Port of Tauranga to take 50% stake in Port of Timaru

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Port of Tauranga to take 50% stake in Port of Timaru

Postby greenwelly » Tue Aug 13, 2013 4:10 pm

I am guessing that this will likely see some form of fairly regular Timaru to Tauranga service introduced,

Could be the beginning of first slow steps to port consolidation in NZ

Press Release by Timaru District Council at 3:22PM, 13 Aug 2013
-----------------------------------------------

A Joint Venture proposed by Timaru District Council and Port of Tauranga will be a giant boost for PrimePort resulting in a secure future with increased container traffic, employment opportunities and improved financial benefits for the district.

Under the proposal, which first must undergo a month-long consultation process with Timaru district ratepayers, the Port of Tauranga would buy 21.43% of PrimePort’s shares from Timaru District Holdings Ltd, a wholly owned subsidiary of the Timaru District Council, and the 28.57% of shares that are held by a group of local investors who make up Port Industry Holdings Ltd.

PrimePort would maintain 100% ownership of all operational land and buildings at the port, along with all port infrastructure. It would still operate the trade and marine facilities while the Port of Tauranga (through a subsidiary) would purchase and operate the container handling assets of the port and would be offered a long-term lease of the North Mole, guaranteeing an income stream to PrimePort. Timaru District Holdings Limited would gain 100% ownership of investment properties surrounding the port.

The Mayor of Timaru, Janie Annear, said that this agreement, initially for 15 years with two further rights of renewal of 10 years, would secure the profitability of the port well into the future.

“After 18 years in local government, this is the most exciting proposal I have seen. Port of Tauranga is anticipating a significant increase in container volumes through Timaru, something PrimePort would be less likely to achieve on its own.

“The flow on effect could be an increase in investment into infrastructure, storage and other related services and opens possibilities for more jobs.

“Timaru District Holdings will acquire full ownership of investment land which will provide a more secure dividend stream than the Port alone was able to offer. Timaru District Holdings will receive net proceeds of approximately $2 million from this transaction, which will be used to pay down debt. There will be no immediate effect on Timaru District Council rates, but with an expected increased dividend from PrimePort and the investment properties, there is opportunity to offset future rate increases,” she said.

PrimePort is one of New Zealand’s smaller commercial ports and as such is at the vagaries of world trends. Container traffic through the port has decreased by two thirds over the last five years as the world container trade changes to larger capacity vessels and shipping companies look to rationalise port calls.

“The proposal reduces the Council’s risk due to leasing the container operation instead of operating in isolation in a volatile shipping market.”

Port of Tauranga is a world-class operation. It is the biggest container port in New Zealand and the most efficient in Australasia. It promises to bring expertise and a new vitality to the whole port that will benefit all residents and businesses.

“PrimePort Timaru is ideally placed for growth. The South Canterbury region delivered export growth of 4.4% last year, compared to the national average of 2.9%. The port is the South Island’s most centrally located port, with 75% of the population within 200km. The surrounding region represents the largest irrigated area of arable land in New Zealand. Clandeboye, the second largest dairy factory in the world, is on its doorstep, as is the largest wool scour in the Southern Hemisphere.

“This proposal also unlocks the potential for coastal shipping services to use PrimePort as a feeder port into Port of Tauranga with exports then moved on to larger ships for worldwide distribution,” she said.

Timaru District Holdings Ltd has recommended this proposal to the Timaru District Council.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby pete » Fri Aug 16, 2013 10:40 am

I read an article last year in NBR that said Port of Tauranga was likely to be, along with Nga Tahu, one of the financiers of the Clifford Bay terminal. Presumably this is to extend their reach to make a viable land link to ChCh. Now with investment in Timaru . . . Easy to see where this is going! Port consolidation.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby eurokiwi78 » Fri Aug 16, 2013 11:08 am

Appears pot is planning on buying a few smaller ports to use in a similar manner to the southdown metro operation, linked by coastal shipping rather than trains.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby duddley » Fri Aug 16, 2013 12:12 pm

Are they going to be running their own dedicated ships?.
Duddley for Mayor!!!
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby pete » Fri Aug 16, 2013 1:13 pm

Given the earlier article re investing in Clifford Bay, made me assume they intended to rail freight to South Island. Certainly be more speed competitive than coastal shipping.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby greenwelly » Fri Aug 16, 2013 1:47 pm

eurokiwi78 wrote:Appears pot is planning on buying a few smaller ports to use in a similar manner to the southdown metro operation,


They are also expanding Metroport,

http://www.stuff.co.nz/business/industries/9031964/Port-of-Taurangas-37-2m-for-expansion
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby tuktuk » Fri Aug 16, 2013 2:47 pm

No announcement yet on Clifford Bay, so no guarantee that it will go ahead. Also no guarantee even if it does go ahead that it will include provision for rail ferries.
It may be that POT knows information we don't. Refer also to estimated 6.2 earthquake just been near Seddon which should make all consider very carefully the question of infrastructure resilience.

Historically, rail has competed between Auckland and Christchurch on speed rather than price where shipping does win out. I'm not sure what the current status would be.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby royce » Fri Aug 16, 2013 10:23 pm

Looks like there is some kind of strategy unfolding here from Port of Tauranga. Timaru for the bottom of the south Clifford bay for the top. Kiwirail for Metroport and the lower and west of the north Island. Reopen the SOL we can hope but I doubt it. I could see trains from Northland pulling into Southdown next to the Metroport train and containers being transhipped. I would except they would use ships from Timaru and Clifford bay to Port of Tauranga with only urgent and overflow going by rail. Still what would I know. We will have to wait to see.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby eurokiwi78 » Sat Aug 17, 2013 10:49 am

Is onehunga owned by poa? A similar operation between there and new plymouth would kill off any sol revival based on dairy product.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby Hamish O » Sat Aug 17, 2013 10:50 am

eurokiwi78 wrote:Is onehunga owned by poa?

