Buy port for keeps, unions tell city

Two maritime port unions have come out against Christchurch City's plan to sell nearly half of Lyttelton Port to Hong Kong's Hutchison Port Holdings.

In the takeover bid, Christchurch City's investment company will pay $2.10 a share for the 31 per cent port stake it does not already own.

If it gains control, the city will then sell a 49 per cent stake of the assets to Hutchison.

The deal will also see Hutchison take a controlling stake in the newly created port management company.

The Maritime Union and the Rail and Maritime Transport Union said yesterday that Lyttelton Port should remain in local hands.

"The deal has the potential to destabilise the maritime industry in New Zealand," said Trevor Hanson, general secretary of the Maritime Union.

"Hutchison could use their international clout to provide business advantages for Lyttelton that other ports don't have."

Hutchison has interests in 41 ports in 20 countries and is a unit of Hutchison Whampoa controlled by Li Ka-shing, one of the world's richest men.

Hanson said South Island ports such as Port Chalmers and Timaru were most at risk of losing lucrative container business to Lyttelton.

Wayne Butson, general secretary of the Rail and Maritime Transport Union, called the deal "short sighted" and said it could have serious repercussions for the economy, as it would place the country's export trade outside local control.

"The consolidation of ports and shippers into a few overseas operators could see importers and exporters faced with price hikes," said Butson.

The unions propose that Christchurch City buy the port, but keep it locally owned.

Hanson admitted there was little the unions could do to block the deal, given that they could only strike during contract negotiations.

Lyttelton workers' contract does not expire until 2008. The city has said that no employment agreement will be affected by the takeover.

Meanwhile, investors and analysts have called the $2.10 a share price - which values the port at $214 million - too low.

Lyttelton Port shares have been trading at a premium to the bid price, closing at $2.21 yesterday.

Goldman Sachs JB Were estimated a fair price to be between $2.26 and $2.57 a share.