http://www.stuff.co.nz/stuff/0,2106,3600067a13,00.html
By DAVID KING
The Otago Regional Council grilled its port company about its intentions before agreeing to let it embark on a sneak raid on Lyttelton Port of Christchurch’s (LPC) shares.
Port Otago pulled off a lightning raid on Thursday to grab a 10.1 per cent blocking stake in LPC that could potentially stymie the port’s proposed deal with Hong Kong’s Hutchison Port Holdings (HPH).
That deal has the backing of the Christchurch City Council, which wants to hang on to its port assets but set up a new operating company with HPH, which is the world’s biggest container port operator.
Christchurch City Holdings Ltd (CCHL), the council’s investment arm, has launched a 210c offer for the 31% of the port it does not own.
But Port Otago trumped that offer by agreeing a deal with the port’s biggest institutional investors, spending about $24 million to secure a say in the future of the rival port.
The Otago Regional Council owns 100% of Port Otago, and chairman Stephen Cairns said the port business referred its plan to the council before embarking on the $24m raid.
Cairns said the council’s port liaison committee, which he headed, sought reassurances from the company that it was not a negative move.
“We were assured, and we trust them, that it simply isn’t a spoiling tactic. It’s a strategic move,” he said.
“We canvassed that because we don’t want to be warring with another local authority.”
Cairns said that if it had been intended to stymie the Lyttelton deal, he could not have supported it.
Port Otago’s move yesterday won plaudits from the unions, which are not keen to see HPH, which is owned by Hong Kong tycoon Li Ka-shing, run the port’s operations.
The deal’s supporters believe it will shore up Lyttelton’s position in a rapidly consolidating industry.
The Maritime Union of New Zealand and the Rail and Maritime Transport Union said Otago’s move put the Hutchison proposal in doubt.
Maritime Union general secretary Trevor Hanson said the move was a positive one for the industry.
“New Zealand is at the mercy of international shippers who use their bargaining power to play ports off against each other in an inefficient and destructive competition,” he said.
“We don’t want to worsen the situation by further multinational control, and the Port Otago development is a good one, in our view.”
Hanson said ports needed to work together, in public ownership, to ensure industry stability and a quality export and import service not controlled by global shipping and port conglomerates.
“New Zealand is dependant on shipping and ports, and to allow more infrastructure to be controlled by the global multinationals would be economic and political suicide,” he said.
Rail and Maritime Transport Union general secretary Wayne Butson said it was lunacy to sell controlling interests to foreign multinationals of vital infrastructure assets like ports.
“We hope this move by Port Otago will preserve the benefits that are generated for New Zealanders, particularly for those who live in the Otago and Canterbury regions, and in particular employment opportunities,” he said.
Christchurch City Council spokesman Bryn Somerville said yesterday that CCHL had agreed to pay the council a special $17.9m dividend before the end of June, and this would proceed whether the port deal went ahead or not.
Somerville said CCHL dividends paid to the council over the next 10 years were based on conservative figures and did not include “built-in optimism”. The port was only one part of CCHL’s large portfolio, he added.
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