MIL OSI – Source: Far North District Council – Release/Statement
Headline: Community feedback sought on industrial park proposal
The creation of an industrial park near Kaikohe, that could take advantage of the Ngawha geothermal plant expansion, and low-cost electricity and heat, is being investigated by the Far North District Council.
The Council is considering investing an extra $6 million in its commercial subsidiary Far North Holdings Ltd (FNHL) to allow it to buy a site and develop the industrial park near the Ngawha plant.
The Council is seeking community feedback on the proposal which will increase its investment in FNHL to $19 million if it goes ahead. The Council will fund the investment by increasing its current perpetual loan, where only the interest costs have to be paid. FNHL will cover the interest cost. This will reduce the risk to ratepayers and mean rates are unlikely to be affected by the loan if the Council goes ahead with the investment. The investment proposal will also increase FNHL’s equity so it can lever this to further invest in projects elsewhere throughout the District, thereby returning higher dividends to Council, helping to keep rates down.
Deputy Mayor Tania McInnes says the opportunity offers real potential and could be a game-changer for the Far North. The vision for the industrial park is for energy-intensive businesses and industries, and those that could benefit from by-products such as heat, to take advantage of low energy prices by clustering together next to the expanding Ngawha geothermal power plant. The exact price of energy would be negotiated with Top Energy.
“There are a wide range of industries that would benefit from the development, including sawmills, dairy factories, data processing sites and warehousing.
“The project also aligns with the district’s vision He Whenua Rangatira (A District of Sustainable Prosperity and Well-being), our community outcomes and regional economic strategies and plans.”
To date, no private investors have been secured for this project. However, the Council and FNHL believe businesses can be encouraged to locate to the industrial park given the right commercial environment.
“Investors generally require some certainty before moving to a new development such as this. The site would be developed to be more attractive with appropriate resource and building consents being secured, followed by formal marketing.”
If the industrial park were not to go ahead, FNHL could sell the site to recover the cost of purchasing the site. Council approval would be required for any such transaction over the next 10 years, to enable it to protect its investment.
The Council is seeking community feedback on the proposal from 15 January to 16 February. It will consider community feedback, legal and tax advice, and due diligence outcomes before making a decision in March.
If the Council decides to go ahead with the proposed investment, FNHL will buy the site by the end of March. FNHL expects to complete design, market testing and consenting of the industrial park in two to three years.
More information is available at www.fndc.govt.nz/fnhl2018 or at any Council service centre.