The Ports of Auckland says the Auckland Council can expect a reduced dividend over the next two to three years as it pushes ahead with a major investment programme.
Auckland Council currently has 100% ownership of the port and it received an annual dividend from its shareholding of $51.1 million in the 2017/18 financial year.
But the port company has increased its debt by 30% since last year as part of an investment programme to increase its capacity and returns, despite the fact its long-term future hangs in the balance.
“We expect a reduced dividend stream [to Auckland Council] for the next two to three years, followed by an increased return in years after that as we get benefit from current investments,” Ports of Auckland spokesman Matt Ball says.
He says the investment programme includes container terminal automation, construction of a new car handling facility and investment in its new Waikato Freight Hub.
“This investment has resulted in an increase in debt from $368.0 million to $479.7 million.”
The council report says this has been accompanied by a fall in container volumes due to “reduced terminal capacity during the automation works and the loss of a major contract”. While there has also been a drop in the number of cars being processed by the port due to lower car sales and the impact of new biosecurity measures.
It says such factors are likely to have an adverse impact on the Ports of Auckland’s net profit after tax for 2018/2019. But it says the capital investment by the Ports of Auckland will lead to added capacity and the outlook is projected to improve in 2021/22.
Ball says the report is an accurate reflection of where things are at for the Ports of Auckland.
The company unveiled its new Waikato Freight Hub last month. Ball says he can’t divulge the exact cost of the project for commercial reasons.
But he says the project has so far included the purchase of the 33 hectare site in 2016 and the completion of the first customer facility which has now been completed, as well as a new bridge for road access which is expected to be completed this year. He says there are also plans to construct rail sidings and additional customer facilities as required.
When asked about the port’s future in Auckland he refers to the company’s 30 year Master Plan was produced in 2017 and approved by Auckland Council in May last year.
“We’re basing everything we do on that master plan until we’re told otherwise. The plan is designed to fit with the idea of the port eventually moving, but it is also intended to allow us to keep the freight moving until then.”
The latest news on the Ports of Auckland’s capital investments follows a lot of political debate over its future in the City of Sails.
Auckland Mayoral candidate John Tamihere has called for the Ports of Auckland’s business operations to be privatised to help ease the financial burden faced by the city’s ratepayers.
Under his proposal released last month the Super City would still retain ownership of the land the port sits on and the new port owners would have to lease the land back from the council at a “credible commercial rate for up to 25 years”. They would also be expected to develop an agreed exit strategy.
While NZ First MP and Minister for Infrastructure Minister Shane Jones is continuing in his quest to see the Ports of Auckland’s operation’s north to Whangarei. He says connecting Northport to rail and enabling it to service Auckland-bound freight would make a major contribution to the region’s economic development.
Last month Jones released a new report by consultants AECOM New Zealand and Deloitte on the feasibility of upgrading Northland’s rail network to allow it to happen. The business case was produced for the Ministry of Transport and paid for by the Provincial Growth Fund (PGF) and says upgrading the Northland rail network and building a new rail spur from the main line to Northport would cost $1.3 billion.
Auckland mayoral candidate John Tamihere has proposed selling Ports of Auckland to a private company but keeping its waterfront land in public hands.
In his latest policy announcement, Tamihere today said the best way to future-proof the 77ha of prime waterfront land was to split the council-owned business from the land and go to market with the business.
Under his proposal, the new port owners would lease the land from council at a commercial rate for up to 25 years to develop an agreed exit strategy.
“The Ports must move, but exactly where it moves to will be part of ongoing discussions,” he said.
“But I have to give clarity and direction so we can all plan for the next 25 years.”
Mayor Phil Goff called his rival’s policy “bizarre”, saying it is the worst possible time to sell the port business when it has no clear future, nobody knows where it is going to move to and who will pay the cost of new infrastructure and relocation.
He was referring to a ports study set up by the Government to look at how the existing ports at Auckland, Marsden Point and Tauranga could be reconfigured to provide the best options for long-term growth.
The first of three progress reports from a working group in April suggested an inland port in west Auckland and a vehicle importing and servicing centre at Northport among a dozen potential transport investments to improve freight handling in the upper North Island.
The working group plans to report back to the Government in June with options and complete more detailed costings and recommendations in September.
“Who is going to buy the company when they don’t know where its operations will be in 10, 15, 25 years? It will be selling it at a bargain basement price,”Goff said.
