Speculation about the cost of development work needed for Ports of Auckland to handle the next generation of container ships is wrong, says managing director Jens Madsen. "There is speculation in the marketplace that it could cost $250 million. What we're actually going to spend here is a fraction of that."
The rumoured cost included having to dredge a deeper channel into the port, which would not be necessary, Madsen said. "In the future, because of the tidal windows, we can actually accommodate the larger ships through the channel coming into the port without any further dredging." The port takes boats of a size up to 4100 20ft equivalent unit capacity but the next generation to arrive could be between 6000 and 7000 20ft equivalent capacity. To accept the larger vessels, berth deepening would still be needed at the Fergusson container terminal. A new berth could also be built during the second stage of a land reclamation project due to begin early next year. The project is expected to take between eight and 10 years to complete. "Both of those two berths will be able to accommodate the larger ships," Madsen said. However, the port would need firm indication from shipping companies that they intended sending larger ships to New Zealand before the berths were prepared to receive them.
"We want to send a very clear signal to the marketplace that whenever the shipping lines are ready, we are ready," Madsen said.
The release this month of Ports of Auckland's financial information showed debt for the year ending June was $362.2 million, up from $306.4 million the previous year, while finance costs rose to $24.2 million from $15.2 million.
The increased finance cost from higher debt levels related to a capital investment programme costing about $150 million, including $76 million spent last year, and a $120 million special dividend paid to Auckland Regional Holdings - the port's owner - in 2005.
Chief financial officer Wayne Thompson said a lot of money spent on the land reclamation project was not additional cost because it made use of dredged materials recovered as part of necessary normal maintenance.
"What we're trying to say is we can fund and we can build for the future," Thompson said. "We're just taking away this speculation that's out there based on this big number that doesn't have to be spent."
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