Asbestos contamination was found in the roof panels of a 325m-long shed in Fryatt St, in the upper harbour area, in late February. The site was cordoned off and tenants were relocated from the sheds.
Two and a-half months on, Port Otago chief executive Kevin Winders said it had been a "slow process" and "not straightforward" to test, clean the shed and formulate the demolition plan.
Holes had been knocked through internal walls to consecutively assess each of the 10 tenants’ equipment, which was either cleaned by Port Otago subcontractors or disposed of and financial reimbursement made.
"There’s been independent assessments to establish if items could be cleaned or have to be destroyed," he said.
Mr Winders said items such as tanks could be cleaned, while carpets, air conditioners and rope could not be cleaned.
When asked about disposal of those items and, later, the hundreds of tainted Super Six, 1950-60s roof panels, he said they would go to the Green Island landfill, where there was a designated hazardous materials site.
Disposal at the hazardous site cost five times more than normal user charges, he said. Mr Winders said an earlier cost estimate of $2 million to $3 million was now "circa $3 million", but the latter was still "subject to change and further testing" costs.
Mr Winders was asked how Port Otago would pay for the clean-up: from its annual cash-flow, reserves or using a debt facility.
"It has certainly taken the gloss off the year," Mr Winders said.
However, he said despite the clean-up cost, Port Otago was "otherwise still on budget" and the cost would not put the ORC’s annual dividend at risk.
Port Otago’s last half-year dividend to the ORC was $3.5 million and the previous full financial year dividend was $7.5 million, similar to those of the previous three years.
Port Otago is preparing an application for resource consent to demolish the shed.
Mr Winders hoped that would be granted by June, at the same time a tender would be out for the demolition. Subject to consents and contractor availability, demolition could begin in July, he said.
