Clifford Bay investigation

In September 2011 the Minister of Transport announced that the option of using Clifford Bay in Marlborough as base for ferry terminal operations will be further investigated. The further investigation follows an independent report that found that there is a financial and economic case for progressing Clifford Bay.

However, there is potential for cost variations that may undermine the economic and financial cases for the development. Before any final decisions about Clifford Bay are made, a detailed evaluation and a full business case are needed.

The Ministry of Transport-led investigation is looking at Clifford Bay from a national, transport network perspective. The objective of the investigation is to provide the government with a report that enables them to have an informed opinion on the viability of a ferry terminal at Clifford Bay.

In January 2012 the Ministry of Transport appointed Covec to undertake an independent analysis of the economic impacts on the Marlborough region. Covec has spoken to key stakeholders and representative business groups in Marlborough. Local businesses also have the opportunity to contribute to the investigation via an online survey.

The Ministry has appointed Deloitte to develop the detailed business case for the Clifford Bay further investigation. Deloitte will be completing a full analysis of the financial, economic, operational, and commercial viability of the option of using Clifford Bay as a ferry terminal.

The NZ Transport Agency is assisting the Ministry by investigating the likely construction and engineering costs.

The Ministry is nearing completion of its investigation into the viability of developing a ferry terminal at Clifford Bay and we are considering the advice we will provide the Minister.

Questions and Answers

What happened with the Clifford Bay investigation in 2011?

In May the Ministry of Transport commissioned Deloitte to conduct an independent high level evaluation of the economic, environmental and social benefits and costs of using Clifford Bay as base for ferry terminal operations.

The Deloitte report was given to the Ministry of Transport in July. The Ministry forwarded the report and its own initial analysis to the Minister of Transport for consideration by him and his colleagues.

In September the Minister of Transport announced that the option of using Clifford Bay in Marlborough as base for ferry terminal operations would be further investigated.

Why was the independent evaluation conducted?

The two inter-island terminals (currently in Wellington and Picton) provide crucial connectivity between New Zealand’s two main islands for both road and rail passengers and freight.

Improvement in the connection between the North and South Islands could significantly boost productivity in rail and road movements between the islands.

By 2040 New Zealand’s freight volume is predicted to double. All New Zealand’s transport modes need to be fully geared to handle the increased freight load. On paper, the Clifford Bay location for a terminal offers substantial efficiencies for road and rail freight.

What did the independent evaluation of Clifford Bay find?

The independent analysis found that there is a financial and economic case for further investigating Clifford Bay as a base for ferry terminal operations. This finding justified further detailed work that is being led by the Ministry of Transport.

What does the further investigation involve?

The Ministry of Transport is leading a process with the Treasury and the New Zealand Transport Agency to carry out the required further analysis of a ferry terminal at Clifford Bay. Key stakeholders are involved in this process.

There will be further analysis to address areas of risk identified in the Deloitte investigation to prepare a detailed business case for Clifford Bay. This analysis would seek to confirm the economic, financial and engineering viability of Clifford Bay and is required regardless of which development options, if any, may be considered to progress a ferry terminal at Clifford Bay. The evaluation will look at Clifford Bay from a national, transport network perspective.

The business case will consider the potential impact on the government’s broader goals for economic growth, productivity and value for money.

What happens once the further investigation is complete?

The Ministry will brief the Minister of Transport once the investigation is complete. It is expected that the Minister will make an announcement following consideration of the investigation’s findings.