By Duncan Bridgeman and Graeme Hunt
Friday 28th March 2003
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The severely undercapitalised port has been sold to Eastland Energy Community Trust, with a levy to be imposed on customers to fund development.
But Mr Mulligan, whose Sydney-based investment company had wanted to buy the port, questioned whether there was enough money available for the work required.
A recent Port of Gisborne study indicated $20 million was needed over the next 10 years. Mr Mulligan said at least $5 million was needed immediately to repair the breakwater and channel out of the port.
"Unless some money is put in immediately then cargo will end up going to Napier and Tauranga and once you lose that it is very hard to get back," Mr Mulligan said.
The port was seen as essential for the Gisborne community and a loss of shipping contracts would result in the loss of millions of dollars of exports and jobs, he said.
Eastland Energy Community Trust is understood to have had about $18 million in cash reserves but a large chunk went in buying the port. The previous owner, Gisborne District Council, sold the port-related assets to Eastland for about $16 million.
Mr Mulligan questioned how much money was left in Eastland's coffers to begin restoration.
Eastland Port chairman Thomas Corson said the port company was now completely debt-free and early stages of development would begin next week. The new owners were still determining how best to finance future development but a combination of borrowing and port earnings would be looked at, he said.
"It doesn't have to happen tomorrow," he said, adding that Eastland had been in charge for only a month and still needed to appoint a chief executive to run the port.
Pressure was put on the sale by Deputy Prime Minister Jim Anderton, who said he would allocate money to upgrade roads in the area only if the port was upgraded.
The port had been carrying debt of $17 million, of which $15 million was owed to Bank of New Zealand and $2 million to the district council. Most of the debt related to the February 2002 grounding of the Jody F Millennium.
Mr Mulligan said his company, International Infrastructure Management, was still interested in owning, leasing or managing the port.
"We will continue to hover and we are interested in working with Eastland."
Mr Mulligan said his interest lay in the potential of Gisborne's burgeoning forestry exports, with significant quantities of wood fast reaching maturity.
"Our invitation to manage the port and look at buying the port went unnoticed last year. We were not invited and they went instead to Tauranga, Napier and Wellington for expressions of interests."
The Port of Gisborne has had problems dating back to its infancy in the 19th century. In 1885 the then Gisborne Harbour Board launched a scheme to create an outer harbour to expand the port beyond the mouth of the Turanganui River. A ratepayers' poll overwhelmingly backed borrowing the necessary £200,000 to finance the work and the board set about raising the money on the London market. But the construction was a disaster.
The 360m breakwater extending out to sea from the mouth of the Turanganui River created a sandspit, reducing the navigable depth at the bar from about 3m to less than a metre. The channel was no wider than before the work started and there was the added problem of the breakwater being a navigational hazard.
When the work was stopped at the government's direction in April 1890, the harbour board had spent about £100,000 of the original loan moneys and was no nearer to turning Gisborne into a first-class harbour.
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