Port boss defends maintenance

01:06, Sep 19 2013
Southland Times photo
South Port chief executive Mark O'Connor.

South Port chief executive Mark O'Connor replies to letters suggesting neglect of its assets.

I write in response to two recently published letters from Bluff residents Brent Procter and Steve Mitchell (who are both running for election to, respectively, the Bluff Community Board and Environment Southland).

These correspondents have made factually incorrect statements over the Bluff Town Wharf and South Port's mode of operation.

Mr Mitchell alleges in his letter that there are "considerable pollution issues at the port". That is untrue in relation to South Port operational activities. The port operates strictly in accordance with a discharge agreement and a multi-party code of practice which ensures that it functions in an environmentally sustainable manner in terms of the water quality in the harbour.

The other correspondent, Mr Procter, claims that the Bluff Town Wharf is "a vital community asset" needing corporate funds to have it restored, while Mr Mitchell states that Environment Southland is a "port authority" and implies this entity is allowing the port assets to be neglected to secure additional dividend income.

South Port's infrastructural assets are made up of: The 40-hectare Island Harbour (its main cargo operational area).


The Tiwai Wharf (provided on a long-term lease basis to New Zealand Aluminium Smelters).

The now partly used Town Wharf.

Several Southland Times subscribers may be aware that, before the construction of the Island Harbour in the 1950s, the Town Wharf was effectively the sum total of the Bluff Port infrastructure. Today, only the east end, or about half of this facility, is used solely for petroleum-related cargo. In addition, the southern aspect of the non-cargo operating west end of the Town Wharf is provided to several fishing vessels for berthing purposes. Both operational parts of the wharf are maintained to service their users' needs in a safe and environmentally responsible manner.

What can be factually stated about the non-cargo operational west end of the Town Wharf is that it:

No longer serves a commercial function for cargo transfer.

Has been appropriately maintained to ensure that both safe access and recreational fishing are achievable.

Would cost several million dollars to demolish this area of wharf structure.

Would require an extensive and costly Resource Management Act process to re-establish an equivalent structure at some point in the future (should this be deemed necessary). It is worth noting that leaving an appropriately maintained structure in place protects right of access and any future potential use of the wharf area.

South Port takes seriously its responsibility to maintain all the assets under its direct control. However, the level of maintenance applied to various assets is influenced by the commercial use of those assets, plus any health and safety and environmental implications. The port company spends more than $1.3 million annually on maintaining its wharves (excluding any capital expenditure). In relation to this repair and maintenance spending, $146,000 was out laid on the Town Wharf in the last financial year, $280,000 in the previous year and a budgeted amount of $170,000 is provided for the current year.

What your correspondents have failed to come to terms with is that the former Southland Harbour Board, which was a port authority and in effect operated community assets, ceased to exist in the late 1980s. South Port is an NZX-listed corporate entity governed, like all other New Zealand ports, under a primary objective set out in the Port Companies Act - that objective being "to operate as a successful business".

Business success is now measured not only in financial terms, but includes social and environmental obligations. I am satisfied that the maintenance of our wharf assets and the overall operation of our business is consistent with this wider interpretation of our statutory objective.

Although Environment Southland holds 66.5 per cent of shares in the company, it is only one of about 800 shareholders to which the board and management are accountable.

The company also has good reason to be proud of the level of capital reinvestment that its directors have approved over the past decade. One need only compare a photograph of the Island Harbour in the late 1990s versus the port landscape today to observe the significant positive change that has occurred.

The Southland Times