BOARD OF INQUIRY NEW ZEALAND KING SALMON PROPOSAL IN THE MATTER of the Resource Management Act 1991 AND IN THE MATTER of a Board of Inquiry appointed under section 149J of the Act to consider plan change requests and resource consent applications made by The New Zealand King Salmon Company Limited STATEMENT OF EVIDENCE OF CHRISTOPHER THOMAS DAVIS FOR KIWIRAIL LIMITED (INTERISLANDER) Simpson Grierson Barristers &Solicitors J G A Winchester / H P Harwood Telephone: +64-4-499 4599 Facsimile: +64-64-4-472 6986 Email: [email protected] DX SX11174 P O Box 2402 Wellington 22563804_1.docx Page 1 INTRODUCTION Qualifications and experience 1. My name is Christopher Thomas Davis. I have a Bachelor of Commerce degree from Victoria University. I am a member of the New Zealand Institute of Charkered Accountants, the Institute of Directors and a fellow of the Chartered Institute of Logistics and Transport. 2. I am currently employed as the General Manager for Interislander, based in Wellington, and held that position from 1998 to 2004 and again since April 2009, having also held senior management roles within KiwiRail. Prior to that, I worked for Tranz Rail. I am also a Director of KiwiRail Limited. 3. My principal role is to direct and manage the Interislander business unit within KiwiRail. I am responsible for the profitability and long-term viability of the division. I am also responsible for strategic planning, operational management and leadership within the division and participating as a member of the KiwiRail executive management team. 4. Interislander is an operating division of KiwiRail Limited which is wholly owned by the New Zealand Railways Corporation. Code of Conduct 5. I am giving evidence based on my experience and position. I accept, however, that because I am employed by KiwiRail, my evidence may not be considered entirely impartial or independent. 6. Subject to that point, I have otherwise complied with the Expert Witness Code of Conduct set out in the Environment Court of New Zealand Practice Note 2011. Contents 7, Interislander's submission and position [12] 8. Scope of evidence [15] 9. Interislander Ferry Services [16] (a) Background [16] 22563804_1.docx Page 2 (b) Interislander's operating parameters and efficiency [25] 10. NZ King Salmon Proposal [32] 11. Summary [41 Interislander's submission and position 12. Interislander's underlying position on NZ King Salmon's proposal to develop new salmon farms in the Marlborough Sounds remains as set out in its submission -that is to say our overall position is neutral, although we are supportive of sustainable economic development in the Marlborough Sounds,. 13. Interislander considers that NZ King Salmon has satisfactorily addressed all relevant the navigation issues that might arise in relation to Interislander's operation and for this reason had not initially sought to be heard at the hearing. '14. Given however we now understand that other parties may be making contrary submissions on navigational safety we have asked to make verbal submissions. This is to ensure the Board is aware of the potential reverse sensitivity effects that would arise if speed restrictions were considered necessary to address any perceived navigational issues. Scope of evidence 15. In this brief of evidence, I will discuss: (a) Interislander's operation, its economic value and role in New Zealand's freight transport system; and (b) the impact of any additional speed restrictions on Interislander's operation due to perceived navigation issues that might arise from NZ King Salmon's proposed salmon farms being located close to the National Transportation Route in the Marlborough Sounds. 22563804_1.docx Page 3 INTERISLANDER FE12RY SERVICES Background 16. Ferry services between the North Island and the South Island are of national importance. This was recognised by Judge Treadweli in Marlborough District Council v New Zealand Rail Ltd[1995] NZRMA 357, 17. It is plain that connecting freight and passengers between the North Island and the South Island in an efficient manner is fundamental to New Zealand's economy. Also, ferries play an important role in New Zealand's national resilience in the event of natural disasters. By way of example I note the key role Interislander's ferries played in transporting people and goods across Cook Strait in the aftermath of the Canterbury earthquake. 18. Interislander is the principal Cook Strait ferry business and has been a responsible user of Picton and the Marlborough Sounds since 1962. We currently operate three Roll on Roll off ferries; the Kaitaki vehicle and passenger ferry with a maximum capacity of 1,650 passengers, the Arahura rail, vehicle and passenger ferry with a maximum. passenger capacity of 550, and the Aratere rail, vehicle and passenger ferry with a maximum capacity of 650 passengers. 