Tauranga choice for big ship spending

Photo / Bay of Plenty Times

Tauranga is the logical choice ahead of Auckland for investment to handle a bigger breed of ship, says a group of New Zealand's biggest exporters.

A report yesterday by the New Zealand Shippers' Council - which also represents importers - said that if some ports were not capable of handling 7000 twenty-foot equivalent unit ships within five years, there was a risk shipping companies might increasingly hub through Australia.

Council chairman Greg Steed urged all those involved in the supply chain to consider the report's findings and recommendations extremely seriously.

"It is imperative to the future security of New Zealand's export trade [that] the country becomes capable of accommodating bigger ships as soon as possible."

All four major container ports of Auckland, Tauranga, Lyttelton and Otago could handle ships in the range of 4500-5000 TEU and would need to increase capability to support projected cargo growth, the report said.

However, not all four ports would need to invest initially, and it was logical for two to invest to become 7000 TEU capable within five years - one each in the North and South Islands.

Tauranga and Lyttelton were the logical candidates to start exploring implementation of capital plans.

Under the scenario, Auckland and Otago would continue to play a vital role in servicing exports and imports, the report added.

Ports of Auckland managing director Jens Madsen said the report did not hold any fears for the company.

"The work that they have done is to be appreciated by a lot of different parties, and it's always nice to be challenged. We feel that we are in control of future capacity. We can accommodate ships that are much larger than what we currently have ...

"At fairly short notice we would be able to do additional dredging in the shipping channel from Rangitoto."

Port of Tauranga chief executive Mark Cairns said it was time for New Zealand to make some tough decisions on infrastructure investment to ensure exporters remained competitive globally.

An application to widen and deepen Tauranga harbour's shipping channels was about to be considered by the Environment Court following a recommendation from Environment Bay of Plenty to grant the resource consents.

"We have board approval to commence the first stage of the dredging project as soon as we have resolved the appeals," Cairns said.

The Shippers' Council report said Ports of Auckland was the natural location for the North Island's initial bigger-ship port based on cargo volumes, but the council did not have confidence it was able to become 7000 TEU capable within five years.

The investment required at Port of Tauranga was between $50 million and $80 million, compared with $200 million at Auckland, the report said.

Investment decisions at Ports of Auckland were likely to be stalled by political issues surrounding Super City governance and organisational structures, and whether port operations on prime waterfront real estate were the best use of the space.

HIGH STAKES

THE ISSUE
If some ports cannot handle 7000 twenty-foot equivalent unit ships within five years, shipping companies might hub more through Australia.

THE RISK
$194 million a year increased cost faced by exporters and importers to send product via Australia if the level and quality of services to Southeast Asia is lost.

THE BENEFIT
$144 million-a-year potential benefit from 2015/16 with bigger ships on Southeast Asia route and two ports able to handle 7000 TEU vessels.

WHAT NEXT
Analysis and research says it is logical for Tauranga and Lyttelton to explore investing for the bigger ships.