Depending on Port of Tauranga's transport strategy, the $21 million move raises the potential for increased options for southern exporters and possibly more competition for Port Otago, but Lyttelton could be more threatened.
In the past two years, Port Otago has
picked up almost 10,000 extra containers annually because of PrimePort's situation, but does not see Tauranga's presence as a threat, and is confident of maintaining its present, small ''share''.
Port Otago chairman Dave Faulkner said he was ''surprised'' by the alliance, but had no immediate concerns Tauranga was looking too far south to fill its ships, noting Port Chalmers offered the ships and fixed rates with direct routes to destinations, particularly those for time-sensitive refrigerated meat exports.
''I'm struggling to understand how Port of Tauranga moving there will attract shipping lines,'' Mr Faulkner said.
Since PrimePort's decline from handling 80,000 containers of mainly Fonterra produce in 2008, Lyttelton had picked up most of that work, and Mr Faulkner said Lyttelton might face more of a threat from Tauranga's presence.
He was adamant Port Otago's PrimePort presence could be maintained and it would retain its ''share of containers''.
PrimePort is not a deepwater harbour and, while it is next to Fonterra's Clandeboye plant, has fallen on hard times in recent years with the loss of several shipping lines and local jobs.
Mark Willis, of freight movers DCB International in Dunedin, said the move was a ''shrewd way for Tauranga to get a foot in both camps''.
Ports of Auckland's labour dispute had delivered a ''massive switch'' of Maersk containers permanently to Tauranga and the PrimePort stake would be used as a ''feeder'' to Tauranga.
''This is likely more detrimental to Lyttelton than Port Otago because the Fonterra [Clandeboye] exports could go to Tauranga,'' Mr Willis said.
The likelihood was of large ships requiring only one major deepwater port in each island in New Zealand, he said.
Tauranga is offering $21.6 million to get a 50% stake in PrimePort, which includes leasing the container terminal for up to 35 years, acquiring the terminal operating assets and having a new Port of Tauranga subsidiary.
PrimePort chairman Roger Gower said the alliance would result in redevelopment at PrimePort and transport infrastructure around the region and ''flexible and cost-effective routes to and from international markets for South Island exporters and importers''.
Port of Tauranga chief executive Mark Cairns said there were opportunities to expand PrimePort as a ''marshalling point for South Island cargo'', allowing South Island exporters and importers to benefit from Tauranga's many international services.
They would share in ''significant freight savings'' when the larger ''next-generation'' container vessels came to New Zealand, he said.
Tauranga's southern stake adds another layer of complexity to the South Island's shipping sector, as 100% Otago Regional Council-owned Port Otago maintains its 15.5% blocking stake in deepwater rival Lyttelton Port of Christchurch, which is majority-owned by the Christchurch City Council.
In the proposed deal, which requires Timaru District Council approval, Port of Tauranga will buy the 28.57% stake held by nine local investors through Port Industry Holdings Ltd and 21.43% from the Timaru council. Port of Tauranga and the Timaru council will thus have a 50% stake each.
Public consultation on the deal opens on Saturday and should be completed by September 17, the Timaru council meeting on October 8 to make its final decision.
If it goes ahead, the deal will go unconditional on October 11, Port of Tauranga beginning operations on December 1.
For export
South Canterbury produce for export
Freight catchment includes second-largest dairy processing plant in the world; largest wool scour in the southern hemisphere; five export meat-processing plants; five export timber plants; five export fishing companies. More than 75% of the South Island's population lives within a 200km radius of PrimePort.
Source: Port of Tauranga
