Talks continue on port fees dispute

By FIONA ROTHERHAM

Methanol exporter Methanex New Zealand has further mediation talks planned this month with Taranaki port company Westgate Transport over a four-year-old dispute involving more than $8 million in unpaid wharfage fees.

The money is sitting in an independent trust account, awaiting the outcome of talks started last month before an overseas mediator. Neither party will comment on progress.

At issue is the rate Westgate charges the port's single largest customer for handling its methanol exports.

In 1997, Methanex began underpaying Westgate's wharfage charge in a bid to force the port company to give it a special discount because of the high volumes of methanol exported through Port Taranaki.

"What we have here is short payment," said Westgate chief executive Ron Snodgrass. We're trying to recover it."

The port company began legal action against Methanex for breach of contract. Methanex counterclaimed, seeking a declaratory judgment that the wharfage charge was not fair and reasonable due to Westgate's monopoly position in the area.

If mediation fails, the High Court action is scheduled to be heard in the middle of next year. Westgate's wharfage charge since 1988 for energy-based bulk liquids is $2.65 a cubic metre.

In 1996, Methanex proposed applying the base charge for a minimum agreed quantity shipped each year through the port and then paying 10 per cent of the base rate for the rest of its exports.

From January 1997, Methanex began underpaying the charge despite Westgate rejecting its proposal. The difference was paid into the trust account.

Westgate continues to pay its owner, the Taranaki Regional Council, a dividend based on profit that includes the full rate owed. By the end of the June 30 financial year, the money underpaid will be more than $10 million.

The port company applied in 1997 to the High Court for the right to refuse Methanex access to its wharf facilities. The application was thrown out after the court labelled it draconian and drastic.