is owned by the Marlborough District Council.
Finance Minister Nicola Willis. Photo / Mark Mitchell
Ponter said partially privatising the port to raise capital was not on the table.
“The difficulty about having a conversation about who pays for what is that we really need to understand first what we’re actually paying for and what we’re having to build.”
However, infrastructure for smaller ferries, which the Government is looking at, would be significantly cheaper than what the mega ferries would have needed, Ponter said.
But there would be no free lunch, he warned.
“The port company is a commercial operator and the regional council answers to ratepayers. We can’t have a situation where ratepayers effectively end up paying for what is a state highway one asset.”
If CentrePort paid for the new assets, it would look to claw back that money through the likes of berthing fees for KiwiRail or whoever the future operator of the ferries was, Ponter said.
Marlborough Mayor Nadine Taylor said the council had planned and consulted on raising up to $110 million in debt to help with the cost of the portside infrastructure for the mega ferries.
“Council will now need to assess the new commercial proposal as it makes decisions around the necessity of any further consultation for financing,” she said.
“Council does have the debt headroom to enable borrowing to be sourced through the New Zealand Local Government Funding Agency and on loaned to Port Marlborough but the dollars and cents must make sense for all parties.”
However, the Aratere - the only rail-enabled ferry in the fleet - may need to be retired as early as next year.
This is because construction needs to start on new portside infrastructure at Picton before the existing facilities also reach the end of their working life in 2029.
The current thinking is that the most suitable place for the new wharf to be built is where Aratere currently berths.
Interislander's Arartere ferry. Photo / Mark Mitchell
The other wharf used by Interislander is only suitable for its roll-on roll-off ferries which aren’t rail-enabled.
“To accommodate Aratere on the wharf would require the construction of a double level linkspan capable of taking trains, with associated bridging ramp (as is on the current Aratere berth), reconfiguration of the rail lines to berth, changes to fendering, mooring and nesting system,” Port Marlborough chief executive Rhys Welbourn said
Exactly when construction on a new wharf would need to start depended on the size of the new ferries, Welbourn said.
“The ship’s specification is the major determination of the type of structure we build.
“In simple terms the larger and more specialised the vessel, the larger and more specialised the port infrastructure needs to be which adds to the cost and time to the construction programme.”
The more the construction site could be isolated from other operations continuing at the port, the safer, simpler and quicker it will be to construct, Welbourn said.
Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.
