6 Wharf business case approved

Hawke’s Bay Regional Council has received confirmation that the Napier Port Board has approved the business case for investment in the development of a new wharf (6 Wharf), subject to funding confirmation.

The Port’s approval of its business case is a condition set by the Hawke’s Bay Regional Council prior to a final decision on whether to approve a minority initial public offer (IPO) of shares in the Port and marks an important milestone on the journey towards 6 Wharf becoming a reality for the Port, its employees and customers and the Hawke's Bay region.

The business case approved by the Napier Port Board includes an updated estimate of the projected investment required of approximately $170 - $190 million, compared to an initial estimate from the middle of 2018 of approximately $142 million. The new estimate is based on developed design work undertaken since the Regional Council confirmed its in principle support for a financing solution of the Port’s capital needs in December.

Chair of the Regional Council, Rex Graham, says the Port has tested the 6 Wharf business case against detailed trade and revenue forecasts, design and engineering standards and resource consent requirements.

Mr Graham says he appreciated the huge amount of work the Port staff have put in to preparing this business case.

“What this does reinforce is the need for external capital for Port development as funding 6 Wharf would now be an even bigger hurdle for ratepayers.

“We are fully committed to our original objectives: supporting the Port to invest in its growth, de-risking the Council’s investment portfolio, retaining majority ownership and control of the Port and protecting ratepayers from Port development costs.”

The updated cost of 6 Wharf construction is being built into the final investment case, including updated valuations and financial forecasts, to be considered by the Regional Council in May prior to a final decision on whether to proceed with an IPO.

Napier Port Chair, Alasdair MacLeod, says the Port’s objectives remained focused on delivering an infrastructure asset to serve Hawke’s Bay.

“6 Wharf is a highly strategic, intergenerational infrastructure asset that will ease increasing constraints at the Port and put it in a better position to respond to any future growth,” says Mr MacLeod.

The Regional Council is targeting making a decision on whether or not to proceed with a minority IPO of Napier Port over the next six to eight weeks.

15 April 2019

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