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 owner 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.

The business case approved by the Napier Port Board includes an updated estimate of the projected investment required of approximately $170 – $190 million, compared with an initial estimate from the middle of 2018 of approximately $142 million.

Regional council chair Rex Graham says the port tested the 6 Wharf business case against detailed trade and revenue forecasts, design and engineering standards and resource consent requirements.

“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 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.