The mega ferries were left dead in the water after costs ballooned to almost $3 billion. This escalation was not driven by the ship-build but rather by the associated portside infrastructure, including a new terminal in Wellington.
It’s this infrastructure that is now fuelling tension between the two ports.
In an exclusive interview with the Herald, CentrePort chairman Lachie Johnstone said the port was looking forward to the Government deciding so it could “get on with it”.
Johnstone discussed what he described as a “self-serving” proposal from Napier Port amid the mega ferry fallout, a recent visit from Finance Minister Nicola Willis and the future of CentrePort.
What is Napier Port’s proposal?
Napier Port chief executive Todd Dawson has discussed an idea with Government ministers to build a new ferry terminal at CentrePort’s Thorndon Container Wharf, close to the inner harbour.
The mega ferry terminal was going to be built further north at Kaiwharawhara. KiwiRail bosses have previously blamed part of the project’s cost blowout on managing this site’s earthquake and flood risks.
Napier Port chief executive Todd Dawson has discussed an idea with Government ministers to build a new ferry terminal at CentrePort’s Thorndon Container Wharf.
Dawson said CentrePort’s container wharf would be a good alternative because it was recently strengthened after the 2016 Kaikōura earthquake.
“You’ve effectively got Wellington’s container business sitting on top of an opportunity that could significantly reduce or resolve the cost of the inter-island ferry solution.”
A report by Infometrics, commissioned by Napier Port, found it was difficult to determine CentrePort’s container revenues but noted container volumes had not recovered to what they were before the 2016 earthquake.
Dawson said CentrePort’s container trade could be redistributed and contested by other ports around the country, including Napier.
“Although we have the capacity to accommodate more container trade, we don’t assume that outcome and it’s not our primary motivation for raising this discussion.
“When you’re part of an industry and see things can be done better, you need to put your hand up.”
‘Self-serving’ but not surprising
Johnstone had not seen the proposal but described it as laughable.
It would cut CentrePort’s container operation in half and was “self-serving”, he said.
Dawson has previously rejected the suggestion by GWRC chairman Daran Ponter that Napier Port may have invested too much money for the amount of container traffic it was going to service.
The World Bank’s Container Port Performance Index ranked CentrePort’s container operation as the most efficient in Oceania. Photo / Mark Mitchell
Johnstone said CentrePort took Napier’s 2020 proposal seriously.
“We reflected on it and we elevated it to our shareholders. They made a unanimous decision to reject it.
“From our perspective, it’s finished.”
Asked whether it was frustrating that Napier appeared to be using the Cook Strait ferry saga to have a second crack, Johnstone said it wasn’t surprising.
“The volume that we have coming through Wellington, we believe would be of significant value to Napier, hence why they approached us in the first place.”
Johnstone said CentrePort had the benefit of knowing what the counterfactual was.
They reported up to 800% increases in the cost of doing business, Johnstone said.
Many of the big players had 12 months of business interruption insurance.
“They made it very clear to us that if we were not back in business within that 12-month period, that would have a material impact on their businesses and therefore the economy within the region,” he said.
Johnstone also noted the World Bank’s Container Port Performance Index ranked CentrePort’s container operation as the most efficient in New Zealand for the past three years running as well as all of Oceania this year.
A sense of deja vu
Johnstone said the Future Ports Forum had already identified Kaiwharawhara as the preferred site for a new multi-user ferry terminal.
Independent advice informed the decision and earthquake risk was a key consideration, he said.
The group’s partners included the city and regional councils, CentrePort, the New Zealand Transport Agency Waka Kotahi, KiwiRail and its rival ferry operator Strait NZ.
CentrePort board chairman Lachie Johnstone at the port’s office in Wellington. Photo / Mark Mitchell
The group investigated locations across the region a second time at the request of KiwiRail but came to the same conclusion.
One of the reasons the Kings Wharf proposal was rejected was because it would pull passengers, cars, trucks, and trains back into the heart of the city, Johnstone said.
“You’d have all that commercial or industrial activity right outside your front window and large ships manoeuvring in and out of the wharves right in front of the amenity space of the waterfront.
“The residents of Wellington quite rightly didn’t like that.”
Johnstone said this reflected the life cycle of ports globally.
Cities originally built around ports often lost their connection to them and residents didn’t necessarily want industrial activity so close.
CentrePort has already migrated away from central Wellington through land reclamation and it made sense to continue that shift with a new multi-user ferry terminal for Interislander and Bluebridge at Kaiwharawhara, Johnstone said.
All eyes on the Government
Johnstone was looking forward to the Government announcing a decision on what ships would be procured to replace the Interislander fleet.
“The sooner those decisions are made, the sooner everybody has some clarity, the quicker we can get on and build some fit-for-purpose, affordable infrastructure that meets the needs of New Zealand because this is a national supply chain asset.”
CentrePort was in discussions with Treasury around commercial models and Finance Minister Nicola Willis visited the port earlier this year, he said.
“We took her on a tour and shared what we believe the challenges were and also impressed upon her the need for some decisions so that we could get on.”
Johnstone said they would need to consider how the ships interfaced with the road and rail network and the land required to accommodate the likes of marshalling areas.
“Under the Future Ports Forum, a lot of work was done in this space considering options. Much of that work can be pulled out of the bottom drawer and used to accelerate some activity once a decision has been made.”
Prime Minister Christopher Luxon has promised an announcement on the Government’s plan by the end of the year.
Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.
