OPINION: The idea of building a swept-up dedicated facility at the Lyttelton port to serve cruise liners is an attractive one.
In addition to the fact that the Lyttelton Port Company says that as its other shipping activities grow it has an urgent need for one anyway, a new, modern facility providing a good first impression for visitors to Christchurch and the wider region is certainly worth serious consideration. The port company has so far, however, not been able to persuade others who would have to put some money up to pay for it that the proposal is financially worth-while. Since they are the ones who would most benefit from the project, it suggests that some of the claims made for it may not stand up under closer scrutiny, at least not in the present financial climate.
Although the port company's idea made it into the top 11 in the Canterbury V5 competition to find potentially viable development projects within the region last year it was not one of the four winners. In its application for the competition, the port company said its aim was to position Canterbury as a premier destination for cruise lines in New Zealand with an infrastructure project designed to be sufficient for 50 years. Presumably the judges felt it fell short, in comparison with its competitors, on one of the required criteria, including having a sound business case and the potential to generate $100 million revenue over five years and $1 billion over 20 years.
The port company said this week that the project would cost $25m. After talking with the Christchurch City Council, which owns most of the port company, the Canterbury Development Corporation, central government and other parties and making no headway in getting funding for the project, the company is now considering a levy of $4.95 on each visiting passenger. There is nothing objectionable in that idea, and the sum is so small as to be almost negligible in the context of cruise-liner fare, but that kind of money will not come anywhere near paying for the project.
The difficulty for the port company is that any benefits of such a facility will accrue not to it but rather to enterprises elsewhere who will profit from more visitors, if the project does, in fact, produce them. No matter how nice a passenger facility might be, the plain fact of the matter is that passengers rapidly pass through it. There is not much opportunity for money to be made from them apart from providing an efficient transit point.
Christchurch International Airport Ltd, another entity largely owned by the Christchurch City Council with a small part owned by the government, is spending vast sums upgrading its facility. Its case is very similar to that of the port company. The airport, too, may not necessarily benefit directly and in strict financial terms the investment may not be fully made out, but the aim is to provide a gateway to Christchurch and the South Island. Given the importance of air travel, there may be a valid economic case to be made for an expansion of the size that is being undertaken.
If a compelling economic case can be made that a better facility will increase the volume of traffic at the port above what would occur in any event, then the port company will deserve to win financial support for it. But money should not be put into it simply because it would make an attractive building on the waterfront.
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