Lack of money may stop container project

Press, Volume CXVI, Issue 34123, 8 April 1976, Page 18

Lack of money may stop container project

Lyttelton’s container terminal project might 'come to a standstill within five weeks because of a lack of finance.

Monej’ would run out by the middle of May: and there was no indication so far of any more becoming available, said the board’s chairman (Mr J. Brand) yesterday

The board is having to reassess its estimates of the total cost of containerisation. The final figure could be about slom as against the $7.9m for which the board originally got loan approval. The board’s financial problems have been caused partly by the Government’s freeze on local-body loans, and partly by the poor response by private investors to the container loan.

Public support has become almost non-existent, largely because of the unattractive interest rates. Mr Brand said that the Government had promised to keep the matter under review but so far had made no indication that it would give the board financial support. Lyttelton’s plight was brought into the open yesterday after the board’s finance committee received a letter from the underwriters

declining to support the latest instalment of the container loan unless the board had already committed itself to spending the m.oney. The latest instalment, issued on April 1, was for $400,000. The board replied that the money was committed. The letter was reported to have said that both the Auckland and Dunedin harbour boards were considering raising overseas loans because of financial difficulties with their container loans.

Lyttelton was asked if it would be interested in taking part in the venture. The board has yet to investigate the proposition, but is likely to turn to overseas loans only as a last resort.

Though World Bank loans are attractive — 25-year terms at 5.5 per cent interest — fluctuations in international currency rates can substantially alter the amount the borrower eventually has to repay.