Coastal shipping plans continue despite Govt ditching funding from transport policy

In April members of the Thames-Coromandel District Council’s Sustainability and Community Resilience Committee will discuss coastal shipping options for the region.

It comes after months of work in conjunction with the New Zealand Transport Agency – Waka Kotahi to shore up a plan for transporting freight and people to and from Coromandel in the event of future state highway network disruption. 

Ex-tropical Cyclone Hale caused State Highway 25A to collapse in January 2023, closely followed by Cyclone Gabrielle which temporarily cut off the Coromandel completely.

The council’s recovery manager Stephen Town said while it was taking the lead on “blue highway” options, council staff and Waka Kotahi would be considering the first draft, which is not yet publicly available.  

“Emergency response options are being investigated alongside medium-term options for coastal shipping,” he confirmed.  

In a Waka Kotahi briefing from last year it highlighted a number of wharf options and vessels that could be stood up at short notice. 

These included services from Te Ariki Tahi Sugarloaf Wharf, Hannaford’s Wharf, Kōpū and Whitianga. 

Sugarloaf and Kōpū are commercial wharves used by local aquaculture companies, with Hannaford’s previously used by Fullers for its Auckland to Coromandel passenger ferry service and Whitianga a mixed-use facility. The council fully owns or has a stake in all of them. 

Waka Kotahi officials suggested Sugarloaf (which is due to be upgraded) as “technically suitable” as an important loading point if Coromandel township become isolated for an extended period and Whitianga as the next best option.  

“There is currently suitable wharf infrastructure available in Coromandel to provide short-term contingency access for essential supplies and key commercial goods such as supermarket goods and removal of waste, should parts of Coromandel become inaccessible by road. There are also a number of suitable vessels privately available in and around Coromandel that could be used in a response situation to move these goods.  

“Longer term we consider an open procurement process could elicit a range of innovative, cost effective and flexible opportunities to provide national or regional access to marine shipping solutions for emergency events,” a briefing from June last year noted.  

The suggestion was also made to use funding that would have been made available under the previous government’s transport policy which had coastal shipping designated as an activity class, receiving up to $20 million a year in funding from Waka Kotahi’s national land transport fund.  

However, since then the plan has changed.  

Coastal shipping will no longer be an activity class, with new Transport Minister Simeon Brown signalling the land transport fund should be used for just land transport.  

Where that leaves longer-term investment in coastal shipping for resilience purposes such as in Thames-Coromandel remains to be seen. 

Shipping Federation executive director John Hardboard said it was not a surprise it had been removed from the next Government Policy Statement. 

“We’ve had the signals for probably over a year. Simeon Brown’s thinking was he didn’t necessarily think it was the appropriate fit for Government support for coastal shipping to be paid for by road user charges.  

“His thinking was that if your funding is from road users, then that funding should go back into roads fundamentally, and logically it’s hard to argue with that so it’s not unexpected.” 

He said the previous investment in coastal shipping under the land transport plan had seen some success in getting more freight moved on the “blue highway”. 

After protracted consultations, the former transport minister Michael Wood finally announced $30m funding to Coastal Bulk Shipping, Move International, Swire Shipping and Aotearoa Shipping Alliance in 2022. It was to help each company bring at least one extra coastal vessel into service. 

Coastal Bulk Shipping’s contract was a direct grant (capped) to pay for up to half the cost of getting an additional ship. This was the Rangitata. 

In the wake of Cyclone Gabrielle the Government provided a $500,000 grant and $2.25m underwrite to Eastland Port to charter Rangitata for three months, to bring in vital supplies and ship out what little produce the region was still able to salvage from its devastated farms and forests. 

More recently though it has been struggling to get access to a dry dock to have work undertaken on it, but is still able to operate in some capacity.  

Swire Shipping’s deal via its New Zealand operation Pacifica Shipping was different, with the funding designated as an underwrite for its purchase of a second vessel. 

“Typically, what happens is the first few years you’re operating that ship you’re operating it at a loss as you recoup some of that initial expense. So what the underwrite essentially said was for the first two to three years the Government had set aside some money to essentially cover any loss that Pacifica incur in operating the additional vessel,” Harbord explained.  

“So if the additional vessel broke even, then no funding would go to Pacifica at all … my understanding is with the slowdown of the economy over the last maybe 18 months that has obviously had an impact on the volume of freight that everybody is moving. So I don’t know the dollar figure that Pacifica has got through that.” 

Move confirmed it was backtracking on its plan for a coastal shipping vessel late last year with the National Business Review reporting it was now defending itself against a $3.7m claim from Waka Kotahi for alleged non-performance of a contractual obligation. 

Meanwhile, Ray Mudgway from Aotearoa Shipping Alliance said its barge (now running more than a year over schedule) was finally due to depart for New Zealand in about a month. 

“In 2022, the Aotearoa Shipping Alliance received $7 million from the National Land Transport Programme, which partially funded a motorised barge that will create a sustainable shipping network to resume operating on the South Island’s West Coast and throughout New Zealand.” 

“Preparing for the arrival of the barge has been an enormous amount of work involving a wide range of experts to achieve the highest standards in port operations and shipping. Westport port is operational, Greymouth will closely follow, and our port staff and storage facilities have been operational for more than one year.” 

A dozen staff have so far been employed in anticipation for the barge’s arrival with more to come.  “The demand is strong, our port is ready, our staff are ready, and our barge is on its way within the next few weeks,” Mudgway said.  

Harbord said despite no more direct funding coming from Government, he was hopeful help may come in other ways, such as legislative and regulatory changes.  

“We know that the new Government is very focused on infrastructure, so they’ve been engaging quite intensively with the port sector. And obviously, and, you know, they’ve introduced the fast track consenting process which will undoubtedly assist ports.  

“So coastal shipping will benefit from that infrastructure build and development.”