Whangārei pins hopes on a $240m dry dock for economic boost

Friday, 14 June 2019

The shipping industry is lobbying for a new dry dock.

Whangārei is the front runner for a new $240 million dry dock which is expected to deliver a huge economic boost to Northland, which has the highest unemployment rate in the country.

Shipping leaders will meet with Regional Economic Development Minister Shane Jones on June 26 to discuss building the dry dock at the city's Northport.

The dry dock would mean local ships, including the Interislander ferries, could be serviced in New Zealand rather than making the long and expensive journey to Asia.

Whangārei District Council chief executive Rob Furlong said it would be incredibly encouraging for jobs, and housing was affordable for anyone relocating to the town.

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Northland's average unemployment rate stood at 5.9 per cent, compared to the national average of 4.3 per cent.

Northport chief executive Jon Moore said the challenge for the Shipping Federation was to convince the Government that it would be well used.

'We've done quite a lot of work on it and we believe there is potential at Northport because we're close to sources of labour, have deep water, the refinery is next door for refuelling, and we have ample land for development,' Moore said.

A business case has been prepared by engineering firm Babcock, and interested parties have corresponded with the company.

Lyttelton's dry dock is too old and too small.

'Everyone's a bit scared to talk publicly in case they jinx things. But it's a waste of money not having one here, and the signals we're getting is that the business case is moving along,' Shipping Federation executive director Annabel Young said.

Most Shipping Federation members are attending the meeting with Jones, to highlight the advantages of a new domestic dry dock and the disadvantages of having to use dry docks in China or Singapore.

Shipping Agents Association president Bill Preston says the cost of using a dry dock is more important than where it is.

It took 14 days steaming to use the Singapore facility, up to six weeks out of service, and fuel costs of up to $500,000.

Several sources were only prepared to speak off the record about the proposal because of the 'incredibly sensitive political climate'.

When it came to location, Northport at Whangārei was a frontrunner, even though Port Marlborough has also long lobbied for an $80m dry dock. Northport has been involved in recent discussions.

Environmental benefits included more controlled clean up of bio fouled foreign ships hulls coming to New Zealand, Young said.

The Royal New Zealand Navy Devonport Naval Base has a dry dock that is too small for many ships.

Since new biofouling standards took effect in mid-2018 the Ministry of Primary Industries (MPI) has ordered 16 vessels with dirty hulls to leave coastal waters and carry out costly clean ups, a spokesman said.

In some cases they moored out to sea near Great Barrier Island and used divers, which could be a difficult and dangerous operation.

MPI's new rules mean some vessels can be directed to leave New Zealand territory.

Coastal shippers are keen on a new dry dock in New Zealand.

The Shipping Federation estimated that the cost of a new dry dock could be up to $240 million, whether the location was Whangerei of Shakespeare Bay at Picton, executive director Young said.

The price of using it will largely depend on the financial structure but shippers needed it to be cost effective, she said.

Young said five interisland ships could use it, Silver Fern Shipping's fuel tankers, Pacifica Shipping's coastal freighters, cruise ships, and New Zealand Defence Force.

Port Marlborough has lobbied for a dry dock at Shakespeare Bay, Picton.

Defence Force spokesman Charles Lott said a bigger dry dock was needed for navy ships and a new tanker soon to come on service. The location was less important for the navy, he said.

There were estimated to be at least 14 local vessels that would use it and more from overseas.

A New Zealand dry dock could also create an industry servicing foreign ships, Young said.

'We think it's financially viable through a public private partnership, and environmentally useful.'

The existing dry docks at Lyttelton and Devonport were old and too small for many ships.

There were three dry docks in Australia but they were also old and sometimes difficult to access. The Garden Island dock near of Sydney was built during World War II after Singapore was overrun by the Japanese military.

The operator of the Devonport naval dockyard, Babcock, unveiled plans for a floating dry dock there in 2002 but it was defeated by residents' concerns.

'We have no plans, nor do I believe do the Defence Force, to expand or reconfigure Calliope Dock at Devonport. I would not wish to speculate on any other facilities,' managing director in New Zealand, Chris Saxby said.

Shipping Agents Association president Bill Preston said it didn't matter too much where the new dry dock was located but pricing was an issue. It needed to be competitive with other docks or using divers to cary out hull cleaning.

The Devonport dock was 162 metres long and 23m wide.

This compares with the 230m long and 30m wide Interislander ferries KiwiRail is investigating buying.

KiwiRail chief executive Greg Miller said the new ferries would support the project and it could be part of a hub providing maritime services.

Earlier this year he told Parliament's Transport and Infrastructure Committee that lack of a sufficiently sized dry dock was hampering productivity.

KiwiRail was allocated $1 billion in the recent Budget to replace rolling stock and improve rail tracks. Jones said he would invite KiwiRail to make further representations in September about beefing up the Northland rail line and tunnels and other infrastructure.

A Government interim report released in April called the Upper North Island Supply Chain Strategy outlined how any investment at Northport, including a dry dock, first required developing the train line.

Shipping Federation members consider the report too rail-centric because developing Northport would facilitate more coastal shipping and avoid the need for expensive rail line and tunnel upgrades.

'The review (supply chain report) will guide the development and delivery of a freight and logistics strategy for the Upper North Island. This includes a feasibility study to explore moving the location of the Ports of Auckland, with serious consideration to be given to Northport,' the Ministry of Transport said.