Council ‘100% overdue’ on $ 110 million loan for new ferry terminal in Picton

Marlborough District Council is seeking a loan of $ 110 million to Port Marlborough, so that the port can accumulate its share of the redevelopment of the Waitohi Picton Ferry Precinct.

Of course, the board will have to borrow the money first.

In soliciting public comment on the “significant $ 110 million retrocession proposal to the port,” the council assured it would neither increase tariffs nor cost taxpayers dearly.

Rather, it would raise the council’s dividends to more than $ 6 million, offsetting the need for future rate increases, the council advised this week.

READ MORE:
* Fast Track Completed: Picton Ferry Terminal Upgrade Obtains Environmental Approval
* Public is divided on where to direct ferry traffic in the Picton Compound upgrade
* Council is concerned about the minimization of impact of large ferries on Picton routes by the NZTA
* Port company considers ‘significant debt’ to build new ferry terminal in Picton
* KiwiRail signs the first kawenata (agreement) with iwi before the works of the Picton terminal

According to the proposal, the council would take on debt through its existing agreements with the New Zealand Local Government Finance Agency.

The agency specializes in financing the local government sector, in order to offer lower costs and alternative sources of funding to local governments and bodies controlled by the council.

If Port Marlborough were to seek financing through private loans, the council estimated that interest would be 1-1.5% higher, which would take longer to repay the loan and reduce the council’s future dividends.

Marlborough Mayor John Leggett said it made financial sense for the council to borrow money.

The board had one of the best credit scores of any New Zealand board, Leggett said.

“The public has already had their say on the new design of the ferry enclosure, including a better connection to the city center … Now this consultation is about whether to fund the port’s share of the project. to achieve those goals, ”Leggett said.

New Interislander ferries were due to arrive in 2025, and Waitohi Picton would not be able to handle the larger ships without the redevelopment. The contract price for the two ferries was $ 551 million.

The entire project, including the two new ferries and the Kaiwharawhara terminal infrastructure in Wellington and Waitohi Picton, is expected to reach $ 1.45 billion. The government has so far committed $ 435 million.

The community had fought for the past decade to keep ferries from Cook Strait to Picton, Leggett said, and Port Marlborough had successfully negotiated a deal that would see KiwiRail engage in the region for at least 30 years. .

“This investment not only makes good financial sense for the board as a shareholder, but also aligns with the port’s focus on people, planet and prosperity, with benefits being realized across the board. Picton community and the greater Marlborough area, ”said Leggett.

The redevelopment also served as a catalyst for other projects that benefited the community, which were not included in the consultation. The council was working with transport agency Waka Kotahi NZ on proposed road improvements, including intersection roundabouts, trail and safety improvements and a new Dublin Street upper bridge.

Leggett said the directors and advisers of the Port Company were ‘100% behind us and I think the community will follow because we have made sure they have been kept up to date and up to date with the progress of the project. over the past two years. year”.

The public consultation would include a public meeting in Picton, drop-in days in Picton and Blenheim, and a possible Zoom meeting for those who were unable to attend the meetings in person.

All work on the terminal would be completed by 2025, when the new ferries arrive, Leggett said.

“They will move quickly once we sign here. “

The easiest way to make a quote was online at www.marlborough.govt.nz/your-council/have-your-say-consultations by 5 p.m. on February 4 next year.

For any questions regarding this consultation, send an email. More information was also available at: https://www.irex.co.nz/