Tamihere said a timely managed exit would open the Waitemata Harbour’s green footprint as well as provide a much-needed cash injection to ease ratepayers’ costs.
Other advantages would be to de-risk the costly relocation of the port, give council a financial stream from the leased land (council currently gets a dividend of about $50 million a year from the port), open up 77ha of land for ratepayers to decide its future, and establish a “transition fund” to support port workers into new jobs, he said.
Speaking to media about the policy, Tamihere did not know how much the port business could sell for, but suspected Ports of Tauranga will be “in boots and all” and interest would come form as far away as Singapore.
A Future Port Study commissioned by Auckland Council in 2016 found moving Ports of Auckland to a new “super port” in the Manukau Harbour or the Firth of Thames would cost $4 billion to $5.5b.
Tamihere said he has met major stakeholders, including port executives, the Maritime Union and transport groups to brief them on the policy. No one opposed it, he said.
He also raised the prospect of congestion charges for trucks using the port between working hours of 9am to 5pm to overcome “chronic ports traffic congestion”.
He said Auckland Transport forums and the major Ports carriers agree congestion is a major problem and are identifying ways to work through a self-regulatory system. Truckies will be in some difficulty initially but they get the transition, he said.
Road Transport Forum chief executive Nick Leggett said excluding heavy trucks from Auckland city between 9am and 5pm is lacking in strategy and planning, ridiculous and would have a negative impact on all New Zealanders.
“Mr Tamihere says the operations of the Ports of Auckland should move, but he has no idea where to. So, any move is many years away. In the interim, there seems to be this bizarre proposal to exclude heavy trucks from Auckland central business district (CBD) – where Ports of Auckland operates, between 9am and 5pm. He’s not sure what that truck exclusion will include.
“Why would you increase the costs of transporting goods in and out of New Zealand’s major city? This proposal would definitely add costs to all the goods in people’s lives that are transported by trucks – which is pretty much everything,” Leggett said.
Goff also slammed the idea of congestion charges during the day for trucks, saying the busiest time for truck movements was between 10am and 2pm outside of work hours.
“The policy is just not well thought out and totally counter-productive. It is making policy on the hoof,” he said.
Tamihere, who is mounting a serious challenge to Mayor Phil Goff’s bid for a second term, has already announced he will “shake up” the way council runs, turn Eden Park into the city’s main venue for sports and major events and sack the board of Auckland Transport.
Other mayoral candidates include businessman John Palino, who is standing for a third time, Joshua Love, John Lehmann and Craig Lord.
Lord has announced a policy to keep speedway at Western Springs and scrap plans to move cricket there. He also wants to make it easier for Eden Park to hold concerts.
“The Upper North Island Supply Chain Study has focussed solely on rail and this does Northland no favours,” says Annabel Young, Executive Director of the NZ Shipping Federation, talking about the Interim Progress Report of the study group. “Their rail-centric view has blinded them to the opportunities available to Northport that are not dependent on rail.”
A dry dock in Whangarei would be a win-win for both the city and New Zealand as a whole; but in the interim report it gets a scant one-line mention. The lack of a dry dock is hurting this country due to the environmental and financial costs that have to be incurred when our coastal shipping operators are required to dry dock their vessels off-shore in Singapore or Australia. There are already cases where overseas ships are avoiding New Zealand due to the toxic combination of high biosecurity cleanliness requirements for a vessels hull and secondly, the inability to clean a ship in a dock that does not fit in the Devonport dry dock.
We note that the interim study assumes that cargo landed in Northport would need to be moved by rail which ignores the obvious possibility of movement by sea, as is done now in many other parts of the world using smaller domestic coastal ships and barges.
This first report sets up a paradigm where rail is deemed to be the only answer. The Federation believes it may be asking the wrong questions.
The New Zealand Shipping Federation began in 1906 and is the key representative body for New Zealand’s coastal ship operators.
An inland port in west Auckland and a vehicle importing and servicing centre at Northport are among a dozen potential transport investments a working group is considering to improve freight handling in the upper North Island.
The group, formed last year, has spent the past eight months talking with users and imagining how the existing ports at Auckland, Marsden Point and Tauranga – and the road and rail links between them – could be reconfigured to provide the best options for long-term growth.
It plans to report back to the government in June with options and complete more detailed costings and recommendations in September.
