Lyttelton Port (New Zealand) delays $90m capital spending plan
Lyttelton Port of Christchurch (LPC) has pushed back the timing of a $90m capital spending programme. LPC said yesterday this move had the potential to save millions of dollars as it matched wharf refurbishment with actual customer needs.
But LPC was bullish about its growth prospects for a port served by a strong Canterbury hinterland that places it ahead of rival ports in Otago and Wellington, LPC chief executive Peter Davie said.
The port has readjusted the $90m spend plan first outlined in 2004, hoping to save money and deal with updated customer needs at the same time.
A completed container crane project had cost $18m, part of an overall programme that reflected generally increasing New Zealand port volumes.
"The volume of containers continues to grow from ports right across New Zealand ... it's been growing at 7 per cent to 8 per cent for the last eight years – which are good growth rates," Davie said.
"That is a result of things like dairy, strong import growth ... (but) there's still pressure on for (port) consolidation.
"It's really about are we going to have 13 ports competing for the same trade or are we going to have four or five major ports with major facilities doing it well? Time will tell," he said.
LPC was positive about its growth prospects, given a strong hinterland from an agricultural perspective and a growing city, though car imports were down.
"I look at some of the other centres – Wellington's one – where the container volumes are still the same as the '80s," Davie said.
The port had reduced the amount it planned to spend on an oil berth upgrade from $18m to $10m, with the redesign again taking into account customer needs.
The berth serviced coastal oil and gas tankers as well as other tankers from Australia and Asia.
"We really focused on what the customer needs are there and found that, in fact, the original design was bigger than required, so we've really cut that back," he said.
The company could push out one of the largest projects, the $26m Cashin Quay No. 2 project for a few years and essentially save $7m or $8m due to delays on debt servicing, Davie said.
"We're re-examining timelines on that one – whether it's needed as quickly as we thought (and) and because we're getting better better productivity out of our existing container berths (at Cashin Quay No. 3 and Cashin Quay No. 4).
"But in the meantime you've got to make sure you can serve your customers to the level they expect," he said.
LPC berths were now being used at about 56 to 58 per cent, just below the optimal 60 per cent levels, he said.
"Once you push up towards the 70 per cent mark you get some serious waiting time for customers," he said.
Plant replacement, including new straddle carriers and front-end loaders for coal work, would total $15m, he said.
The remainder of the capital spend programme included smaller $2m to $3m projects such as fender upgrades on berths.
New additions to the overall project were being discussed with customers, including the fishing industry, but yet to be made public, Davie said.
LPC recently signed Lawson Software to provide a new resource planning programme – managing both finances, and asset management and replacement at the port.
But LPC was bullish about its growth prospects for a port served by a strong Canterbury hinterland that places it ahead of rival ports in Otago and Wellington, LPC chief executive Peter Davie said.
The port has readjusted the $90m spend plan first outlined in 2004, hoping to save money and deal with updated customer needs at the same time.
A completed container crane project had cost $18m, part of an overall programme that reflected generally increasing New Zealand port volumes.
"The volume of containers continues to grow from ports right across New Zealand ... it's been growing at 7 per cent to 8 per cent for the last eight years – which are good growth rates," Davie said.
"That is a result of things like dairy, strong import growth ... (but) there's still pressure on for (port) consolidation.
"It's really about are we going to have 13 ports competing for the same trade or are we going to have four or five major ports with major facilities doing it well? Time will tell," he said.
LPC was positive about its growth prospects, given a strong hinterland from an agricultural perspective and a growing city, though car imports were down.
"I look at some of the other centres – Wellington's one – where the container volumes are still the same as the '80s," Davie said.
The port had reduced the amount it planned to spend on an oil berth upgrade from $18m to $10m, with the redesign again taking into account customer needs.
The berth serviced coastal oil and gas tankers as well as other tankers from Australia and Asia.
"We really focused on what the customer needs are there and found that, in fact, the original design was bigger than required, so we've really cut that back," he said.
The company could push out one of the largest projects, the $26m Cashin Quay No. 2 project for a few years and essentially save $7m or $8m due to delays on debt servicing, Davie said.
"We're re-examining timelines on that one – whether it's needed as quickly as we thought (and) and because we're getting better better productivity out of our existing container berths (at Cashin Quay No. 3 and Cashin Quay No. 4).
"But in the meantime you've got to make sure you can serve your customers to the level they expect," he said.
LPC berths were now being used at about 56 to 58 per cent, just below the optimal 60 per cent levels, he said.
"Once you push up towards the 70 per cent mark you get some serious waiting time for customers," he said.
Plant replacement, including new straddle carriers and front-end loaders for coal work, would total $15m, he said.
The remainder of the capital spend programme included smaller $2m to $3m projects such as fender upgrades on berths.
New additions to the overall project were being discussed with customers, including the fishing industry, but yet to be made public, Davie said.
LPC recently signed Lawson Software to provide a new resource planning programme – managing both finances, and asset management and replacement at the port.