Port shift could raise costs

03:00, Nov 07 2012

Freight companies could face hefty increases for crossing Cook Strait if a new port at Clifford Bay was backed by private investors, Pacifica Shipping chief executive Steve Chapman said yesterday.

The $422 million estimate for building the terminal, plus additional costs for support infrastructure, would have to be recouped through user charges within a commercially acceptable timeframe, he said.

The Government has appointed a team of officials and private sector experts to test the "strong" business case to move the interisland ferry port south from Picton to Clifford Bay. It is to report in April next year.

If the Government did not take an ownership role, the full cost of the venture would have to come from freight companies and passengers, Mr Chapman said.

"With some half a billion dollars committed to the project, commercial investors would expect at least a 5 per cent annual revenue stream from its ferry operating customers. At this rate it would be significantly greater than current port charges incurred at Picton by the two major interisland shipping companies."

Faster and more frequent sea freight services "inevitably" resulted in users paying a premium, he said.


To prove its case economically, the new port needed to deliver exceptional transport efficiencies and substantial operational cost savings. Simply cutting an hour between Wellington and Christchurch and saving a relatively small amount of fuel fell far short, Mr Chapman said.

Time-sensitive freight could be carried by ship between Wellington and Lyttelton on two-way overnight services.

"While no such services currently exist, they could be easily re-introduced at already established ports for a small fraction of half a billion dollars, or more."

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