Posted on April 11, 2019
Possible listing candidate Napier Port said the cost of its planned new wharf development – 6 Wharf – had gone up to $170-$190 million from last year’s estimate of $142m.
The port’s owner, the Hawke’s Bay Regional Council, said the increase reinforced the need for external capital at the facility.
The council said it expects to make a final decision on the 33 to 45 per cent partial float of the port in six to eight weeks.
A report to the council last year said the port needed $320-$350m over 10 years for it to support the growing Hawke’s Bay economy.
About half of that cost was for the construction of the new wharf.
Approval for the development was a condition set by the council prior to a final decision on whether to approve the minority initial public offer.
The new, higher estimate of the development’s cost based on developed design work undertaken since the Regional Council confirmed its in principle support for a financing solution of the Port’s capital needs in December.
“What this does reinforce is the need for external capital for Port development as funding 6 Wharf would now be an even bigger hurdle for ratepayers,” Council chair Rex Graham said in a statement.
“We are fully committed to our original objectives: supporting the Port to invest in its growth, de-risking the Council’s investment portfolio, retaining majority ownership and control of the Port and protecting ratepayers from Port development costs,” he said.
The updated cost of 6 Wharf construction is being built into the final investment case, including updated valuations and financial forecasts, to be considered by the council in May prior to a final decision on whether to proceed with an IPO.
Source: nzherald.co.nz
