A Holcim Cement plant on the West Coast. Photo: RNZ / Tracy Neal
A multinational cement company says local seafaring jobs will suffer if it cannot transport its product around New Zealand on a foreign-flagged ship.
Holcim said it had entered a time charter with Swiss-based NovaAlgoma Cement Carriers (NACC), which had agreed to provide a temporary ship for three years while Holcim built a replacement for its ageing vessel.
But on Wednesday, Associate Transport Minister James Meager declined NACC's application for authorisation to operate a coastal shipping service in New Zealand waters.
"The minister's decision has chosen road transport over coastal shipping," Holcim said in a statement.
"This prevents a temporary coastal shipping solution while Holcim sought a purpose-built vessel as a replacement for the inefficient and costly 27-year-old MV Buffalo."
Meager told RNZ Holcim's bid did not meet maritime law requirements.
Associate Transport Minister James Meager. Photo: RNZ / Samuel Rillstone
Coastal cargo can generally only be carried by a New Zealand ship unless authorisation to carry coastal cargo under section 198(2) of the Maritime Transport Act is given.
Meager said while foreign ships could carry coastal cargo in certain situations, he did not believe Holcim's application met the intent of the law, aimed at protecting New Zealand coastal shipping for local commercial interests.
"Generally, those authorisations are very short, if not one-off cargo movements to fill a gap or where a vessel is not immediately available. After careful consideration, we made the decision that the application did not meet that threshold.
"I appreciate that there has been a high degree of interest in the outcome of the application. The public should have confidence that all authorisations to carry coastal cargo align with the intent of section 198 of the Act, and that has been my priority throughout this process."
Holcim said that with the NACC unable to commit to a locally flagged vessel for the short-term charter, and no other local vessels capable of meeting the supply of cement required to keep up with demand, it had no choice but to spend millions of dollars pivoting to road transport.
"This is an undesirable, but now necessary, decision. We have to ensure the continuation of cement supply to our customers across both the North and South Islands. Approximately 15,000 additional tonnes of bulk cement must now be hauled in over 500 trucks on roads every month.
"Creating a much larger road transport supply chain will cost Holcim millions of dollars. There will come a point where the significant investment in the road network will make a return to coastal shipping unviable.
"The Minister has blocked our credible alternative, so to claim his decision protects local shipping capacity is incorrect. It reduces it. We have viable solutions, including the continued use of coastal shipping, and had hoped the Minister would be open to discussing them, but he would not meet with us."
Meager said Holcim could work with the Transport Ministry to find a solution for transporting cement around the country.
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