Yes.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby royce » Sat Aug 17, 2013 1:03 pm

eurokiwi78 wrote:Is onehunga owned by poa? A similar operation between there and new plymouth would kill off any sol revival based on dairy product.

I think the advantage for Port of Tauranga owning or having a stake in other ports including inland ports is although there are costs in operating them they don't have to give any money to anyone else. And yes if they were to purchase Onehunga a coastal ship between New Plymouth and Onehunga with a seamless connection into the Metroport site could be another piece in the jigsaw of Tauranga becoming the super port of New Zealand. Or even Wanganui they could probably buy that for a song.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby Gerald Petrie » Sat Jan 18, 2014 7:49 am

Last week it was announced the Port of Tauranga had agreed to purchase 15 hectares (about 30 acres) in the Selwyn Dictrict Council's Izone Subdivision at Rolleston. This industrial subdivision parallels the Midland line, and by process of elimination the site can only be adjacent to the Westland Milk Products yard and siding.

Image

The 1km peg can be seen opposite the beginning of the siding. The loops end at about 1.7km, and here would in my view be the optimum place to begin the spur into the Port of Tauranga's Inland Port.

Image

This derailing point is pointing directly at what is probably the Port of Tauranga's land.

Image

In the above photo, Westland Milk Products is in the right background, and their siding is at the extreme right before the hedge. The Midland line is on the other side of the hedge. However, this paddock is not big enough. By my reckoning there is only about 10 acres here, so more land further west must be part of the deal.

Image

The Midland line is behind the photographer. Judging by the extraordinary amount of money being spent on this investment, I can only speculate it is intended to originate and terminate trains here. To do this, locos could run around the train on the loop at Rolleston Junction, or a triangle could be inserted at Rolleston connecting the Midland Line to the Main South Line.

Image

The yellow half km peg can be seen at the left on Rolleston curve. A locomotive turning triangle at Rolleston was described as ballasted and ready for traffic on 27 May 1898. There was a desire to place larger locos on the morning goods train (Christchurch-Rolleston) as traffic was at times heavy. Reading between the lines of the memos I have, up until this time tank locos were used on the Christchurch - Rolleston train, and the triangle allowed the use of large tender engines. The above photo shows the formation of the triangle.
Last edited by Gerald Petrie on Fri Mar 07, 2014 9:41 am, edited 4 times in total.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby eurokiwi78 » Sat Jan 18, 2014 2:24 pm

there was historically a triangle at rolleston for direct connection between the west and south. you can see the formation on google earth quite easily
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby pete » Sat Jan 18, 2014 8:21 pm

Thanks Gerald, great photos and explanations.

the south leg of the triangle was still in existence as late as the mid 1980s, and I distinctly remember it being used to store old 4 wheeled coal wagons as the CBs were being I introduced.. Interesting times in store!
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby Gerald Petrie » Sat Mar 01, 2014 4:19 pm

There is a good deal of debate going on within Kiwirail as to how to accommodate the Port of Tauranga's siding at Rolleston. It seems there is a great deal of concern that Rolleston will become a bottleneck. There are other considerations.

- Westland Milk Products are adamant that their trackage cannot be used. They coughed up the millions to have the loops installed, so they are entitled to have some say.
- Coal train schedules cannot be in any way be interfered with.

The drawing below is a rough artist's impression of one idea that is being thrown about. It is early days, and might not even be indicative of what is actually built.
Image
The blue line represents the Port of Tauranga siding. The orange line represents a loop to be built on the south side of the main to allow coal trains to pass freely through here without being interfered with by the Timaru trains.

The blue line below represents the triangle. Jones Road will now have two tracks at the level crossing. The triangle line will cross over the new loop to gain access to the main.
Image

It seems some money will have to be spent.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby Kahukowhai » Sat Mar 01, 2014 5:22 pm

I am interested in the junction itself as historically there does appear to be different arrangements of the tracks

Image
Rolleston Junction by enzedrail, on Flickr
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby Gerald Petrie » Sun Mar 02, 2014 7:45 am

Image
I forgot to mention there is plenty of room for the new loop; there will be no need for land acquisition.
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby pete » Wed Mar 05, 2014 12:13 pm

Building on this story, it just announced today that the Port of Lyttelton will build an inland port at Rolleston also. Its on Stuff, but I cannot do a link as I am on my smartphone.

Will be a busy hub out there soon!
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby locost_bryan » Wed Mar 05, 2014 12:47 pm

pete wrote:Building on this story, it just announced today that the Port of Lyttelton will build an inland port at Rolleston also. Its on Stuff, but I cannot do a link as I am on my smartphone.

Will be a busy hub out there soon!

http://www.stuff.co.nz/business/industries/9793028/Lyttelton-Port-plans-second-inland-site
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Re: Port of Tauranga to take 50% stake in Port of Timaru

Postby Kahukowhai » Wed Mar 05, 2014 5:39 pm

And then maybe the folly of singling Islington-Rolleston will become apparent.

Although we are in a more fortunate position than Dunedin. Their single track line between Dunedin and Mosgiel was doubled at great expense 100 years ago. About 30 years ago some moron that the double track embankment on sections of it should be replaced with a new single track embankment and bridges. Although the route is now carrying record traffic due to the Fonterra development at Taieri the reinstatement of double track over the whole section would be an extremely expensive process as most of the spare space has been taken over a motorway (sound familiar?)
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