Mayor sidesteps 'what if' scenario during Zoom meeting on ferry terminal loan

11:53 am on 20 January 2022

Marlborough Mayor John Leggett has been asked what will happen if the community "overwhelmingly" rejects a "significant-proposal" to lend Port Marlborough $110m.

Ferries at the terminal in Waitohi Picton.

Ferries at the terminal in Waitohi Picton. Photo: Supplied / Stuff / Scott Hammond

The proposal, announced late last year, would see the council borrow from the New Zealand Local Government Funding Agency, so the port could fund its share of the Waitohi Picton ferry precinct redevelopment.

The question to Leggett came from a member of the public at the first public meeting for the consultation process on Monday night, attended by 32 people over Zoom.

A second public meeting, to be held in person, will take place at Endeavour Park Pavilion in Waitohi Picton, on Wednesday at 7pm.

Asked what would happen if the public were to "overwhelmingly reject" the proposal, Leggett said this was "one of those 'what-if' questions".

"And I'm going to answer it like this; councillors approach the consultation and the deliberation process with an open mind," Leggett said.

"What I will say is we invite community participation in this process. Submissions are not just about those opposed to MDC participation in this project, we also invite submissions in favour of the participation, as we've outlined tonight."

Marlborough District Council chief executive Mark Wheeler and Marlborough Mayor John Leggett.

Marlborough District Council chief executive Mark Wheeler and Marlborough Mayor John Leggett. Photo: LDR / Chloe Ranford

He said good decisions were always the result of "good research and information".

"So anyone that's considering making a submission, I ask you to please read the statement of proposal. I'm suggesting having a look at the presentations from tonight which will be available on the website and make their submission," he said.

In its proposal, the council assured ratepayers it would not cause a rates increase.

The council would raise debt through its existing arrangements with the New Zealand Local Government Funding Agency, which specialised in financing the local government sector, to provide lower costs and alternative funding sources for local authorities and council-controlled organisations.

Leggett was one of many who presented at the Zoom meeting. Others included Marlborough District Council chief executive Mark Wheeler, Port Marlborough chief executive Rhys Welbourn, Marlborough Harbourmaster Luke Grogan, as well as representatives from KiwiRail and Waka Kotahi New Zealand Transport Agency.

New Interislander ferries were due to arrive in 2025, and Waitohi Picton would not be able to handle the larger boats without the redevelopment. The contract price for the two ferries was $551m.

The entire project, including the two new ferries and the terminal infrastructure at Kaiwharawhara in Wellington and in Waitohi Picton, was expected to come in at $1.45 billion. The Government had so far committed $435m.

One attendee asked whether the interest rate between the council and Port Marlborough would be the same as what the council would repay to the New Zealand Local Government Funding Agency.

But Marlborough District Council chief financial officer Martin Fletcher said it was important to remember the council, MDC Holdings Limited, and Port Marlborough were all part of one group.

"As a result, we are planning to on-lend at cost. The reason for that is there is no benefit ... by actually adding a margin," Fletcher said.

He said adding a margin for Port Marlborough would reduce their profits, therefore slashing the amount the council would receive in dividends.

Another asked whether the council could raise some of the $110m locally, through an infrastructure bond.

"It would be great that locals had sufficient confidence in this process, that they were prepared to invest their own money into it," Fletcher said.

"I would actually be recommending that we use the financing agency to finance the project, and not actually extend that offer to individual people.

"The main reason for this, is actually simplicity... we're only borrowing from one organisation, as a result of that we're only having to manage one relationship, and only having to pay interest to one particular organisation."

Consultation for the proposal is open now, and closes on 4 February. Submissions will be heard in late February, and a decision will be made at full council on 4 March.

Those unable to make the public meeting on Wednesday night, could also attend "drop-in" sessions at the Whitehaven Room, ASB Theatre from 9am to noon on Thursday, or at Endeavour Park Pavilion from 2pm to 5pm.

To make a submission, people could email or fill out an online form on the Marlborough District Council website. Hard copy submissions was also welcome, and could be collected from the council's Blenheim or Picton office, or Marlborough libraries.

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