New port may draw investors
The Social Infrastructure Fund linked to Infratil could be interested in investing in the Clifford Bay project, Infratil executive Tim Brown says.
The Government announced last week it will set up a team of officials and private sector experts to do more work on the proposal to move the interisland ferry port from Picton to Clifford Bay, south of Seddon. This is the strongest indication yet the Government wants to stand up the proposal, first floated in the 1970s and again 18 months ago.
Transport Minister Gerry Brownlee said Cabinet ministers believed the business case was strong enough to look more closely at the viability of moving the port.
The latest estimate of developing the port has increased from $220 million to $422m.
Mr Brown, who is head of capital markets and economic regulation at Infratil, said on Friday the project was likely to be funded through a public-private partnership deal.
"That's not really us. The rates of return for these sorts of partnerships tend to be low.
"They de-risk it for investors. The flipside of that tends to be low returns."
However, the Infratil-linked Social Infrastructure Fund would "certainly be interested" in those sorts of projects, he said.
A lot of work had yet to be done and the fund was unlikely to put its card on the table early. It would be a Government-run project and that brought complexities, he said.
Port Marlborough chief executive Ian McNabb said Mr Brownlee had visited him last week to tell him about the development.
He "wouldn't necessarily say" the Government was keen to see the project happen, but they saw there were some benefits "from a national point of view", Mr McNabb said. "But the issue is clearly what's the financial benefit of a public-private partnership operation. I think that's a bit of a challenge."
Income from ferry port charges was probably less than $7 million a year from both Interislander and Bluebridge, he said.
"For a $400 million spend, you have to get more than that."
However, Mr Brown said not all projects "washed their face" on an investment basis, particularly those in national infrastructure business. Transmission Gully and the expressway north of Wellington were examples of that.
"Clifford Bay may well be one of those. It's good for the nation, but that's not necessarily captured on cost-benefit analysis."
Voter views might have an impact.
"Very few people are going to vote against a party because they don't like Transmission Gully. But a few hundred may vote for it. That might make a difference here."
Mr Brownlee said the potential shift would be a chance for Picton to build itself into a tourism destination similar to Queenstown, but many Picton people doubt that.
Mr McNabb said there was little chance of attracting a new passenger-only ferry service from Wellington to Picton if the Interislander and Bluebridge services shifted. Both services made more money from freight than passengers.
Buildings and docks at the Picton ferry terminal would probably be ripped out if the port shifted to Clifford Bay, he said.
The Marlborough Express