19. Interislander is a major local employer, a vital link in State Highway 1 and New Zealand's national rail network that contributes significant business and financial benefit to the Marlborough region. Four out of five of Cook Strait passengers (some 800,000+ approx. per annum), sail with Interislander and almost one third of those are international visitors. 20. We operate up to 16 sailings per day (8 in each direction), including night time freight sailings with very few passengers. 21. The volume of freight carried in both directions between Wellington and Picton by the Interislander is (approximately) 1.3 million tonnes of rail and 1.8 million tonnes of commercial vehicles per annum. 22563804_1.docx Page 4 22. The total volume is roughly equivalent to the total tonnage through the Port of Napier in 2010-11,~ or, twice the amount of tonnage exported to Australia and the Pacific Islands from the Port of Tauranga.2 23. Interislander needs to maintain its service frequency and capacity, and, if possible, improve its performance to meet the predicted future demand for freight. New Zealand's national freight volume is growing and by 2040 it is predicted to double. This is consistent with the freight growth seen in the last twenty years. I am witnessing this trend though the increase in demand for Interislander's services. 24. All national freight movements occur within a plethora of legislative and operational constraints which restrict the parameters for on-time deliveries. New Zealand's freight logistics chain is sensitively tuned and Interislander's capacity plays a critical role in the national freight network. The time it takes to cross the Cook Strait is a key factor in providing a reliable and timely freight service within the New Zealand's freight logistics chain. This ensures efficient utilisation of ships, rail equipment and trucks minimising idle time at origin, destination, ferry terminals and en-route. Interislander's operating parameters and efficiency 25. Interislander's operating parameters are tight. Any increase in crossing time cannot be recovered in the port turnaround or elsewhere. The timetabling of the ferry service is based on reasonable weather conditions in Cook Strait, and comprise of crossing and turnaround time. 26. Each crossing takes 3 hours and 10 minutes. Combined with the 50 minute turnaround time, this is a four hour cycle time. We are able to achieve 6 sailings per vessel in each 24 hour period. Adding 5 or 10 minutes to each of the ferry crossing times is an additional 30 or 60 minutes a day, this would reduce the number of sailings per vessel from 6 to 4 per day. A significant reduction in capacity and productivity. This would have a significant effect on domestic transport, and would increase the unit cost of freight. I consider this could have flow on effects for New Zealand's productivity. ~ Port of Napier Annual Report 2011, page 7. z Port of Tauranga web site: Port Trade and Statistics Information, August 2011 (S:\Port Information\Port Trade and Statistic Information) 22563804_1.docx Page 5 27. The vessels currently turnaround in 50 minutes, both in Picton and Wellington. Within that 50 minute window, three commodities are exchanged: passengers (foot and car), rail freight and commercial vehicles. Such a short turnaround is the result of some 50 years in the business, and is considered by other ferry operators world-wide as being outstanding. 28. Although our operating parameters are tight, safety is a paramount concern for Interislander and we have strict safety policies. We would never allow our ferries to operate in an unsafe manner. 29. Interislander understands that it operates in an environmentally sensitive location and recognises its responsibilities as a good corporate citizen. Given the location and nature of our operation, we are particularly reliant on resource consents and regional plan provisions governed by the Resource Management Act 1991. 30. Interislander has invested both time and significant funds, over a long period of time, to ensure that it has reasonable operating conditions in the Marlborough Sounds. This includes a resource consent for the Kaitaki (in 2007) and a Certificate of Compliance for the lengthened Aratere (in 2010). 31. Due to the tight parameters, I consider it necessary for Interislander's continuing viability to maintain the current operating conditions. I would be very concerned if there were potential for these operating conditions to be changed as a result of NZ King Salmon's proposal to locate three salmon farms close to the National Transport Route. NZ !(ING SALMON PROPOSAL 32. Interislander's concern relates to the potential navigational issues that might be thought to arise from the location of three of the proposed salmon farm sites of Ruaomoko, Kaitapeha (both opposite Dieffenbach Point) and Ngamahau, which are in or close to the National Transport Route in Tory Channel (proposed Tory Channel farms). 22563804 1.docx Page 6 33. The locations of the remaining proposed salmon farms (as set out in NZ King Salmon's application) are not on the route of Interislander's ferry operations and I have no concern about them.