Frequently Asked Questions

Next Generation announcement

Ship Channel Deepening

Sheet piling

Warehouse expansion

New tug and barge

Next Generation announcement

What is Next Generation Port Otago?

Next Generation Port Otago is a long term programme of infrastructural expansion designed to position Port Otago for the commercial demands of the next generation. Port Otago has commenced a $45 million capital works programme designed to elevate the Port’s operating efficiency and productivity. These projects are:

  1. Deepening of the shipping channel to 14 metres by December 2016
  2. Deepening the berths and sheet piling to support the wharf
  3. Warehouse expansion at both Port Chalmers and Sawyers Bay
  4. The purchase of a new tug and barge
  5. Wharf extension

This next stage of capacity expansion follows on from a 10-year programme of capital investment including the purchases of a new 68-tonne bollard pull tug, a new pilot launch, two new container cranes and a number of four-high straddles.

Why do we need to expand the Port’s capacity?

Port Chalmers is a key link in New Zealand’s international supply chain as a regional hub for the export of high value products including meat, dairy, timber, fish, horticulture and other agriculturally based products. The advent of larger container vessels is a commercial certainty as export volumes increase. Currently the biggest container ships that call at Port Chalmers have a nominal carrying capacity of 4,500 twenty foot equivalent units (TEUs), are about 267m in length, 37m wide with a maximum draft of 13.5m. The next generation of ships could have a carrying capacity of up to 6,500 TEUs, will be up to 320m long, 42m wide and require a draft of 14m.

How will this position Port Otago versus other New Zealand ports?

Port Otago is the first New Zealand port to secure consent to deepen its channel for larger ships and the first New Zealand port to begin actual dredging. Only one other port has consent to deepen at this stage and their dredging programme is not expected to start before the end of 2015. Port Otago currently handles around 200,000 TEUs per year, the third largest in New Zealand by cargo value. Over the past decade cargo volumes at the Port have increased by more than 300%, staff numbers have more than doubled to 300 and the economic value to the community is estimated at more than $200 million per year.

Will other ports be able to match Port Chalmers by deepening their channel?

The nature of Otago Harbour, and its tidal flow, means that shipping is able to arrive and depart at all stages of the tide.  Vessels with a draft of 12.3m or less have unrestricted access to the Port and can arrive or depart at any time of the day.  This unrestricted draft will increase to 12.8m by mid-2017. Strong tidal flows in other ports mean that they are not able to provide this level of unrestricted access, necessitating arrivals and departures around high or low tide only.

Will this mean the Port will be handling higher volumes?

The decision to deepen the channel is in line with commercial demand and growing cargo volumes in the lower South Island. This also reflects the findings of the Ministry of Transport's Future Freight Scenarios Study (2014).  Maintaining our relevance within the international supply chain requires ongoing development, ensuring we can cater for the next generation of container ships with cargo capacity between 6,000-8,000 twenty-foot equivalent units (TEUs) and that there is enough cargo available to fill those bigger ships for decades to come.

What consultation has and is taking place in relation to Next Generation?

Extensive consultation has already taken place during the consenting stage of the project. A key part of that was the establishment of an independently chaired Project Consultative Group, which included representatives from Otakou and Huirapa Runanga, DOC, Otago Regional Council (ORC), Dunedin City Council, Port Chalmers Community Board, Port Environment Liaison Committee, commercial and recreational Harbour users, Port Otago and other community representatives. This group met regularly during the initial stages of the programme up to the hearing of the consents.  The Technical Group has met on 8 occasions since late 2013 assessing and overseeing the baseline monitoring required prior to work commencing.  This group will continue to meet on a two to three monthly basis whilst work is underway, evaluating the monitoring, and making recommendations for improvements to monitoring or work, and ensuring the implementation of the Environmental Management Plan (EMP). Additionally, the Manawhenua Consultative Group (MCG) is responsible for communication between the various project parties and representatives of the local hapu and iwi, especially in relation to cultural impacts.

How will Port Otago fund the $45 million spend?

Port Otago has a strong balance sheet and is in a good cash position, following the sale of its Lyttelton Port Company shares.  The development will be funded through internal resources and within existing bank facilities.

Shipping channel deepening

 Why is it important to deepen the channel?

As container ships inevitably increase in size, the ability to handle these ships will determine which ports remain relevant to the international supply chain. The ports that can handle larger ships will become the premier ports on the New Zealand coast and over time, growth will be concentrated on these key gateways. Port Otago has secured consent to deepen the channel to a maximum of 15 metres though the current intention is to deepen the existing channel to 14 metres over two stages by December 2016.

How much material will be removed and how will it be disposed of?

Port Otago holds resource consents to remove up to 7.2 million cubic metres of material from the channel. However the 14 metre depth over two stages will require approximately 1.5 million cubic metres of dredging. The New Era, a trailing suction dredge owned by Port Otago and used for maintenance dredging through Otago Harbour and out to the fairway buoy off Taiaroa Head, will be used for the dredging. The majority of dredge material will be disposed of at the A0 offshore (Consent 2010.198) with some disposal to the Heyward Point and Aramoana sites (Consent RM11.153). This will occur only after turbidity (amount of suspended material in the water) monitoring buoys are in place.

What will it cost to deepen the channel?

