Port caught in a storm

00:00, Jan 27 2014
tarakohe map
WHICH WAY FORWARD: Port Tarakohe in Golden Bay photographed from the Abel Tasman Memorial

Port Tarakohe's fifth development plan could be the last chance the council, the industry and the community have to get it right. Helen Murdoch reports

Port Tarakohe users have one thing in common - none of them are happy with the port's latest development plan.

Golden Bay's aquaculture industry is the dominating factor as the Tasman District Council grapples with which way to go with the port, which it has reported as being $2.75 million in debt.

tarakohe map

Aquaculture could, potentially, increase by an additional 1959 hectares from its current 1654-ha of operational and consented spat catching and marine farms - growth that would transform the port from a mangy goose to a golden egg.

The deep harbour port was purchased by the council in 1994 from the former Golden Bay Cement Company and features a main concrete wharf and a condemned old timber wharf.

Post-purchase, regular financial reports to the council were made public until about eight years ago when the information disappeared in-house.


About two years ago information not deemed commercially sensitive was again released. The debt was incurred while the port was being managed behind closed doors.

The port's current optimised depreciated replacement value of $12.3 million was used to assess the report's current split of (subsequently) discounted user charges across the groups.

The council's published asset list sets the port's value at a depreciated replacement cost of $10,911,000. The difference is the optimised value sees the port's assets rebuilt to today's needs - rather than what was inherited from the GBCC.

The port's rateable value is $3.6 million, which excludes the wharf and marina and the value of the seabed and foreshore. The port will be revalued in June.

The latest report is based around getting at least 7 per cent return on the $12.3m value, plus paying off the debt - an accounting focus which is questioned by many players.

Recommendations including shifting the boat ramp from its current deep-water site, increasing compulsory user fees, restricting parking of recreational vehicles, replacing or removing the old wooden wharf, possibly adding another marina and fishing platform outside the western breakwater, extending the southern end of the port and reclaiming more land for port purposes.

It also queries the seismic stability of the iconic "hole in the rock" through which the road to Ligar Bay passes and asks the council to identify a legal road which bypasses the port.

Golden Bay Community Board chairwoman Carolyn McLellan says the port is integral to Golden Bay and has to stay in community hands. "With one road in and out, it is our lifeline.

The latest development plan is not a smokescreen to fully commercialise the facility but a draft document which seeks to cover all options. It will be refined following feedback, she adds.

"But everyone in Golden Bay is anxious about its future. People are twitchy."

The council does not want ratepayers to prop the port up, but the problem is with its historic debt.

"Golden Bay needs the aquaculture industry, but it has to pay a fair and reasonable price like everyone else," said Mrs McLellan.

Bob and Joan Butts, of Port Tarakohe Ltd, own land adjacent to the port. They estimate the plan calls for between $8-$12 million to be spent on upgrades which will essentially only benefit third party commercial users and not the port's current financial position.

Ratepayers have been subsidising the marine farming industry for years, they say.

Mr Butts said in the past for every $40,000 worth of A grade mussel shipped across the wharf the port had only received around $140, or 0.034 percent of wharfage per tonne of revenue.

In November the council raised the mussel wharfage from the previous voluntary $1.05 per metre line levy to a compulsory $4.33.

Mr Butts is concerned about a possible commercial takeover and the new high marina charges for boat owners and says the community and the council can't afford to lose the facility.

"The port is a game of two halves but this report, and the council, is packaging it up as one," he says.

Contractor and port user Merv Solly says the latest development plan was a waste of $38,000 of ratepayer money because it was based on incorrect figures.

"I don't have any problems with my wharfage going up because it had not changed for a while and I'm happy if there is an annual CPI adjustment. And as far as the marine farmers ending up paying more money - that's good, because they have had it pretty cheap so far.

"But I feel sorry for the boat owners - it will be the most expensive marina in the country ."

Mr Solly says all port users worked together well before the council took over its management. The port had been largely built by locals at hugely discounted rates in return for council promises which never eventuated. He says he has now lost faith in the process.

Harbour manager Allan Kilgour says the latest port development plan basically contains excerpts of the previous four but focuses on port profitability.

Mr Kilgour says the marina brings in two-thirds of the port's income while the remaining third comes from the wetfish, dolomite, mussel farmers and recreational boat owners.

"I think it's important the people of Golden Bay submit to the direction of the port. People here are passionate about their facilities. You only have to look at the feedback and ill-feeling of the meetings so far."

Selling the port to commercial interests has always been on the table, he says.

"There is a large player who would like to be formally established on the wharf. Fortunately the council has kept them at bay - but the new report looks at it from a different perspective."

Long-time Golden Bay councillor Paul Sangster says the commercial side should pay for all the port's operation and the recreational aspect has to be better recognised.

He strongly opposes selling the port, saying it could fall into hands of people who do not have the community's good at heart.

"Why would we want to give that away?" he asks

He has little sympathy for marine farmers who fail to pay their wharfage accounts.

"Sorry - if you are running a business you have to pay your bills. If you don't you cannot have your mussels there. They have had a pretty good run for the last 10 years.

"We want mussel farms to happen. We need that employment for Golden Bay - but we can not afford to pay for the farmers to be there. They have to stand on their own two feet.

