PM torpedoes plan to move Navy to Whangarei

A deal offering a previously secret multimillion-dollar carrot to entice the Navy to Whangarei has been rejected by the Government.

A loose but powerful business consortium, including Northland Port Corporation and Fletcher Challenge Building, offered to pay the $165 million capital cost of relocating the Navy base from Devonport, Auckland, to Port Whangarei in return for a $12 million annual rental. A third member of the consortium, property owner and developer Tramco Holdings, would have paid the Crown $250 million up front for prime Devonport land left vacant if the Navy moved north.

Tramco, which among other investments developed and still owns much of Auckland's Viaduct Basin, would then develop the land for residential purposes.

Under the relocation proposal - a closely guarded secret for almost two years until yesterday - the port company would provide the Navy with land for a new base and the use of Port Whangarei. The port company is due to vacate the port within the next two to three years, relocating to its new multimillion-dollar deepwater port at Marsden Pt.

The consortium would organise private-sector funding to build and own the new naval base in return for the millions in annual rent.

The previous National Government said the consortium's $250 million estimate of the value of the Devonport land was optimistically high and the $165 million capital costs to set up a new Whangarei base were under-estimated.

The Coalition also appeared politically frosty to the relocation idea, Prime Minister Helen Clark telling the Northern Advocate this month that "you can't take the Navy out of Devonport."

There was a whole naval community whose lives revolved around the base's location, she said.

The Advocate said yesterday that Helen Clark's comments appeared to have signalled the death-knell for the proposal, which consortium members had spent tens of thousands of dollars researching and promoting for almost two years.

The Government confirmed in Wellington yesterday in a statement on defence spending that the naval base would stay where it was.

Port corporation chairman Mike Daniel said consortium members were bewildered by the political stance. "We mistakenly assumed the careful development of a compelling economic and financially robust reason for the move would be sufficient to persuade the Government to allow further investigation to be carried out at no cost to the public.

"After all, the consortium is signalling a cheque for $250 million to the Government and the provision of a new naval base at Port Whangarei for an ongoing rental of around $12 million a year."

He said the port company itself stood to make very little under the deal. Rather, it was keen to promote Northland's future.

- NZPA

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