Our port must very soon start to invest heavily in its own growth if it is to continue to enable the success of Hawke's Bay.
It needs to start building a new wharf at a cost of around $142 million and construction will need to begin in a little over one year. The Port is currently seeking the required consents to enable its construction and has run an extensive community engagement process and published hundreds of pages of documents to support its application and demonstrate the need for this investment.
Now it's the regional council's job, as the owners of the port on your behalf, to engage the local community around the need for very significant investment in our port, and the best way to pay for it.
During the past 12 months, the regional council has been undertaking detailed and thorough research to determine how best to fund our port's growth. That research has been made public and last month we committed to thorough engagement with the people of Hawke's Bay later this year.
Currently the port is running hard up against its limits. Ships are getting larger and the port is turning away requests to visit from ships which are too big for our wharves.
Likewise, every year the port is turning away approximately seven cruise ships because it simply doesn't have the space. That's 16,500 tourists and $3.5m of related spending not coming into our economy every year.
The port is now becoming very congested, which is starting to impact efficiency. Ships are having to be moved from berths to enable others to move in and out.
Doing nothing will see the decline of our port, reducing its competitiveness, negatively impacting the Hawke's Bay economy and ultimately costing jobs at the port and across Hawke's Bay. The regional council is not prepared to let that happen.
So what are we going to do about it – in particular, how are we as a community going to pay for it? On latest estimates, it is likely the port's going to need to invest several hundred million over the next decade to enable it to grow, accommodate the vessels that want to come here and continue to support our economy.
The port can't prudently borrow to fund all this growth on its own and any funding from the regional council would require borrowing which would directly impact rates.
We are grappling with an issue faced by many local authorities around the world. How do we pay for major infrastructure investment, retain majority community ownership of core assets and manage investment risk more effectively for ratepayers?
We've publicly committed to running a robust community engagement process on these questions – most likely in October. Through this process we will set out the options, including a preferred regional council option.
I encourage you to start thinking about these issues now.
We know there is a deep connection to the port right across our region, from Central Hawke's Bay to Wairoa.
I want to be crystal clear on this point: the regional council is unanimous that doing nothing is not an option and majority community ownership of the port must be protected.
There's a balancing act here and big decisions will need to be made. The regional council will take these decisions – as this is what it is elected for – and you should hold us to account for engaging with you clearly and giving everyone the opportunity to be heard on this important issue for the future of Hawke's Bay.
Napier Port is vital to Hawke's Bay's economy. We need to decide as a community how we enable it to grow.
* Rex Graham is chairman of Hawke's Bay Regional Council