"I just want to see the port tread water and break even. Continued reports do nothing positive.

"This is the fifth, and that's where all our costs are going. The four other reports went nowhere. What are we trying to do - cripple the company or muddy the waters?

"I want to see the port run by the community. The problem will be easily fixed when the council leave it alone and let us manage it."

Pohara Boat Club commodore Craig Bishop-Everett says the report raises questions over the boat club's future.

Club members are concerned about the future of their clubrooms, which they built on leased land. The report recommends it revert back to the council, and that the club's carpark be moved and adjoining vacant land used for commercial storage.

"My initial reaction to the report was that it was unfair. The more I read it became clear it was ludicrous. I have no faith in the process given the short timeframe for consultation.

The port carried $2.75 million in historic debt because of council mismanagement, he says.

Boat owner and Port Tarakohe marina member Chris Charlton says the situation is symptomatic of the council's inability to build relationships, its reliance on "magical" accounting and arrogance in believing that recreational users should cover the costs commercial users do not.

"Half the fees are coming from the recreational sector and we have been told we will be charged more if the commercial sector doesn't pay."

The port offers immense opportunities and would be easy to manage using a mix of commercial, recreational, local and independent input.

"I think Tasman is struggling as a council. They have an inability to bring people together. Right now it is about wedging recreational users out so they can get mussel boats in.

"The mussel industry is going to grow and they have had years to plan for it.

"I'm not against the mussel industry. But the council needs to provide for the mussel industry while not ignoring the importance of the recreational sector.

"The port's a wonderful resource - it's a pity the council is clouding the issue."

Mayor Richard Kempthorne says part of the aim of the report is to establish legal port accounts which stood up to scrutiny.

The council stopped the port's ratepayer subsidy last June and wants to develop a five-year plan which will take it to financial self-sufficiency and make a return of around 7 per cent. The process would be closely monitored, he says.

He acknowledges the new charging regime would make the port expensive and accepts the council's management of the port has not been cohesive but says much of the current criticism is based around misinformation and concern around the new charging regime.

Ratepayers would not carry any further port costs and any new work done would be paid for by the beneficiaries through their charges. "And I don't see much call by marina users to spend a lot of money."

The close of submissions to the current development plan will be revised before a "process going forward including commercial and recreational users" was established, he said.

The council will continue to manage and govern the port, he says.

"We have no plans at this stage to sell the port. We have to get to a break-even point and will continue to work with both parties.

"And we are going to do this. We are not maximising its use to sell - but it has to work for everyone."

Corporate services manager Mike Drummond says the difference between the port's initial purchase price and its current $12.3 million valuation is based on depreciated value. "We look at what it would cost to build the port today and then depreciate that based on current age."

Initial fees and charges based around a five-year financial model have been discounted by 40 per cent because staff considered they were too high. Still, they will steer the port towards the point of breaking even and an eventual return to ratepayers, he says.

A growth component has been built into the financial formula to cater for sudden additional capital demands by either sector. Growth-driven capital spending will be paid for by beneficiaries, he says.

Marine Farming Association executive officer Graeme Cootes says it abandoned 13 years of negotiating with the council over line charges because a fair, open and transparent payment process could not be reached.

Marine farmers had offered to build a purpose facility on the location of the old wharf and lease the site from the council - but walked away because it could not reach an agreement.

Rob Pooley has been growing mussels in Golden Bay for 22 years.

"The marine farming industry has always been willing and capable of paying its way on a fair and equitable basis," says the MFA president.

He would only support a Port Marlborough model of payment, where the line levy was set after all costs were taken into consideration. If the farmers put in more mussel lines, the levy came down to achieve the same required return to Port Marlborough.

At Port Tarakohe, farmers pay per line metre, with costs rising if they put more lines in the water.

"There appears to be a total lack of willingness on the part of Tasman to accept us as fair and reasonable contributors."

Apart from a few dedicated berths the industry has seen no new facilities built and continues to struggle with the old concrete wharf, he says.

"And by anyone's standards, the notion they can take a secondhand asset, write it up and demand a return on capital has to be questionable."

Mr Pooley said farmers reacted to the 400 per cent increase in the port levies with a "groundswell of disbelief and discontent".

"I can only say we have been transparent and more than willing to pay our way. We are somewhat gobsmacked at how the council feel this is remotely the answer. The industry is not going to accept what is being foist upon us."

Rumours farmers have failed to pay line levies were just that. "Every marine farmer operating in Golden Bay has paid their way on the voluntary line levies."

Mr Pooley said there was impending industry expansion which had to be catered for.

"It's just unfathomable where the council's logic is."

He "totally rebutted" claims that major industry players are moving to take over the port.

"In the event of the council selling the asset it should not be a surprise that the larger players show an interest - but no-one has the right to comment on their business dealings."

Andrew Talley, of Talley's Fisheries, says he has not studied the report in detail and has no comment.

Talley's Fisheries Group owns the former GBCC office site on the other side of the Ligar Bay road, where they had proposed to build a factory, hold a lease over the area of the port where their ice tower is located and occupy a section of the port's main wharf.

Public feedback on the plan closes on January 28.