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Do Shareholders Realise Marsden Point Conversion Could Cost More Than Half A Billion Dollars?

FIRST Union, the union representing workers at Refining NZ, are querying whether shareholders voting on Friday on whether to convert the Marsden Point refinery to an import-only terminal realise the conversion could cost $650-700 million dollars.

"Refining NZ’s investor documents place the costs of conversion at around $320-340 million over five years, but we estimate those costs could ultimately be much higher and are concerned that shareholders may be being misled," said Jared Abbott, FIRST Union Secretary for Transport, Logistics and Manufacturing.

"A 2016 NZIER report noted that the costs of remediation alone were in the order of $300 million, while we estimate the costs of paying out redundancies could come to around $50 million."

"The long-term cost of a $700 million loan could put a dent in any potential dividends for years to come."

Mr Abbott said there is little public information about the level of site contamination, and wonders whether shareholders have been provided with any information in this regard. The site has been subject to a self-monitoring regime for decades.

"Shuttered refineries in Australia have left high levels of contamination and a major demand for rehabilitation works, as well as having a massive impact on local communities," said Mr Abbott.

"It’s vital that remedial work is costed correctly so that shareholders are aware of the magnitude of risk they will be taking on."

Mr Abbott says a large number of refinery workers are already leaving their posts in frustration at what is perceived as a rushed process, and if the refinery remained understaffed during the transition and wind-down, it could risk a hard shutdown of the plant.

"A hard shutdown of the plant due to a loss of expertise could have significant implications for New Zealand’s fuel supply on top of everything else," said Mr Abbott.

"Shareholders would be advised to err on the side of caution before irreparably impacting NZ’s long-term fuel security."

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