Council signs off on 'good deal' to borrow $110m for Port Marlborough

Monday, 7 March 2022

At a special Council meeting on Friday, Marlborough District Councillors decided to raise a loan of up to $110 million and on-lend it to Port Marlborough.

The Marlborough District Council has agreed to borrow up to $110 million on behalf of Port Marlborough, so the port can pay its share of the Waitohi Picton Ferry Precinct Redevelopment.

Councillors approved the loan at a special council meeting on Friday, subject to conditions.

The council decided to go ahead with the loan if KiwiRail funded a Dublin Street overbridge (less any subsidy from Waka Kotahi NZTA), an agreement was reached to upgrade the Waitohi River culverts, and the council was happy with the legal agreements between KiwiRail and Port Marlborough.

Marlborough Mayor John Leggett said after considering public submissions councillors decided the best option was for the council to raise the loan through its existing arrangement with the New Zealand Local Government Funding Agency, which specialises in financing the local government sector.

**READ MORE:

* Port loan funding raises concerns

Marlborough Mayor John Leggett said the redeveloped ferry precinct, and new ferries that go with it, will bring significant benefits to Waitohi Picton.

* Concerns come out as council hears submissions on ferry precinct loan

Leggett said he was looking forward to seeing the ferry precinct project take shape.

* Former councillor says $110m port loan risky without Crown guarantee

“If Port Marlborough had sought financing through private lending, the interest rate would have been quite a lot higher. That means it would have taken longer to service the loan and also lowered the dividends the council receives from the port each year,” Leggett said.

The council received 26 public submissions on the loan proposal, with consultation – including hearings – running from December 17 to February 4.

Concept design for the redeveloped ferry precinct in Picton.

Leggett said the Port Marlborough loan was a “good deal” for ratepayers, increasing the port dividend paid to council by up to $3 million a year for the next 10 years, to see it repaid within 30 years.

Two new Interislander ships were due to arrive in New Zealand in 2025, and Picton and Wellington needed new wharves and ferry terminals to accommodate the larger ferries.

Leggett said the new ferries and the redeveloped ferry precinct would bring significant benefits to Waitohi Picton and the wider Marlborough community.

“The new ferry precinct will strengthen Waitohi Picton as the gateway to the South Island and hub for the Marlborough Sounds. It will improve connections with State Highway 1 and will enable KiwiRail to carry more freight in and out of the South Island.”

The Cook Strait crossing was vital for New Zealand’s freight, transport and tourism infrastructure, Leggett said.

“I look forward to seeing this exciting project take shape,” he said.

More information about this project can be found by visiting www.irex.co.nz.