Public to weigh in on $110m loan for Picton port redevelopment ahead of new ferries

Thursday, 16 April 2026

Marlburians are to be consulted on whether the Marlborough District Council should borrow $110 million to help redevelop the ferry terminal in Picton ahead of new ferries arriving in 2029.

The council unanimously voted at an extraordinary meeting on Thursday to consult the public over the next month with submissions, public meetings and a hearing.

It would be the second time the council had consulted on such a loan. The first was for the iReX ferry project in 2021 and 2022, cancelled by the Government in 2023 due to cost escalations.

Since then the Government had revised the ferry replacement programme, established Crown company Ferry Holdings to lead delivery, and updated the ownership and delivery model for port infrastructure associated with the programme.

To prepare the port for the new ferries, the council wanted to borrow $110m from the Local Government Funding Agency and on-lend it to MDC Holdings, Port Marlborough’s parent company. Port Marlborough would then borrow up to $110m from MDC Holdings, and operation income would service the loan, rather than ratepayers.

The Picton work was expected to cost about $530m in total, and any costs over and above $110m were to be covered by Ferry Holdings.

After the council vote in Marlborough on Thursday, Rail Minister Winston Peters put out a press release describing it as a “milestone” for the iReX do-over.

Peters urged Marlburians to get involved with the consultation process, reminding them that supporting the proposal would come at no cost to ratepayers.

“But we don’t need to explain common sense to the good people of Marlborough,” Peters said.

A report prepared for Thursday’s meeting said the council loan would be protected by a financial guarantee and bond arrangements agreed with Ferry Holdings, adding ratepayers would benefit from the upgraded port, as it would deliver increased returns to the council.

“Higher dividends to council could reduce future rates increases,” the report said.

Amid questions from councillors, port bosses on Thursday allayed concerns about the financial risk saying they had done their due diligence and had the right safeguards in place.

Port Marlborough chairperson Warren McNabb before the vote told councillors the “status quo was not an option”. Picton’s infrastructure was originally designed for the Aramoana, the country’s first roll-on roll-off ferry, in 1962, he said.

The new ferries were eight times the weight of the Aramoana and the wharves were at “end of life”. The redevelopment, along with a recent 40-year extension to Bluebridge’s commitment to Picton, would cement “Picton’s place at Cook Strait’s gateway”.

MDC Holdings chairperson Matt Kerr described it as a “multi-generational investment in Marlborough’s infrastructure and economy”.

He said it was a “rare opportunity” to secure inter-island operations in Picton for the next 60 years and it ensured the port remained a fit-for-purpose facility.

Councillors were reminded they were just voting on whether to put the proposal out to public consultation and that a final decision on the loan would come later.

Sounds ward councillor Barbara Faulls said the development’s delay following the cancellation of iRex had been damaging and the Picton community was keen to “move things forward”. “I imagine that's the same for the rest of Marlborough.”

Ongoing ferry problems were impacting New Zealand’s tourism reputation across the globe, she said.

Wairau-Awatere ward councillor Gerald Hope said it was a project of national significance and he was happy with the reassurances provided. “You can't eliminate risk but you can manage and mitigate risk.”

Wairau-Awatere ward councillor Sally Arbuckle said members of the public were quick to comment on ferry problems, so she hoped they engaged in the consultation process and “come back to us with their points of view on this”.

Deputy mayor David Croad described the current position as “deja vu”. “It was a sound opportunity for Marlborough then [during iReX] and it continues to be a sound opportunity for Marlborough now.”

Wairau-Awatere ward councillor Scott Adams reminded people there was a general election later this year and said “no matter who leads this country they have to stay with this project”.

Hope responded that this was in the interest of the country. “We can't afford another sunk ferry project.”

If the council decided not to take out the loan, the report said this would avoid increasing direct debt, but it could “introduce greater uncertainty regarding Picton’s future role in the Cook Strait ferry network”.

“It would likely require Port Marlborough and the government, through Ferry Holdings, to revisit or renegotiate aspects of the current redevelopment arrangements, including scope, timing, and commercial terms.

“If this option were adopted, the likely scenarios include Port Marlborough seeking to raise debt in its own name at higher market interest rates, or entering into renegotiations with Ferry Holdings to determine whether an alternative redevelopment approach could be agreed.”

Public meetings would be held at Port Marlborough Pavilion on Wednesday May 13, from 1pm to 3pm, and 6pm to 8pm, and at the Lansdowne Hub on Thursday, May 14, from 6pm to 8pm.

The council would hear submissions from May 20 to 21, and then make a final decision on May 26.