Answers needed on KiwiRail – Fonterra deal

Cartoon courtesy of the Shipping Gazette

Cartoon courtesy of the Shipping Gazette

The Maritime Union has stepped up its demand for answers as fallout continues from Fonterra’s dumping of regional ports in favour of long distance rail – and the influence that state subsidies to KiwiRail may have had on any deal.

KiwiRail has waded into the growing debate over the fate of regional ports, as the implications of Fonterra’s withdrawal from ports in New Plymouth and Timaru becomes apparent.

KiwiRail chief executive Jim Quinn was reported in the Taranaki Daily News (29 August 2009) saying any Government subsidy was irrelevant to the Fonterra deal but that KiwiRail did need the subsidy.

Maritime Union General Secretary Trevor Hanson says that the situation has obviously blown up in Fonterra’s face and it needed to be held to account.

He was not satisfied with KiwiRail’s answers and said “either they are being subsidized or not, and we believe there is more to this situation than regional communities are being told.”

Now the Maritime Union for public meetings to begin “active resistance” to the actions of Fonterra.

Mr Hanson says there should be immediate public meetings organized to bring together those affected by the decisions – ports, local councils, farmers, maritime workers, local businesses and all affected citizens, to demand some input into such decisions.

He says locals need to fight back against the destruction of these ports, and ultimately the damage to their regional communities.

The Union is also demanding answers from the Government as to how taxpayer funding of KiwiRail is being allowed to threaten the future of regional ports.

“The Government has the end responsibility here to step in for the national interest. To stand aside and let these heartland communities have their infrastructure and transport systems effectively demolished by a five hundred pound gorilla called Fonterra is showing that it either has no idea or the wrong idea.”

Mr Hanson says the both of these ports are capable of handling their local cargoes – without subsidies.

He says the money these ports have invested in infrastructure to handle Fonterra’s trade has effectively been flushed down the drain.

“The question needs to be answered – is the Government aware of any influence of subsidies on the price of the movement of cargo on rail hundreds of kilometres away from its regional catchment?”

“Both ports need to ask the Government to put Fonterra’s activities on hold until a true cost of their decision has been investigated.”

Mr Hanson says for some time there has been strong advocacy for the use of coastal vessels to move cargo out of the secondary regional “feeder” ports to major exporting “hub” ports.

He says this strategy has now been “blown out the water” without explanation or discussion in the industry.

Mr Hanson says Fonterra shipper Maersk needs to state its position as one of the largest shipping operators in the world.

“Maersk has described itself as a socially responsible company and will be very aware of the damage caused to regions and communities from Fonterra’s actions.”

“We have to wonder if Fonterra has other shipping options under study, and what effect this could have.”

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