“There are a large number of infrastructure options that may have a part or full place to play in changes to the upper North Island supply chain which will be considered,” chair Wayne Brown says in a progress report filed with Cabinet’s Economic Development Committee earlier this month.
“For example, in evaluating one of our options that involves moving some of Ports of Auckland’s freight task to Northport, we will consider potential infrastructure that may be required to support this,” the group says.
They include: “a spur to Northport, which we understand the current government is investigating; upgrades to the existing North Auckland Line; potential short-term operational changes, such as moving freight through Auckland on the commuter network at night; potential long-term new infrastructure requirements such as a new rail line out west of Auckland to avoid congestion in the Auckland public transport rail network and connect through to the current inland freight terminals; and the potential establishment of new inland freight terminals.”
The Upper North Island Supply Chain study was the result of a pre-election pledge by NZ First to move container operation from Ports of Auckland to Northport by 2027.
While there is broad consensus that Auckland’s port will be increasingly constrained by the city’s development around it, there is no agreement as to how soon change is needed, how much freight could be redirected through Tauranga or Northport, and how that would be achieved.
As recently as 2016 a study group recommended work start assessing Manukau Harbour or the Firth of Thames as long-term replacement options for Auckland. Last August, Port of Tauranga chief executive Mark Cairns said there wasn’t yet sufficient freight volume in Northland to warrant the relocation north. Port of Tauranga owns half of Northport.
Auckland and Tauranga are the country’s two largest container ports. With Northport, they handle about half the country’s exports and two-thirds of its import volumes.
Tauranga and Auckland, controlled by Bay of Plenty Regional Council and Auckland Council respectively, compete for freight. They considered a merger in 2006 but talks collapsed the following year. Ports of Auckland has a 20 percent stake in Northland Regional Council-controlled Marsden Maritime Holdings, Tauranga’s partner in Northport.
The working group noted submitters’ views that the “interwoven” nature of the three ports’ ownership had prevented them being developed in New Zealand’s best interests and had resulted in some inefficiencies and “duplication” of resources.
“We will be considering the current ownership structure of ports and whether a change may be needed to ensure interests are aligned to deliver the best outcome for New Zealand,” the group says.
“Councils were somewhat open to a change in port ownership as long as they preserved their income and value of the port to their community.”
Ports are long-term businesses. The working group is canvassing issues in 10-, 25- and 50-year timeframes.
Scope is also important. Freight operators argue Northport, west of the Marsden Point oil refinery, could meet growth on Auckland’s North Shore, rather than replacing Ports of Auckland entirely.
Short-term options could include establishing a distribution centre at Silverdale or Orewa; imports and Northland products could be trucked there overnight – avoiding congestion on SH1 – for day-time delivery into Auckland.
Northport already plays a similar role. Structural components for some major Auckland building projects are stored there for just-in-time delivery to avoid congestion in the CBD.
Car imports have already been identified as a potential early change. Ten hectares of new space at Northport could provide storage for 10,000 cars. Auckland currently receives about 300,000 cars annually, each of which spends close to three days on its wharves.
Northport started operating in 2002 and is largely a blank canvas. Its 49-hectare footprint can be expanded to 75 ha, while its berth length can be more than doubled to 1,390 metres. The port lies next to 180 ha of commercial and industrial land controlled by shareholder Marsden Maritime.
But it has limited capital for development and no rail link. KiwiRail and the Ministry of Transport are investigating a $200 million, 20-kilometre spur line, but that is probably more than six years away even if there was a prompt decision to proceed.
The existing line from Swanson to Fonterra’s Kauri dairy plant north of Whangarei also needs upgrading at a cost of another $500 million to carry larger and heavier container traffic. KiwiRail has previously estimated the total bill – including upgrading rail capacity from South Auckland – at about $2 billion.
The working group noted its “fundamental” belief that there is “no point making further investment in Northport without investment in, and development of, the train line to Auckland.”
OPINION: The first instalment of the Government’s trio of reports on re-shaping how the Upper North Island ports work, suggests that Peter Jackson’s Lord of the Rings movie trilogy will look like a snapshot compared with what lies ahead.
A 2017 New Zealand First policy to shift the vehicle import trade from Auckland to Northport by this year, as a prelude to re-locating the city’s port, begat – thanks to co-alition politics – the more cautious “Working Group undertaking the review of Upper North Island Supply Chain Strategy”.
