ORC: Ports merger only approved if it benefits Otago

It would be wrong not to consult the port’s owners, the ratepayers, over merging with another port.

### ODT Online Thu, 11 Mar 2010
Public consultation over merger of ports
By Eileen Goodwin
Otago Regional councillors yesterday voted to consult the public over a possible merger between Port Otago and Lyttelton Port, despite deeming such a move to be insignificant. Port Otago is expected to make a formal recommendation on a merger proposal to the regional council this year.
Read more

Other stories:
Cairns gets in ahead of criticism
ORC toughens consents stance

Posted by Elizabeth Kerr


Filed under Economics, Geography, Politics, Project management

12 responses to “ORC: Ports merger only approved if it benefits Otago

  1. Elizabeth

    You’re a wee bit late, chaps…why didn’t you speak up months ago? And why didn’t the ODT get onto this MUCH earlier. Do we really want to lose port operations to marauding/CONTROLLING Auckland interests. NO WE DON’T. But this is the way it’s heading through the complete naiveté of the POL board (who can’t see their way out of a paper bag). I’m glad ODT at least has the grace to publish the second paragraph I’ve caught here.

    ### ODT Online Sat, 14 Aug 2010
    Otago seen as loser in proposed port sale
    By Simon Hartley
    The proposed merger between Port Otago and rival Lyttelton Port of Christchurch is being roundly criticised by former port company chairmen Sir Clifford Skeggs and Ian Farquhar, with both men calling for the idea to scrapped. Business reporter Simon Hartley looks at why the pair are so adamant the deal is no good for Otago.

    The scene is set for the almost two-year-old proposed merger between Port Otago and Lyttelton Port of Christchurch (LPC) to become one of the most contentious issues faced by southern local bodies and ratepayers in decades.

    Mr Farquhar and Sir Clifford are demanding the public be fully informed well in advance of the proposal becoming a fait accompli.
    Read more

    • Elizabeth

      Port merger between Port Otago Ltd and Lyttleton Port of Christchurch CALLED OFF by LPC due to earthquake.

      7.15pm Waiting for media news to pronounce… *yawn*

      • Elizabeth

        ### ODT Online Fri, 1 Oct 2010
        Earthquake halts merger talks between Otago, Lyttelton ports
        Merger talks between the ports of Lyttelton and Otago have been halted as a result of damage caused by the Canterbury earthquake. In a statement today the two companies said Lyttelton Port Co was not in a position to continue merger negotiations and the two boards had “reluctantly” agreed to halt the talks. Lyttelton Port suffered significant damage to port infrastructure and facilities, which 
were fully insured. Given the magnitude and priority of the reinstatement works, it was not possible to continue merger negotiations, the statement said. NZPA
        Read more


        Media Release Announcement from LPC and POL
        01 October 2010
        – click here

        • Elizabeth

          What else is LPC not telling us? Insurance payouts for earthquake damage are likely to help bring their delapidated port up to standard after years of under investment. Is there another deal on the table besides the proposed merger with POL, with the earthquake damage being a ticket to ride for LPC? What does the POL board know but isn’t saying?

          ### ODT Online Sat, 2 Oct 2010
          Ports put merger on backburner
          By Neal Wallace
          The Lyttelton Port Company has ended merger talks with Port Otago – just weeks before the two boards were to consider a proposal – so it can focus on repairing damage after last month’s earthquake. But there still appears to be a desire for the merger to proceed, with both Port Otago chairman John Gilks and Lyttelton Port Company deputy chairman Bill Luff both expressing a desire to resume talks in the future.
          Read more


          This season: 68 cruise-ship visits; 122,000 passengers; $40 million economic boost.

          ### ODT Online Sat, 2 Oct 2010
          42% rise in cruise visitors
          By Hamish McNeilly
          A record number of cruise ships will visit Dunedin this season, pumping tens of millions of dollars into the local economy. With both cruise-ship numbers and vessels’ capacity expanding, passenger numbers to Dunedin are projected to rise from 86,000 last season to 122,000 this season, a rise of 42%. The arrival of the Sapphire Princess on October 19 heralds the start of the 2010-11 season, with 68 visits scheduled for Dunedin and even more scheduled next season.
          Read more

        • Elizabeth

          Another right parking mess, with lack of timely consultation. DCC hasn’t really understood ANY of the issues it has created by meddling with city parking, has it? Time to send all DCC staff off to a special course: “What is a small business? Why you don’t muck with a small business?”

