Dry dock study to assess who will pay

Project cost may fall on Northport owners

The NZX-listed owners of Northport may have to stump up money to have a valuable new asset in the shape of the Devonport Naval Base dry dock relocated to their doorstep.

A commercial analysis on shifting the dry dock to Whangarei is expected to be delivered to Provincial Growth Fund oversight government ministers late next month, and Infrastructure and Regional Economic Development Minister Shane Jones said the report would discuss how the dry dock shift north and its development would be paid for.

“It will explore . . . whether or not we would require the current owners of Northport to dig into their pockets.

“This will be a valuable asset and I don’t think it’s appropriate for the Crown to be required to meet the costs if the beneficiaries are sharemarket companies,” Jones said.

The dry dock would become a major addition to New Zealand’s infrastructure and would be available for all commercial players so in effect was for the public, he said.

The Defence-owned Devonport dry dock is too small to service and hull-clean many modern vessels including the Cook Strait KiwiRail ferries, new navy vessels, and fuel and cement ships. Hull cleaning can be a biosecurity requirement.

The NZ Shipping Federation supports Jones’ concern that ships are being forced to book space at the increasingly busy Sydney naval dry dock or in Singapore, both highly costly alternatives which can mean weeks of lost business while they are sailing there and back and laid up.

Northport is 50 per cent owned by listed Port of Tauranga and 50 per cent by Marsden Maritime Holdings, also a listed company, which is majority-owned by the Northland Regional Council with the Ports of Auckland having a 20 per cent stake.

Northport, which is undertaking the $2 million commercial analysis funded by the Provincial Growth Fund, will not comment on the work, saying it is gagged by a non-disclosure agreement with the Government.

Port of Tauranga chief executive Mark Cairns said any dry dock proposal was for the Northport board to consider.

“Shane has offered to the chairman of Northport to address a board meeting and we think that’s a good idea.”

Jones, who supports moving the dock to Northport, said if his Cabinet colleagues also like the idea the next step will be navigating “the thicket of environmental statutory processes”.

“There is the bog-standard RMA process but . . . I hope to see this transition take place before I’m 80.”

Alternative routes could be bespoke legislation such as the model used for the Anzac memorial at Wellington’s Basin Reserve, or via the new Urban Development Authority, Jones said.

Shipping Federation executive director Annabel Young said there were only two sites for a new deepwater dry dock in New Zealand — at Northport or Shakespeare Bay, Picton.

“We have increasingly said a dry dock is an important piece of New Zealand infrastructure. It is getting harder . . . to get a booking in Sydney where the demand for the dry dock is accelerating rapidly because of the investments the Australian Government

I hope to see this transition take place before I’m 80. Shane Jones

is making into naval ships.”

There were “issues” around the quality of work at Singapore, and for a commercial operator the opportunity cost with two weeks sailing each way was “problematic”, Young said.

Who owned a dry dock at Northport was “just a detail”, but the federation would be concerned to ensure that dry dock charges were not “monopolistically punitive”.

Defence leases the Devonport dry dock to Babcock Australasia which has managed the dockyard since 2010. A spokeswoman said the company had considered options at Northport and elsewhere but had no further comment at this time.

Babcock has been consulted as part of the commercial analysis with EY (Ernst & Young).

Babcock said it employed around 235 fulltime staff at the dockyard.