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Port decision shock for Greymouth

Nov 28, 2007 11:45 AM

A multi million dollar revamp of Greymouth's port has been scuttled after a decision was made to send millions of dollars of coal to Lyttelton instead.

After two years of planning, Pike River Coal has abandoned its plans to revamp the Port of Greymouth, instead opting for Solid Energy's proposal to send more coal by rail to Lyttelton.

Pike River was going to start exporting the coal via Greymouth next year but now the deal is off after the company got a better deal.

The port's revamp would have cost $18 million and Greymouth Mayor Tony Kokshoorn says the decision is "quite gut wrenching".

The re-development depended on the new Pike River mine exporting its coal through Greymouth but now it will go by rail to Lyttelton.

"The port now has no trade at all. We really hung everything off this deal over the last two years," Kokshoorn says.

However, he says the council will look at new opportunities to attract a port into the area.

The amount of coal Solid Energy exports at Lyttelton is set to double with the deal but chief executive Peter Davie is confident Lyttelton Port has the ability to cater for the increased volume.

Pike River Coal is due to come on line next year and says it started looking at other transport options when there were problems finalising the deal with Greymouth.

Spokesman Gordon Ward says they needed to ensure they had a solution for coal transport in advance of that.

"We gave them a fairly healthy period of time to lock down the remaining issues and unfortunately they weren't able to do it."

Don Elder from Solid Energy says Pike River ran out of time and options and were at risk so they decided to go with Solid Energy.

Toll and Solid Energy also undercut the price and Greymouth locals are not impressed, fearing the decision could "suck the life out of the coast".

The local council spent over a million dollars trying to get the  deal sorted and thought it was sound.

"It's a huge blow to us and very anti-competitive from Solid Energy. We are very disappointed," Kokshoorn says.

But Solid Energy says rail is the better option.

"It's not about us trying to out-compete somebody else. This has always been the best solution for Pike River and for all other exports from the coast," Elder says.

The only consolation for Greymouth is that there will be no more coal trucks rolling through town.