          5.10.10 ODT: Road closures concerning businesses
          6.10.10 ODT: Urgent review of cruise ship bus plans

          ### ODT Online Wed, 6 Oct 2010
          Editorial: The boat comes in
          Dunedin is abuzz when a large cruise ship docks at Port Chalmers. The pavements are bustling and the shops are busy, even when only a reasonable proportion of the 2000 or more passengers flocks to the city centre. Most inconveniences are minor compared with the benefits the industry brings.
          Read more

  2. janet

    So the proposed ‘merger’ is on the backburner. But it’s not a merger – its a reverse takeover – Lyttelton getting the head office, asset stripping Port Otago and John Gilks thinks it’s a great idea and will make money for the ORC. Short-term thinking. What of the long-term consequences?
    Where’s the public consultation? Here’s hoping for new blood on the ORC, some brains to see past the hype, people with vision about our port’s future vis a vis the cruise ship sector and the possible oil industry supply base for starters.

    • Elizabeth

      The merger proposal isn’t totally off the books – or is it? One thing has been very evident in the newspapers is that historically, LPC has been much more vocal in The Press about the merger than has POL in the Otago Daily Times. You might very well ask why.

      If the merger between LPC and POL goes ahead it involves the formation of two corporate entities, one of them would be locally based to see to our port’s Operations… but unfortunately some management (POL senior management staff – and POL board members?) are toying with the idea to hock this enterprise off to the interests of an Auckland-based individual who has been grabbing the ‘operations’ of other New Zealand ports. Doesn’t take much research to work out who.

      Also, Lyttelton, as the potential ‘partner for merger’ has a lot of Port Otago Ltd’s commercial information… An audit of POL’s Marine Division is coming up. More ‘audit’ material from POL will be used how, in light of the Auckland gentleman…

      And ORC, owner of Port of Otago, fancies the merger going ahead – like the total bunch of dimwits they really are.

      • Elizabeth

        ### ODT Online Mon, 18 Oct 2010
        Port merger elements revealed
        By Simon Hartley
        The full details of whether the proposed merger between Port Otago and Lyttelton Port of Christchurch was viable are unlikely ever to be divulged, other than it would have cost Port Otago’s 100% owner the Otago Regional Council tens of millions of dollars to buy into the partnership.
        Read more


        ### ODT Online Mon, 18 Oct 2010
        Editorial: Bigger ships and ports
        When, in August this year, the “Port Performance and Ownership” report prepared by the New Zealand Institute of Economic Research for the Local Government Forum was published, it drew some controversy for suggesting local authority ownership of ports should be abandoned in favour of commercial shareholdings as a way to encourage efficiencies and more beneficial port-to-port relationships. In the context of the suspended merger talks between Port Otago and Lyttelton, the report was viewed in some quarters as provocative, particularly in Otago where, it was claimed, the container terminal at Port Chalmers already functioned competitively and delivered consistent dividends to the Otago Regional Council.
        Read more

  3. Elizabeth

    CCC launched a formal takeover for Lyttelton Port of Christchurch on Friday and struck “a “lock-in” agreement with Port Otago to sell”, giving the council more than a 90% stake. It will now “compulsorily acquire the remaining about 5% of shares, and delist LPC from the stock exchange”. (via ODT)

    ### ODT Online Sat, 2 Aug 2014
    Port Otago reaps profit
    By Simon Hartley
    Port Otago has reaped a massive profit selling its contentious shareholding in rival Lyttelton Port of Christchurch (LPC) for $65.7 million, a 77% gain on the investment. The port company, 100% owned by the Otago Regional Council, will use all the windfall cash to slash debt, from $110 million to about $45 million, Port Otago chief executive Geoff Plunket said when contacted. […] Port Otago chairman Dave Faulkner said the board had decided the 15.48% stake no longer had the strategic importance which applied at the time of the purchase.
    Read more

    • Watersider

      The journalism at the Oddity just gets worse.
      How did Simon Hartley get the idea that Port Otago reaped a massive profit selling its shareholding in the Lyttelton Port ?
      “77% gain on investment”, but hold on Simon. That was over 8 years, and that breaks down to about a 9.60% pa return over the time that the port held the shares, for no dividend.
      In the meantime the Port Otago accumulated a massive debt of over $110 million, probably with an interest rate greater than the return on selling the Lyttelton shares.
      It would have probably been better to have paid off debt rather than obtain a share holding in Port Lyttelton. That was supposed to be done as a strategic move. That appears to have backfired on them also. As they thought that they had the front door covered. OOPS someone sneaks in the back door and steals the Timaru port. Now that was a strategic move, but not a good one for Port Otago.

  4. Elizabeth

    ### ODT Online Sat, 2 Aug 2014
    ORC ups its insurance
    By Rebecca Fox
    Fallout from the Rena grounding off Tauranga’s coast has led the Otago Regional Council to nearly triple its insurance cover for harbour incidents.
    Read more

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