Brownlee spells out $422m Clifford Bay case

The government today gave its strongest message a new $422 million inter-island port has to be built at Marlborough’s Clifford Bay sooner rather than later.

On the most ambitious timetable the earliest construction of a facility at Clifford Bay could begin is 2016, with completion in 2020.

Transport minister Gerry Brownlee told the Marlborough Chamber of Commerce the Clifford Bay proposal is based on an assessment that time saving for moving freight would have an economic benefit for the country as whole.

Mr Brownlee says by bringing travel times down between major population centres, trade between the North and South islands would be increased, along with increased economic prosperity.

“We have made no decisions, but information to date has suggested we need to further test the viability.” 

He says the case for Clifford Bay has always been held back by the financial costs of developing a new port, which would need to capture enough of the economic gain from its location to show acceptable returns.

The advantages
In a fairly convincing argument Mr Brownlee says a Clifford Bay terminal would cut 30 minutes off the ferry trip between North and South Islands.

The road trip from Wellington to Christchurch would be 50 minutes shorter and the same rail journey would reduce by 80 minutes.

Because of the steep terrain between Picton and Clifford bay, there would be a one-third reduction in fuel burnt when transporting freight by rail to Christchurch.

The shorter ferry journey would mean ships could be more productive, making more journeys. They would also burn less fuel.

The combined time savings would mean a six-and-a-half hour journey between Wellington and Christchurch.

The time saving for rail would be two hours.
 
Important to move freight fast
He says the Cook Strait ferry service carries a large proportion of time-sensitive inter-island freight, so getting it there fast is important.

“Economists have studied this and simply put, the closer you are to your market, the more likely you will trade with that market.”

Mr Brownlee says an efficient transport network is integral to New Zealand’s economic growth and is a vital component in import, export and domestic supply chains. 
 
“The National Freight Demands Study concluded that freight volumes will continue to grow; and that it is unlikely there will be a significant market shift to coastal shipping.

"Cook Strait ferries are therefore vital to moving freight, regardless of where they land.”

Why something must be done
While saying no decision has been made about moving the terminal, Mr Brownlee made it clear there will be future costs in maintaining the cross-strait link.

“There is no do-nothing option,” he says.

“If Clifford Bay doesn’t go ahead then over a relatively short time Picton will need to have improved wharfage and handling facilities.

"The capital expenditure would fall on the Marlborough District Council as owners of the Ports of Marlborough.”

He says if freight demand increases as predicted over the next 30 years it will place great pressure on the existing infrastructure of the inter-island link.

Freight demand increasing
It is expected freight demand on the Cook Strait link will increase broadly in line with national freight demand growth, placing increasing pressure on the existing ferry capacity.

“Speed restrictions through the Marlborough Sounds limit the number of return sailings ferries can make each day.

"Two of the ferries have ‘grandfathered’ speeds – meaning they do not have speed restrictions – and can complete three return trips a day.

"That fleet is nearing the end of its economic life and will need expensive replacements.

"And replacements are going to be harder to find, as internationally rail ferries are rapidly falling out of favour with operators.

"Larger, faster ships are becoming the norm.”

But he emphasised that if the route stays the same those replacement ferries will also be speed restricted.

The restrictions affect operating efficiency and cost, and any potential tightening of the speed restrictions will further constrain ferry services.

“If you can’t get as many sailings out of the fleet, more ships will be needed to provide the same capacity.”

A challenging build
Mr Brownlee says, in exposed waters, Clifford Bay would be a challenging build.

The transport ministry is leading a specialist project team to work through the complexities, including testing all the assumptions with the key stakeholders.
 
It has been estimated that the resource consent process, including preparation of the application and the process for obtaining consents, could take over two and a half years to complete.

Resource consents would need to be received before the construction phase could begin.

“The government has also signalled that it does not want to be the owner of a Clifford Bay facility.

"That would require the selection of an appropriate other player to undertake its development. This would not be a simple task.”
 
Region must develop potential
But regardless of the ferry terminal location, Mr Brownlee says the region must continue to develop the potential for greater tourism, giving Picton an opportunity to capitalise on its surroundings.
 
He says the cruise ship trade has gone from nine in 2009/10, with 7600 passengers – to a scheduled 21 in 2013 – delivering 47,500 passengers to the region.

Picton’s foreshore is currently dominated by the ferry operations and industrial land. The rail footprint alone is 86ha.

Meanwhile, he says Auckland’s Viaduct Basin and Wynyard Quarter are good examples of how the waterfront is being reclaimed for human use.

Good for economy
Construction of a $422 million port would have significant impact on the $2 billion Marlborough economy.
 
Freight and logistics bases would be built around the terminal.

There would ancillary services supporting the port operation, such as rental cars, restaurants and accommodation.
 
“The Clifford Bay proposal is challenging for Marlborough and also the rest of the country,” Mr Brownlee says.

janderson@nbr.co.nz