Real Group and Skeggs Group, which respectively operate the Real NZ and Southern Discoveries cruises at Milford, run a company together called Milford Sound Tourism Ltd (MSTL).
The company built and runs significant Milford infrastructure, paid for by tourism levies. It includes a ferry terminal, which opened in 1992, a breakwater, carparks and sewerage system.
MSTL chairman Roger Wilson said the company thought it had the right to run things for 60 years from 1990 to 2050, and had invested $40 million in assets, but the Department of Conservation was arguing that the right expired at the 30-year mark.
Doc had offered an extension until 2028, but MSTL wanted its 60 years, Mr Wilson said.
"Having spent hundreds of thousands of dollars and getting lots of grey hair, we are no closer to an acceptable outcome. If we do not get a reasonable period, we are going to have to contest the forfeiting of our property rights."
Mr Wilson said he understood that in 2028 Ngāi Tahu would be invited to bid for the work undertaken by his company. It was unclear to him what would happen to his company’s assets if Ngāi Tahu decided to bid and won.
Under section 4 of the Conservation Act 1987, there is a requirement for Doc to give practical effect to the principles of the Treaty of Waitangi when making concession decisions. The requirement was upheld in a Supreme Court ruling in 2018 in favour of Ngāi Tai ki Tāmaki and against Doc, which had granted a non-iwi tourism company the right to guide on the Motu islands without considering iwi rights.
Ngāi Tahu Holdings Corp chief executive Todd Moyle said his company "recognises the economic potential of Piopiotahi [Milford] and remains open to exploring future investment opportunities".
"Any such decisions will be guided by the aspirations and direction of the eight Ngāi Tahu papatipu runanga, who hold mana whenua in the region, ensuring that any development aligns with their values, tikanga and long-term vision for the area."
Mr Wilson said his company had made pleas to Conservation Minister Tama Potaka to let MSTL continue to run Milford until 2060. There are more than 200 exchanges between the company and Doc about the matter.
The company had continued to invest, including $700,000 upgrading the sewage plant at Knobs Flat, but was now holding back on other upgrades, including the ferry terminal, due to the future uncertainty, Mr Wilson said.
"They [Ngāi Tahu] will have advantages that a private company will not have. Therefore, our ability to contest is pretty unlikely in our board’s view."
Mr Potaka said no decisions had been made regarding MSTL.
"I am awaiting further advice from Te Papa Atawhai — the Department of Conservation."
MSTL was initially set up in 1990 as the Milford Sound Development Authority (MSDA). It benefited, at that time, from a government grant and loan guarantee, but reregistered as a company in 2016 with a name change reflective of its two shareholders’ commercial interests. The companies have 49% of MSTL’s shares each and 2% is held by the Southland District Council.
Rosco’s Milford Kayaks owner Rosco Gaudin described Milford as "broken" and said having a development authority had initially been a "sound model", but MSTL was now there for the money.
"The leopard has changed its spots. MSTL is all about profit and looking after its shareholders, who are the two major companies [in Milford]."
In a separate pressing problem, dozens of fixed-term tourism permissions granted by Doc have expired, including permissions held by Real Group and Skeggs Group as well as another four companies to operate cruises. They are being allowed to continue operating on a rolling basis, but have no tenure security.
A Doc plan for Fiordland National Park expired in 2017 and an $18m planning exercise called the Milford Opportunities Project (MOP) has shut down and resulted in no announcements. Mr Wilson said the MOP had "stymied development" for the years it had been under way.
Doc is now consulting on legislative changes that could streamline permissions processes and simplify things.
Doc southern South Island director Aaron Fleming said the organisation "acknowledges the challenges Milford operators face while Doc processes a backlog of concessions" and recognised there was a desire for greater certainty.
In Monday’s ‘ODT’
Tired, expired and needing a fair plan
