‘It’s like a train crash in slow motion’: Frustration over wait for court decision on Port of Tauranga

Andrea Fox

25 Oct, 2023

Port of Tauranga handles most of New Zealand’s exports. Photo / George Novak

Dismay is growing in the export, infrastructure and sharemarket sectors over the Environment Court’s continuing silence on its decision over the Port of Tauranga’s container terminal extension bid.

It’s been eight months since a long-awaited hearing on the project, which has been challenged by 11 local iwi and hapu groups.

The NZX-listed port, 54 per cent owned by the Bay of Plenty Regional Council, made its final submissions to the court in April. The Environment Court states that it aspires to issuing judgments within three months of final submissions from parties, although sometimes it can’t achieve this due to pressure of work.

The court did not answer the Herald’s inquiry as to the reason for the delay, saying only that involved parties can contact the court if concerned.

“It’s like a train crash in slow motion before our eyes from the country’s perspective,” said Mike Knowles, chairman of the New Zealand Council of Cargo Owners.

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“It’s very frustrating and concerning. Port of Tauranga is the country’s largest export port. This whole thing is about productivity.

“We have a new government coming in and they want to double exports – how is that going to happen if we haven’t got an efficient port sector of which Tauranga is the jewel in the crown?”

The port, New Zealand’s biggest and busiest, has waited nearly five years to get its resource consent application for the container berth extension to the Environment Court hearing stage.

The country’s main export gateway expects to run out of container terminal space within two years without the green light for the project, the cost of which after continuing regulatory and hearing delays has ballooned from $68.5 million in 2018 to an anticipated $90m today.

Even if the court judgment came out by Christmas, an appeal by either side is widely expected. That could take another year or two. Construction and associated work will take more than a year.

Eleven iwi and hapū groups associated with the greater Tauranga Harbour raised “unresolved concerns” about the port and its plans with the court, citing significant adverse effects on the coastal environment, marine species and diversity, and cultural values.

Infrastructure New Zealand chief executive Nick Leggett hoped a fast-track option for the project might be considered by the new government.

“Tauranga is a powerhouse of our economy and it must be unshackled by the incoming government to be allowed to grow in a manner that supports New Zealand’s wider prosperity,” he said.

“It’s very clear that there is a consenting challenge here with unacceptable delays that reduce clarity for the infrastructure sector to be able to plan and deliver.

“We are hopeful that a fast-track option might be considered by the new government and that a reconsideration of the planning process that leads to delays like this is also considered, to improve the ability of the country to better deal with its growth challenges.”

Leggett said National’s announced roading policy to remove State Highway 29 choke points would also significantly assist the success of the port’s project.

“These projects cannot be viewed in isolation and will be integral to New Zealand’s future growth.”

Craigs Investment Partners senior research analyst Mohandeep Singh said the uncertainty was keeping away potential investors “who gravitate to infrastructure assets for their reliability and certainty”.

Singh, who in August expressed concern the decision delay was “not helping” the port’s share price, said investors who put their money to work in large, stable infrastructure assets wanted “some certainty around the core of the business”.

“At the moment, they don’t have line of sight for a key part of New Zealand’s infrastructure. You’ve got a capex (capital expenditure) programme around the berth extension and you’ve got capex around an automation project which relies around that extension to some degree. Without those falling into place you don’t really have certainty over the runway for a decade or so, which is the kind of time horizon you would expect for investing in these types of business.”

Singh said the port’s business target of significantly reducing emissions by switching from diesel-electric straddle carriers to new electric automated straddles was also being impacted by the delay.

“This is a key part of the next decade-plus of the port’s growth,” Singh said.

New Zealand’s largest supply chain collaboration, Kotahi, said the Tauranga port berth extension was a “critical” component in ensuring New Zealand’s port infrastructure was able to sustainably handle cargo demand in line with anticipated export growth.

Chief executive David Ross said the export group was concerned about port infrastructure capacity and resilience in the next two to three years.

Founded by dairy giant Fonterra and Silver Fern Farms to create a sustainable, secure export supply chain to help New Zealand become globally more competitive, Kotahi has long-term strategic commitments with the Maersk shipping line and Port of Tauranga in a bid to attract larger, more efficient ships to New Zealand.

“With the expected growth in sectors like horticulture, there is a high likelihood there won’t be sufficient export port capacity in the Upper North Island,” Ross said.

“If the (Tauranga port) extension doesn’t go ahead, it will impact New Zealand’s ability to get our export product to market, as well as the vessel schedules on our coast.

“We’ve seen it in our recent history – insufficient port capacity delays product getting to market and increases the likelihood New Zealand exporters will be paying higher shipping costs, associated with the cost of disruption. This really won’t help exporters stay competitive on the world stage.”

The port is seeking a 35-year consent. It applied to the court for consent to dredge up to 1.5 million cubic metres from the Stella Passage, 50 per cent or 850,000cu m of which is already consented.

It also wants to construct up to 385m of berth at Sulphur Point with a 1.8ha land reclamation, and to build berths at Mount Maunganui, stretching 530m north and 388m south of the existing tanker berth, with a 2.9ha reclamation. In its April final submission to the court, the port reduced this from 2.9ha to 1.77ha at Mount Maunganui.