Council '100 per cent behind' $110m loan for new ferry terminal in Picton

Friday, 17 December 2021

New Interislander ferries will be ready to go in 2025, but Waitohi Picton won’t be able to handle them if its ferry terminal isn’t redeveloped.

The Marlborough District Council is looking to lend Port Marlborough $110 million, so the port can stump up its share of the Waitohi Picton Ferry Precinct Redevelopment.

Of course, the council would need to borrow the money first.

In asking for public feedback on the “significant proposal to on-lend $110 million to the port”, the council assured it would not increase rates or cost ratepayers.

Rather, it would increase dividends to the council to more than $6 million, offsetting the need for future rates increases, the council advised this week.

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Concept design for new ferry terminal in Picton.

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Under the proposal, the council would raise debt through its existing arrangements with the New Zealand Local Government Funding Agency.

The agency specialised in financing the local government sector, to provide lower costs and alternative funding sources for local authorities and council-controlled organisations.

If Port Marlborough sought financing through private lending, the council estimated interest to be 1 per cent to 1.5 per cent higher, which would take longer to service the loan and lower future dividends to the council.

Marlborough Mayor John Leggett said it made financial sense for the council to borrow the money.

The council had one of the best credit ratings of all councils in New Zealand, Leggett said.

“The public has already had a say on the ferry precinct’s new design, including a better connection to the town centre … Now, this consultation is about whether to finance the port’s share of the project to achieve these goals,” Leggett said.

New Interislander ferries were due to arrive in 2025, and Waitohi Picton would not be able to handle the larger boats without the redevelopment. The contract price for the two ferries was $551m.

The entire project, including the two new ferries and the terminal infrastructure at Kaiwharawhara in Wellington and in Waitohi Picton, was expected to come in at $1.45 billion. The Government had so far committed $435m.

The community had fought over the past decade to keep Cook Strait ferries in Picton, Leggett said, and Port Marlborough had successfully negotiated an agreement that would see KiwiRail commit to the region for at least 30 years.

“This investment not only makes financial sense for the council as a shareholder, but also aligns with the port’s focus on people, planet and prosperity, with benefits realised across the Picton community and wider Marlborough region,” Leggett said.

The redevelopment had also acted as a catalyst for other projects that benefited the community, which were not included in the consultation. The council was working with Waka Kotahi NZ Transport Agency on proposed roading improvements, including intersection roundabouts, footpath and safety upgrades and a new Dublin Street overbridge.

Leggett said Port Company directors and councillors were “100 per cent behind us and I think the community will follow because we’ve made sure they’ve been kept abreast and up-to-date with how the project’s been developing over the past couple of years”.

Public consultation would include a public meeting in Picton, and drop-in days in Picton and Blenheim and a possible Zoom meeting for those who were unable to attend meetings in person.

All work on the terminal would be completed by 2025, when the new ferries arrived, Leggett said.

“They’re going to move at pace once we sign off here.”

The easiest way to make a submission was online at www.marlborough.govt.nz/your-council/have-your-say-consultations before 5pm on February 4 next year.

For questions about this consultation, email More information was also available at: https://www.irex.co.nz/