Thursday, April 25, 2024

Picton ferry finance consultation ends

Consultation on whether Marlborough District Council should raise a loan to finance Port Marlborough’s share of the Waitohi Picton Ferry Precinct Redevelopment has closed, with 27 submissions received.

Of those received, 12 submitters said they wish to speak to their submission at the upcoming hearings set down for 17 and 18 February. The Mayor and all councillors will make up the hearings panel who hear the submitters, Council said in a statement today.

“Port Marlborough has successfully negotiated an agreement that would see the redevelopment of the Waitohi Picton ferry precinct and KiwiRail commit to the region for at least 30 years,” Council said.

“New Interislander ferries have been ordered, due to arrive in 2025, and without this redevelopment the Port would not be able to handle these larger vessels.”

Mayor John Leggett says the significant proposal to on-lend $110 million to the Port would not increase rates or cost ratepayers, but rather increase dividends to the Council to over $6 million, offsetting the need for future rates increases.

“Additionally, the proposal would not increase the cost of debt for other Council capital borrowing,” Mayor Leggett said.

“After a review in November, Council retained its AA+ credit rating from S&P (formerly Standard and Poors), keeping its status as one of the top-rated local authorities in New Zealand, only just below the New Zealand Government’s AAA rating,” he said.

Under the proposal, Council would raise debt through its existing arrangements with the New Zealand Local Government Funding Agency (LGFA). The agency specialises in financing the local government sector, to provide lower costs and alternative funding sources for local authorities and council-controlled organisations. If Port Marlborough sought financing through private lending, Council estimates interest to be 1 to 1.5% higher, which would take longer to service the loan and lower future dividends to Council.

Following the hearings, Council will meet during the afternoon of Friday 4 March to make its final decision on the financing proposal.

For more information about the iReX project visit: www.irex.co.nz

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