Shifting the balance of work between the ports, and building major new transport links would be the country’s biggest-ever infrastructure undertaking – possibly five or more times the current champ, Auckland’s $4.4 billion City Rail Link.
Taken at face value, the picture painted of the current state of the Ports of Auckland, Port of Tauranga, and Northport at Marsden Point, shows a flawed regionally-owned port sector with duplication and competition possibly at the expense of the national interest.
Auckland dominates imports, Tauranga exports, both have 40 per cent of their container traffic empty in one direction, while Northport is a distant minnow, with limited access and 70 per cent owned by the other two.
What began as a plan to free Auckland’s waterfront from an ugly industrial port, to the benefit of Northport, is now as much, if not more, about the transport links between the ports and centres in the upper North Island.
A line highlighted in bold print in the 21-page report, points to the scale of making any change.
“We fundamentally believe that there is no point making further investment in Northport without investment in, and development of, the train line to Auckland.”
Call that billions of dollars, who knows how many, 2 or 5? The report doesn’t say.
Done properly it involves a crosstown section through southern Auckland, a third freight line through the commuter rail-dominated suburbs, electrification and double or triple tracking from West Auckland to Marsden Point with new tunnels along the way and presumably fleets of car-carrying wagons and handling facilities.
Future instalments of the trilogy will explore changing the ownership structure of ports, looking at the low-tax status enjoyed only by Auckland, and getting a clearer picture of future trade patterns.
Who knows what the future of the private motor car will look like in 20 years’ time, when the multi-billion investment needed to relocate the vehicle import trade, is ready to deliver.
The three-part study is an important piece of work, taking a long-term view on making possibly major structural change in transport links in the upper North Island, and its ports.
Part two outlining some options is said to be due as early as June, and part three – recommendations – in September, perhaps unhelpfully a month before the local body politicians who own Auckland’s port, and most of Tauranga’s and Northland’s, face re-election.
The interim report already casts doubt on the idea of building a new super-port either in Auckland’s Manukau Harbour or the Firth of Thames, hinting better use of the three ports may be the answer.
“We consider the issues not insurmountable,” concluded the working group’s interim report optimistically.
What it did not say was, nor are they likely to be simple, anything less than eye-wateringly expensive, and hugely complex.
Moving some or all of Auckland’s port out of the city and revitalising Northland’s port including building a rail line between the two are some of the options canvassed in a new report.
However, Auckland Mayor Phil Goff has warned against the potential loss of income from Ports of Auckland if it were moved or downsized, saying if the annual $50 million dividend was lost it could lead to a 4 per cent rate rise.
The first of three progress reports by a working group tasked with investigating New Zealand’s upper North Island supply chain strategy outlines key information about the country’s three main ports: Ports of Auckland on the city’s waterfront, Northport at Marsden Point near Whāngārei and Port of Tauranga.
The ports are critical to New Zealand’s freight task and together account for half of the country’s total export volume and two-thirds of its import volume, in tonnes.
Port of Tauranga handled the highest volume of all New Zealand ports (in tonnes) and was the most successful of the three upper North Island ports having capitalised on rail infrastructure provided to the Bay of Plenty region by the Government.
“We will therefore be considering whether similar investment in Northland would provide similar results for the region and Northport,” the working group said.
The report, released by Associate Minister of Transport Shane Jones, noted that overall imports are expected to increase across all upper North Island regions while exports will increase initially before declining at Northport and Port of Tauranga, largely because of projected decline in log exports.
However, it said roading and rail in the Northland region was so lacking that the working group “fundamentally believe there is no point making further investment in Northport without investment and development of the train line to Auckland”.
“… it is generally agreed that the lack of rail infrastructure and connectivity to Northport has hindered Northland’s economic development.”
Ports of Auckland occupied 77ha of Auckland waterfront with a book value of $735m, though this was thought to be well below valuation of comparable industrial land.
“This excludes the massive social, cultural, environmental and economic value that would be created by transforming this property into a globally iconic waterfront,” the working group said.
Stakeholders including the ports, shareholders and the road freight and shipping industries named several issues surrounding the current port system including:
• They are competing and not co-operating;
• Lack of rail infrastructure and port connectivity had been a brake on Northland’s economic development;
• Unanimous support for a fully functioning rail system to the ports;
• Concerns over duplication of port and inland port assets;
• Congestion was the main problem for freight operators.
