Q&A with former Port Marlborough chief executive Ian McNabb

Thursday, 18 January 2018

Retiring after almost 10 years in the top job, former Port Marlborough chief executive Ian McNabb sits down with reporter Anan Zaki to reflect on his time at the port. 

With the recent earthquakes, was the last year your most challenging time as chief executive?

I think the most challenging thing that happened in my time was the government announcement that they were going to ship the ferries to Clifford Bay or going to investigate the building of a port at Clifford Bay.

That went on for probably two-and-a-half years and when comparing that to the impact of the earthquakes, the earthquakes were nothing. It basically shut Picton down economically for two-and-a-half years while everyone buggered around with that.

We tried to put the facts in front of everybody and finally at the end of the day they either gave up or decided that we were possibly quite right. 

The pressure was that with any investment you're going to make, you have to think about them very hard because you could have ended up with stranded assets if anything was done about the ferries. And the ferries were a pretty big part of Marlborough's business.

How difficult was it to balance the recreational and commercial sides of the port?

As the business grew we worked out what worked and what didn't. 

We also did things differently to other ports. You can see that because now, Port of Lyttleton is building a new marina, so maybe keeping our marina was a good idea.

The marina has provided a very good and steady cashflow, it's basically a rental business and that really helps. The port operations, particularly ferries, are quite seasonal, the loads are very different between the seasons.

A controversial subject during your time was the use of methyl bromide, what went on during that time?

There was quite a lot of opposition to methyl bromide, [which] started I think over in Nelson where the fumigant was released pretty close to the road and to other businesses. When I first came here there was quite a bit of local opposition to methyl bromide. So we introduced a whole lot of controls and had boundaries. It was all done under national regulation, but you only need one mistake. Like if a tarpaulin blows off and you get the fungicide in the air and you would probably exceed the guidelines. 

It just became a nightmare to be honest because you had everybody jumping up and down about it, people saying they were poisoned by methyl bromide. 

In the end, the easiest thing for us to do was to say, it's not going to happen again. That upset quite a few of our exporters and quite rightly. But methyl bromide is being phased out in the world by 2021, there's only another three years to go anyway and at the moment there is no substitute so I'm not sure what will happen after they phase it out. 

But I think stopping the use of methyl bromide was the right thing to do.

A lot of talk has gone on about a potential dry dock in Picton, how vital is that for the region?

The dry dock is an interesting one, we did a lot of background work on the dry dock. Now there's effectively only one dry dock in New Zealand that's capable of taking reasonable-sized vessels. I doubt that even the Straitsman, the smallest of the Cook Strait ferries, would fit into the dry dock, the Davenport dry dock in Auckland, and it was built back in 1888. 

The current choices are Garden Island in Sydney, or to Singapore. Garden Island is a Royal Australian Navy-owned facility run by a private contractor. This year, the Strait Feronia got into Garden Island but you can get bumped at Garden Island. You might book in for August 10, but if there's a navy issue it's basically, 'sorry son, you're out'. The real option then is to go to Singapore, which is three weeks each way, so waste six weeks travelling. So from pure economics, a dry dock capable of carrying a 200-metre plus vessel makes a lot of sense.

We had a discussion with the New Zealand Shipping Federation and the Defence Force a couple of years ago and they identified a couple of sites, one was here and one was in the North Island. We said we will do a plan overview of Shakespeare Bay and what we believe could be done there from a Resource Management Act perspective. They got their guys around and said if we were able to get something done in Shakespeare Bay who would use it.

A pre-feasibility study showed us the total cost of the project, can't tell you that but it's many tens of millions, but significantly under a billion.

The dry dock is still on the table, so I think pure economics will drive that issue. We don't know an exact number of jobs, but we're estimating the project will create many hundreds. 

In the next 20 years, aside from the dry dock, what will be the next step for Port Marlborough to keep itself as an economic driver in Marlborough?

The port will be lodging resource consent to establish an extension in Waikawa in the next six months. Construction of that might be a number or years away but it just depends what demand is. So it's incremental growth, the port would love to have more berths in Picton but there's nowhere you can put them.

We've got five ferries now, I don't see it suddenly becoming seven but they will be bigger, maybe less ferries but bigger ferries and that just keeps the volumes coming through. The volumes are not dramatically rising in terms of product coming north to south and the number of passengers are relatively static.

In terms of Shakespeare Bay, well, logs in the last 10 years have doubled, I don't think the potential is there to double it again but there's certainly going to be some growth there as well. If you managed to put a dry dock into that facility as well, you've got some pretty significant growth. 

Cruise ships I guess is the other one, where 10 years ago getting 20 ships was doing well. This year it's getting close to 50 and next year probably a few more so we've just got to make sure that we don't cruise ship ourselves out a bit really. I think we've got a long way to go yet, we're lucky that we can have both sides. A cruise terminal would be wonderful, we have great weather but it does take a lot of logistics to work those ships, but it's great.