NZL sets the stakes for port competition

Freight logistics company NZL Group has submitted its plan to re-establish a container terminal at the Port of Tauranga.

In a move that is likely to provoke legal action from the Port of Tauranga Ltd (PTL), NZL director Ken Harris said the company’s subsidiary, Sulphur Point Container Terminal Ltd, submitted the six-step plan, which allows for its own terminal to be running by January, 2010.

Mr Harris said the proposal, worth “tens of millions of dollars” would provide a more competitive environment for freight movements at the Sulphur Point port and would compete directly against PTL.

“NZL believes that competition creates the best result for the community and exporters in particular,” Mr Harris said.

“Financially, it’s a very attractive proposition.”

NZL Group, which was purchased from P&O Containers in 2006, operated its own container terminal at the port prior to 2004. It then merged its terminal with that of PTL in an arrangement that saw NZL provide labour and machinery to the operation.

The five-year contract has expired and Mr Harris said NZL was unable to reach a realistic commercial arrangement with PTL moving forward.

“So we’ve exercised our right to re-establish a full service container terminal at Sulphur Point,” Mr Harris said.

He said a “backstop” clause in the merger contract allowed for NZL to re-establish an operation at the port. However, acting PTL chief executive Graeme Marshall said the company had a different view on NZL’s right to re-establish an operation there.

He said it was premature for NZL to be making any form of pubic commitment when there are still contractual issues to be resolved.

The port company would need to consider the plan as a landlord, but from a competitive perspective, the finer points of the 2004 contract might eventually be argued in court.

Mr Harris said PTL needed time to digest the six-step timetable before he would make it public. However, he did reveal the plans allowed for the creation of up to 60 fulltime jobs, which is a move away from the “casualisation” of the port.

“The industry has become very casualised and we can create permanent jobs, which has been a big part of our thinking behind all of this.”

Negotiations between NZL and PTL continued for more than 12 months and ended with no resolution last December.

NZL Group is a stevedoring and freight logistics company that offers line haul, container movement, storage and distribution services.

Mr Harris said the company’s plan allows for new machinery including container straddle carriers and upgraded offices.

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