Strong future aim of port deal
Ensuring the Port of Lyttelton remains the South Island's main sea freight terminal is behind a City Council move to team up with a Hong Kong- based port operations company.
The Council's investment arm Christchurch City Holdings Ltd (CCHL) last month said it planned to buy the 31 per cent of Lyttelton Port Company (LPC) it does not already own. It offered shareholders a 20 per cent premium on the stock market price for the shares.
If the takeover bid succeeds, CCHL will remove the company from the New Zealand Stock Exchange (NZX) and begin a partnership with Hutchison Port Holdings Ltd (HPH) to operate the port.
Bob Lineham, chief executive of CCHL, says Hutchison Port Holdings is independent of the world's big shipping lines. It is the world's leading port manager, developer and investor, with involvement in 242 berths in 41 ports and 20 countries. It has considerable expertise in container handling and information systems.
He says concern has been growing about Lyttelton's ability to continue attracting shipping in a market more and more dominated by major lines. "These challenges result largely from the amalgamation of shipping companies which are increasingly able to play off one port against another while driving down port charges to sometimes unsustainable levels," he says.
Other ports in similar situations have decided the best solution was to join forces with a strong international player like HPH but this would be a first for New Zealand, says Mr Lineham. The partnership will help shift the balance of power for a very small port on the international maritime scene.
"HPH is also one of the largest port operators in China, and this is timely for the South Island as New Zealand seeks a free trade agreement with China," says Mr Lineham.
HPH is part of Hong Kong's Hutchison Whampoa Limited, a long-time trading company which operates in 52 countries, has more than 200,000 employees and turns over around $US23 billion a year.
Two New Zealanders, Richard Pearson and Mark Jack, are executive directors of HPH and took a leading role in negotiations with CCHL. "We're pleased to see there's a strong New Zealand influence in HPH's operations," he says. "Mark and Richard are both aware of the importance of the port to Christchurch and Canterbury."
The plan means the Council, through City Holdings, will keep control of the Port of Lyttelton, and all employment agreements at the port will be unaffected by the joint venture. A new port operating joint-venture company will be set up and its dividends shared equally between the partners.
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