Timaru District Council is expected to ratify a plan change today allowing the Port of Tauranga Ltd to buy a half share of the Timaru Port in a $21.6million deal.

Port of Tauranga is buying a 50 per cent stake in PrimePort, excluding its investment properties, and will lease PrimePort's container terminal for up to 35 years.

The Port of Tauranga will be looking to buy a half share of the Timaru Port.

It will also acquire the container terminal operating assets and create a new subsidiary - Timaru Container terminal - to operate the terminal.

Timaru District Council is the port's major shareholder, owning PrimePort through a holding company Timaru District Council Holdings Ltd.

The council went through a consultation process hearing last week that PrimePort chief executive Jeremy Boys says was strongly in favour of the alliance with 44 submissions - 41 positive and three opposed.

'So the vote was unanimous that the process should go ahead,” says Jeremy.

'What's happening today the council is having a meeting so that they will affirm the change in the long term plan. TDHL is a wholly owned entity of the Timaru District Council. This process is part of the council itself.”

The meeting expected to ratify the decision is being held at 3pm today.

The shareholding in PrimePort Timaru is 71 per cent Timaru DHL and 29 per cent by private investors. The company has six directors, four South Islanders and one each from Wellington and Auckland.

PrimePort suffered a big loss in container traffic last year when shipping lines Maersk and Hamburg Sud stopped visiting the port, while Fonterra Cooperative Group's Clandeboye plant, the world's second-largest dairy processing site, decided to rail its product to Port of Lyttelton even though it is closer to Timaru.

As a result containers handled by PrimePort dropped to 20,000 from more than 80,000. The port cut 50 jobs last year.

The spare container capacity means the Port of Tauranga's first steps will be talking with customers and shippers to bring the cargo flows back up, says Port of Tauranga CEO Mark Cairns today.

'There's plenty of capacity within the existing infrastructure so our first target will be to build that, to utilise the existing capacity. If it is successful that's when we will put more investment into it if it needs it.

'We've got to try and grow that container traffic across the quay again down there.”

Port of Tauranga former commercial manager Graeme Marshall will be in South Canterbury a few days a week, knocking on doors.

Shipping lines MSC and Swire call at both Timaru and Tauranga, where cargo can be transferred to other services also calling at the Port of Tauranga

Timaru District Mayor, Janie Annear, says the council's earlier unanimous decision to approve the alliance will be ratified at 3pm.

'I will be very surprised if there's even any discussion,” says Janie.

The double decision is required because Audit NZ had to review the decision.

'Because we had to change the wording in our long term plan, Audit had to check just to make sure our resolution was totally correct.

'As a community we are really, really excited about it. We think it's going to be an excellent relationship that is going to benefit both parties – and I think it will be a new era in freight.”