Case Study

Clifford Bay Investigation Programme

The Government wanted to further test the viability of a ferry terminal at Clifford Bay in Marlborough, Transport Minister Gerry Brownlee announced.

“Cabinet believes the business case we’ve been presented is strong enough to justify further testing the viability of this major change to New Zealand’s transport infrastructure,” Mr Brownlee says.

“I have asked the Ministry of Transport, along with the Treasury and the NZ Transport Agency to assemble a specialist project team to undertake this work.”

“This group of officials and private sector experts will continue working through the complexities that are part and parcel of the business case and report back to the Government by the end of April next year.”

The Ministry of Transport, selected Azimuth Consulting as a recognised private sector consulting firm to take the Commercial Lead on this initiative. Andrew Robertson, a Senior Azimuth Consultant was the Commercial Director for this initiative.

Clifford Bay is a Marlborough ferry terminal concept that could become the southern end of the Cook Strait crossing – saving operators, major freight users and passengers time and money. It presented the opportunity for a nationally significant improvement in freight supply chain performance through an improved north/south link for nationally strategic road and rail networks. These time savings would create improved productivity and capital utilisation for operators and major freight users, and as a facility Clifford Bay provides improved future headroom for new freight volume and vessels.

The project had an estimated capital cost of $422m, and was based on functional specifications provided by the two existing ferry operators – InterIslander and Strait Shipping. It would provide a two-operator competitively neutral facility designed to serve anticipated freight volume for 50+ years.

Azimuth Consulting provided commercial leadership on the assessment of commercial viability through direct engagement with operators and major users to determine how they commercially benefit from Clifford Bay, and through negotiation, what revenue they would be prepared to pay for the rights to access Clifford Bay if it was built.

Through this process, and an understanding of the drivers and risk/reward outlooks of potential constructor/owner/operators, a revenue strategy and business case was constructed to advise the government of the likely nature and viability of Clifford Bay as a PPP, in tandem with a review of the project using accepted economic methodologies for public transport infrastructure.

Alongside this, a number of risk and assurance workstreams were developed to build confidence that construction and operation of the facility wass possible within the cost and risk thresholds that have been established, and to define important next steps required to gain project approvals mand access to the land required for development.

In taking on this role Azimuth was required to identify the capability requirements of the brief and build a small team inside MoT to deliver on it. As part of the routine reporting and advisory aspect of the role, regular face-to-face contact with the Minister of Transport and his political advisors was required, as was engagement to inform and stabilise key regional stakeholders in Marlborough.