The total cost to deepen the channel to 14 metres is estimated at less than $10 million. This is significantly less than cost estimates for other New Zealand ports to deepen, as about 50% of the existing channel is already at 14 metres and Port Otago will be using its own dredge, New Era, to complete the work.

What steps have been / will be taken to mitigate the environmental impact of this work?

As part of the resource consent process, Port Otago commissioned comprehensive technical reports to determine the biological, ecological and physical environmental impacts of dredging on the Harbour. Reports were also prepared on the cultural and economic impacts of the Harbour deepening. There were no significant environmental or other issues uncovered by the reports, either in relation to sediment transport or impact on birds or mammals. Dredging and disposal will be done in line with the specific conditions of the consent (Consents 2010.193, 195 and 198) and under the guidance of the Environmental Management Plan.

Will the deeper channel make it possible for larger cruise ships to berth at Port Chalmers?

The new Quantum class of cruise ships (348m long by 42m beam) are scheduled to arrive on the New Zealand coast in the 2018/2019 season. These ships have a maximum draft of 8.8m so channel depth is not an issue. However, they are much wider and longer than any of the ships currently calling at Port Chalmers. Port Otago is completing a series of simulation exercises to ascertain what, if any, modification will need to be made to the existing channel to accommodate these larger ships. It is possible that these larger cruise ships will be able to enter Otago Harbour, with our existing channel configuration, but only under certain conditions and at certain times of the day. To increase the amount of time available for these new ships to enter the Harbour, we may need to straighten the shipping channel in one or two places in the future.

Sheet piling

 What does ‘sheet piling’ entail and why is it necessary?

It is a very important part of the project. As the Port is deepened we also need to deepen the berths where the container vessels sit while they are being loaded and unloaded. The container wharves feature a piled wharf structure with a rock slope underneath the wharf which supports the reclamation and container yard behind. This slope is stable with the current berth depth of 13m but the necessary deepening required to cater for larger ships means Port Otago must safeguard the wharf structures by driving a row of “sheet piles” along the berth line, essentially an underwater retaining wall. The sheet pile wall will extend above the current seabed level by less than one metre and requires the piles to be driven from the flat wharf structure, 18m above. Once the sheet pile wall is in place the deepening of the berth can proceed in line with the channel deepening project.

Will there be any disruption to operations as a result of this work?

In order to maintain one working container wharf at all times, Port Otago split the construction project over two years with the Container Berth No 1 (container wharf closest to Port Chalmers township) being completed in 2015 and the outer Container Berth No 2 (Multi-purpose wharf) completed in 2017. The sheet piling can’t be undertaken while vessels are at the berth meaning that between July and mid-October 2017 the outer container wharf will be closed to all vessels. This timing coincides with the low export season and also ensures completion before the commencement of the cruise ship season.

Has this work been consented and are there any conditions?

Yes, the primary environmental issue is construction noise. Work must comply with the New Zealand construction noise standard (NZS6803: 1999) with pile driving work only taking place between the hours of 6.30am and 8.00pm Monday to Saturday inclusive.

Warehouse expansion

What is happening with warehousing?

There are two separate projects within the warehouse expansion:

  1. Port Chalmers - expansion of existing Back Beach warehouses, increasing ‘on-wharf’ dairy storage capacity by 25%
  2. Sawyer’s Bay - development of an additional 3,800m² warehouse, increasing overall warehousing capacity by 10%.

Why are we expanding warehousing capacity?

As we upgrade our port services and volumes increase, we are focused on supporting cargo owners with warehousing and cold storage facilities. Expanding our overall capacity will lead to an increase of product being shipped through Port Chalmers and will improve efficiency as on-wharf packing of product has the lowest supply chain cost.

What is involved in the construction and what will it cost?

Port Chalmers: warehouse construction is relatively straightforward with open span roof trusses and tilt-up concrete panels for external walls. There will be improvements to fire protection measures with sprinklers retrofitted and a firefighting water storage tank installed. Expected cost will be approximately $8 million, which also includes the construction of a new office and amenities building, a re-allocation of yard space and a reconfiguration of the entrance to the area.

Sawyers Bay: Design work on the new warehouse is well advanced and while the exact configuration of the warehouse is yet to be finalised, it will allow flexibility for any tenant. Expected cost will be approximately $3 million.

What is the expected timeframe for this work?

Port Chalmers: This warehouse expansion was completed in December 2015.

Sawyer’s Bay: This warehouse was completed in March 2016.

Will there be additional staff required?

Yes. The increase in product stored has resulted in the employment of eight additional staff as well as the purchase of new equipment, including forklifts, to keep up with the demands of the export season.

New tug and barge

The port is investigating the acquisition of new boats, why?

A new tug and split hopper barge are acquired to cater for operational requirements and to assist with the dredging process. It is intended that the barge (a 750m3 hopper) would be loaded directly from New Era and used to dispose material at the disposal site. This would allow the New Era to be used more efficiently for dredging significantly lowering costs and shortening the duration of the dredging works. The tug could be used for vessel operations in Dunedin and also provide back up for the tugs based in Port Chalmers.  These boats will complement the fleet and provide a flexible asset which would help service ongoing maintenance dredging and marine tasks for the next two decades.

What is the capital cost of the tug and split hopper barge?

The purchase of these two boats has cost $7 million.

Building a Sustainable Primary Deep-water Port