The pair periodically contest for preferred South Island port title as major shipping lines constantly review schedules and soon will replace the present 4100 container Albatross class ships with 6000 TEU (20ft equivalents), then 8000 container carriers.
Dredging costs will run into tens of millions of dollars for the ports, of which Port Otago is 100% owned by the Otago Regional Council and LPC by the Christchurch City Council.
LPC has indicated it wants to increase channel depth from 12.4m at high tide to 14.5m while Port Otago is working on increasing depths from 12.8m to 14m-15m at low tide - dredging up to four million cubic metres of sand.
In August last year, Port Otago announced it wanted to establish itself as the only deep water South Island port and has a project team working toward the resource consent application stage, while Lyttelton yesterday said as the South Island's ‘‘premier'' port it would begin consultation with affected parties and seek consent for dredging in a few months.
‘‘Lyttelton Port of Christchurch wants to safeguard Lyttelton's position as the South Island's premier port,'' LPC chief executive Peter Davie said in a statement.
Several LPC customers call only at Lyttelton and dredging was the key to developing and expanding port facilities for both clients and shipping companies, he said.
‘‘It is therefore vital to keep Lyttelton at the forefront of the port industry and deepening the navigation channel is a key step in this ongoing process,'' Mr Davie said.
Similarly, last year Port Otago said its proposed dredging programme would lay the foundation for the next 30 to 50 years, with the expectation 6000 TEU vessels would start calling within three to four years.
At present, Port Otago is considered the preferred South Island port because Maersk, the world's largest container shipping company, chose Port Chalmers over Lyttelton as its South Island port in December 2005.
Based on the 14.5m depth each company is targeting, both could theoretically host 6000 and 8000 TEU ships.
However, Lyttelton is proposing a 14.5m depth at high tide and Port Chalmers 14.5m at low tide, meaning the latter would have much longer period in which ships could arrive and depart - crucial for the quick turnaround of ships whose charter fees have risen two to threefold in recent years.
Yesterday, Port Otago chief executive Geoff Plunket set aside the suggestion LPC's dredging proposal was a direct challenge to Port Otago for southern supremacy.
‘‘Port Otago is trying to make the right decision for itself, and the Otago region, to ensure we have the capacity for the cargo volumes expected from the region,'' he said.
The project group was still working on both the science, of deepening and widening the channel, and the consultation process with stakeholders, including an independently chaired consultation group.
Other than ‘‘likely'' applying for resource consent late in the year, he set aside any timetable for dredging saying ‘‘getting the science and consultation right'' took priority over attempting to adhere to any timetable.
Mr Plunket said ‘‘indicative'' dredging costs were around $20 million to $30 million and a decision, based on economic guidelines, was yet to be made on whether the channel would be dredged to accommodate solely the 6000 TEUs or 8000s as well - noting it was relatively minimal work to dredge and shape for the 8000s.
While Lyttelton's 2007 container turnover of 228,000 TEUs outweighs Port Otago's annual 171,000 TEUs, Lyttelton is considered the import port while Port Chalmers is the export hub - based mainly on meat and dairy exporters.
However, the port sector has been holding its breath for the past two years with calls for rationalisation within the country's nine ports as the bigger container ships will mean fewer calls in the future, threatening the viability of struggling small ports.
Both Port Otago and Lyttelton have been circumspect on their respective dredging costs, with Port Otago indicating up to $30 million and LPC saying the costs could be $20 million per metre in depth excavated.
Port Otago has spent more than $70 million upgrading its infrastructure during the past eight years, but Lyttelton is seen as poor cousin, well behind on maintenance and upgrade programmes which could become its Achilles heel.
In April 2005, Port Otago acquired a 15% stake in LPC, worth almost $40 million, effectively blocking Christchurch City Council-owned City Holdings' controversial bid for a 90% takeover, which sidelined its stated intention of on-selling the port to an international shipping company - a concept that caused a furore in Christchurch at the time.
Port Otago's dredging plan would also include widening the channel near Harington Point on the Peninsula and consultation meetings have already been held with some residents.
Sand from dredging could be dumped at sea, or used in a commercial operation, such as replacing sand lost at the city's Middle Beach, between St Clair and St Kilda.
