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Compliance Costs Concern Port Company

Contributor:
Fuseworks Media
Fuseworks Media
Compliance Costs Concern Port Company

Port Nelson Limited today announced a dividend of $4m to its shareholders, the Tasman District and Nelson City Councils.

However, chairman, Nick Patterson, said the after tax profit would have been higher, but for the steep compliance costs the port faces in dealing with the effects of noise on port hills' residents.

The terms of a Noise Variation set by the Environment Court require the port to meet the costs of full or partial noise insulation treatment for homes near the port, and to buy the most affected homes if the owners decline mitigation treatment. This cost $1.4m over the past year and reduced the operating surplus to $4.9m after tax. Mr Patterson said the Noise Variation would continue to affect the port's bottom line.

"Ongoing expenses we will have in relation to noise mitigation work in the coming years will continue to impact on our result and the return to our shareholders," he said. "While we fully understand our obligations in this area and are committed to meeting them, the increased compliance costs that organisations such as ours have to meet are a major concern."

The total cargo for the year was 2.755 million tonnes, boosted by log exports to China and increased imports of fuel and empty containers. Conversely, vehicle imports were well down on budgeted figures.

The trend towards containerisation of processed wood products continued and saw the port exceed 80,000 Twenty-foot Equivalent container Units (TEU) for the first time. A total of 82,351 TEU were handled versus a budgeted 78,000 TEU and an increase on the 2007/08 figure of 77,842 TEU.

Mr Patterson said the global recession had seen a reduction in vessels carrying motor vehicles and steel, and he said while there had been limited changes to the liner shipping services using the port over the last 12 months, this may change.

"It is likely Port Nelson and most other ports will continue to see decisions made by both shipping lines and major exporters that will have an effect on shipping services around the New Zealand coast," he said. "While such changes are inevitable, they do mean we are operating in a very tight market and they make further investment in infrastructure a very uncertain science."

Mr Patterson thanked his fellow directors, port customers and staff for their support throughout the year.

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