Options to make the three ports work better included the Northland to Auckland rail spur, a second route between Auckland and Tauranga, a freight corridor through West Auckland, a West Auckland inland port, an expanded or moved Southdown inland port, a new mega port in the Firth of Thames, a vehicle servicing and import facility at Northport and a New Zealand dry dock.
Goff welcomed the report but said it did not present an analysis of options, the business case for each and the impact of each option on Auckland, the region and the country.
“The relocation of the Port out of Auckland’s city centre has some clear advantages.
“It would ultimately open up 77 hectares of central city and harbourside land and wharves for alternative and potentially more valuable uses.
“As in other international cities, it could enhance the attractiveness of Auckland as a place to live, work, enjoy and to visit. It would also reduce congestion caused by freight movement and pollution from associated activities.”
However, he said as a city of 1.7 million people making up 35 per cent of New Zealand’s population, Auckland needed to have the most cost-effective and efficient way of delivering goods and services to its people.
“Vital to the decision of moving Auckland’s port is the impact of each alternative location on Auckland consumers and businesses.”
Aucklanders needed to know whether and how much alternative port sites added to costs for the city, Goff said.
“We also need to ensure that the working group on the supply chain strategy considers the value of the investment Aucklanders have made in their port and the dividend return they get from it which in past years has been $50 million – equivalent to a 3 to 4 per cent rate increase if that dividend is lost.”
Port of Tauranga chief executive Mark Cairns said the progress report identified well-known issues such as the need for increased investment in road and rail networks and the historic financial under-performance and inconsistent reporting by some ports.
He said Port of Tauranga challenged some of the “facts, assumptions and implications” in the interim report, and were hopeful they will be addressed before the next report.
“For example, the report states that the Bay of Plenty and Waikato have benefitted from rail infrastructure and investment provided by the Government at no capital cost to the end user.
“This ignores the $267 million in rail costs paid by Port of Tauranga since 2010.”
National’s Transport spokesman Paul Goldsmith claimed the interim report showed a “thinly disguised preference for massive investment in rail between South Auckland and Northport, leading to a shift of activity away from the Ports of Auckland to Northport”.
“It also seems to be peddling the concept of a nationalised ports monopoly in the upper North Island. There is no evidence or analysis to back up the suggestion that such a nationalised monopoly would be more efficient than current arrangements.
“There is no evidence to suggest the billions it would cost to upgrade rail from Auckland to Whangarei, plus building a new spur to Marsden point and a new freight line across Auckland, would be the best use of scarce transport resources and would lead to a better outcome for exporters or consumers.”
Goldsmith said the Government was “quite right” to be inquiring into the efficiency of freight movements across the NOrth Island and planning for the long term future.
“We support careful and considered planning of future investment. Which is why National has supported the Government’s planned Infrastructure Commission to advise on such things. The direction of this report, however, undermines the Infrastructure Commission approach.”
A second report outlining advantages to changing from the status quo, international comparisons and a long-term view will be presented to Cabinet in June.
The final report with recommendations for future development and strategy will be presented to Cabinet in September.
Upper North Island ports by the numbers
• Exported 3.25 million revenue tonnes in one year, mostly logs as well as kiwifruit, steel and woodchip;
• Imported considerably lower amount of 311,000 tonnes to June 2018.
Port of Tauranga
• Accounted for 43 per cent of New Zealand’s total export volume in year to June 2018;
• 55 per cent of exports are wood and paper products, majority of which are logs.
Ports of Auckland
• Second largest container port after Tauranga, Ports of Auckland is significant for imports because of the population it serves – 35 per cent of New Zealand’s population.
• Largest importer of vehicles. In year to June 2018, Ports of Auckland handled almost 300,000 cars, a 43 per cent increase from 2014.
• Ports of Auckland and Port of Tauranga have an import-export imbalance – Auckland has higher imports and Tauranga higher exports. It means about 40 per cent of 20-foot containers stand empty.
Independent commissioners have granted consent to build the $10 million extension to Queens Wharf which will provide berthage for large cruise ships.
The 90-metre fixed gangway extension and two 15m by 15m concrete mooring structures fixed to the seabed, known as dolphin, is now set to go ahead.
The wharf can currently provide for cruise ships up to 294m and the dolphins will allow for ships of up to 362m.
Panuku Development Auckland lodged the resource consent application in July last year, which was followed by public submissions and five days of hearings.
