PORT Otago, near New Zealand's South Island city of Dunedin, will spend NZ$30 million (US$21 million) to NZ$45 million to expand its infrastructure over the next two years, allowing 8,000-TEU ships to call.
The project includes a 13-kilometre channel deepening to 14 metres from 13, a 10 per cent boost to overall warehousing facilities, 135-metre quay extension to 435 metres, reports the Otago Times.
The expansion suggests market makers, giant shipping line Maersk and diary giant Fonterra, are expecting a surge of hinterland exports over the coming 24 months.
Although the arrival of bigger containerships may be a few years away, exporters should get cheaper container slots and speedier delivery times, said the report.
Most of the overall spending has been signalled, but the announcement gets projects like dredging and warehousing off the drawing board.
"This is a milestone day for us," said Port Otago CEO Geoff Plunket.
"It highlights our resolve to remain at the forefront of shipping and port activity in New Zealand and as a major contributor to the region's economic growth," he said.
But Mr Plunket declined to be drawn on talks with Fonterra or Maersk and would only say "we have talked extensively with customers and that's given us the confidence to invest in the future".
Maersk is Port Otago's largest shipping line customer by far, while all existing warehousing at the relatively new NZ$5 million Sawyers Bay facility is used by Fonterra.
By July, Port Otago would know if channel widening could allow the 348 metre cruise ship Ovation of the Seas to visit Dunedin, Mr Plunket said.
Containerships calling run to 267 metres, with the 6,500 TEU. Ships of 6,000 to 8,000 TEU are expected after the development.
To finance the expansion, Mr Plunket said Port Otago had only to rely on a mix of existing banking facilities and cash, the latter having been boosted by its coup in buying NZ$37 million of Lyttelton Port of Christchurch shares, which were sold last September for NZ$65.7 million.
"There's no new borrowing involved - we're in a strong cash position,' he said.
He noted Port Otago was already the deepest container port in the country at 13 metres at low tide. This was was the first port to export frozen meat in 1882, and hosted the country's first container ship visit in 1971.
Wikipedia notes that the 1,320-ton clipper Dunedin (1876¡V82) was the first ship to successfully transport a full cargo of refrigerated meat from New Zealand to England.
In this capacity, it provided the impetus to develop the capacity of New Zealand as a major provider of agricultural exports, notwithstanding its remoteness from most markets.
PORTS
31 May 2015 - 20:35
Dunedin's Port Otaga dredges to accommodate 8,000-TEU vessels
PORT Otago, near New Zealand's South Island city of Dunedin, will spend NZ$30 million (US$21 million) to NZ$45 million to expand its infrastructure over the next two years, allowing 8,000-TEU ships to call.
PORTS
31 May 2015 - 20:35
Dunedin's Port Otaga dredges to accommodate 8,000-TEU vessels
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