Port of Tauranga put heat on Lyttelton

Port of Tauranga is putting the heat on Lyttelton Port, announcing a $20 million "inland port" at Rolleston to steer exports and imports to its half-owned Timaru port.

The Tauranga move comes as Lyttelton grapples with congestion problems and six months after Tauranga bought half of Timaru's port for $21.6 million.

New Zealand's second largest port said it was buying 15 hectares at Izone industrial park in Rolleston from the Selwyn District Council to set up a freight hub to receive, pack and distribute containerised cargo.

"It is an inland port like we have in South Auckland," Port of Tauranga chief executive Mark Cairns said.

He wants to rebuild Timaru's container business, which has shrunk to 20,000 containers a year from 80,000 a few years ago.

"Establishing an intermodal freight hub at Rolleston will provide South Island exporters the option to efficiently access Timaru and similarly importers in the Christchurch area will have the option to ship through Timaru," Cairns said.

He expected Tauranga to offer services from the Rolleston inland port later in the year.

Asked would it be cheaper to go through PrimePort Timaru, Cairns said: "I imagine it would have to be otherwise it's not going to be attractive."

Cairns said Tauranga offered a greater range of international services giving customers a lot more choice.

Lyttelton Port chief executive Peter Davie said Tauranga's move was what Lyttelton had expected and had come as no surprise. Lyttelton had an inland port at CityDepot in Woolston.

Davie said Lyttelton, the country's third largest port, offered a "very wide range of international services as well, so that was not an issue from our perspective."

"Really there's no difference in the services that can be made available to the wider world. It's really whether you want to tranship over Tauranga or go directly out of Lyttelton."

Exporting via Timaru and Tauranga meant more handling of the cargo, Davie said.

"From our side we think we offer a competitive proposition. We have to focus on continuing to improve our services, that's where our major focus is," Davie said.

Lyttelton's container traffic has jumped about 30 per cent in three years and Davie said some of that was due to the dairy trade it won off Timaru about four years ago.

Export NZ's executive director Catherine Beard said a combination of speed and price were the main factors in exporters' choice of port. Price was "hugely important", but not the only consideration, because some shipping services might be more direct.

She believed exporters would welcome the competition between Lyttelton and Timaru-Tauranga.

"I guess it's a sign of a booming economy as well (in Canterbury)," she said. Cairns said the date on land purchase agreement to go unconditional was February 28 and settlement was June 30.

He had been asked not to reveal the land price but said by the time Port of Tauranga put the rail spur on the site the total cost would be $20 million. It would stage the construction of the inland hub depending on customer demand.

"We wouldn't be shelling out $20m if we didn't think there was a business case."

There was a lot of potential business from dairy and other primary products exporters in the region.

There would be a rail exchange area to get wagons on and off, and a paved area for storage. A warehouse was planned but that might not be started straight away.

The Press