Yesterday, the panel of three announced their decision to grant resource consent for the dolphins, subject to certain conditions.
“The proposal by Panuku that the occupation consent for the dolphins expire once Captain Cook Wharf is operational as a large cruise ship berth, or in 15 years’ time (whichever is the earlier), and that the structures are then removed, was a key feature of the application that weighed in its favour,” they said.
Numerous community and urban design groups have been fighting to stop the dolphin proposal, opposing further expansion of the harbour for port use.
Stop Stealing Our Harbour spokesman Michael Goldwater said allowing consent to be given was a disappointing outcome.
“We should be using existing infrastructure to berth these boats,” he told Newstalk ZB.
“This resource consent outcome is a failure of leadership by Mayor Goff and Auckland Council who have valued corporate welfare for the cruise industry over the long term wellbeing of our harbour.
Goldwater highlighted the potential environmental impact the extension could have on the harbour as a major concern.
However, the commissioners believed the impacts could be “avoided, remedied or mitigated” to an acceptable level.
Panuku Development chief operating officer David Rankin said the decision was being welcomed by the organisation.
The decision will enable to necessary infrastructure for the cruise industry to ensure continued growth to the sector, he said.
“The decision has thrown a lifeline to the cruise industry, which is facing increasing pressure from international ports to compete as larger ships continue to enter the market,” he said.
“Our growing cruise ship industry provides significant economic benefits to Auckland businesses; last year cruise ships transported nearly 270,000 passengers directly to the heart of our city providing a boost to the $200 million and 3000 local jobs that the cruise industry adds to the region’s economy.”
New Zealand Cruise Association chief executive Kevin O’Sullivan also agreed the decision was an important win for the local industry.
“It will ensure that Auckland will continue to be an important and integral part of regional cruise tourism,” he said.
“The provision of infrastructure for these larger cruise ships in Auckland will integrate well into the considerable development of infrastructure of large ships which has been carried out in other New Zealand ports.”
Following the decision from the commissioners, an appeal period is now open until May 15 for those who made submissions on the application.
An artist’s impression of a port-less Auckland. Graphic/Stop Stealing Our Harbour
New Zealand First appears as closed-minded on the Ports of Auckland as the other vested interests, who are either opposing change or advocating for alternatives.However dysfunctional those charged with providing vital transport infrastructure can be, they somehow always manage an instant massed-wagon-circling at the very mention of reform.
The Government is about to receive reports on both the future location of the Ports of Auckland and the feasibility of upgrading Northland’s rail. Labour’s support partner, New Zealand First, is fervently committed to moving some of Auckland’s port business to Northland, saying it will relieve our biggest city of congestion and bring much-needed growth to the north. For the coalition, this could become a make-or-break issue.
Unfortunately, NZ First appears as closed-minded on the issues as the other vested interests, who are either opposing change or advocating for alternatives, such as Tauranga, the Firth of Thames or Manukau Harbour.
Because of the complex governance and ownership issues of Ports of Auckland and other potentially affected ports and public entities, any Government changes will be extremely hard to negotiate. The choices available will also be sandbagged by the virtual impossibility of getting any case for new or restored rail to stack up financially.
However, the biggest hurdle will be patch protection – not just from commercial interests, but also from public agencies who too quickly forget the wider obligation that their state-conferred monopoly status puts on them.
Chief interested party is Auckland Council, which owns 100% of the Ports of Auckland. It has consistently defended its right to the port’s undiminished annual dividend of more than $50 million – to the point of vowing to build a multistorey waterfront car park for more revenue.
Mayor Phil Goff is adamant the port is essential to Auckland’s future. However, this assertion is debatable, given that a city such as Sydney survives very well with its harbour reserved for cruise ships and cargo sent to Port Botany, Wollongong or Newcastle.
Loss of port revenue would, however, doubtless force Aucklanders to pay for the loss with even higher rates, for benefits mostly accruing outside its boundaries. This would be unfair, especially to those on low incomes, and so politically dangerous that no sane administration would cause it to happen.
Perhaps a better starting point would be to regularise, even centralise, the haphazard patchwork of ports ownership. This would inevitably land the Government with a fat compensation bill, but the existing potpourri of local body, port-specific and private shareholders is a barrier to efficiency. Intra-agency competition and multiple interests – Auckland part-owns Tauranga’s and Northland’s port as well – further occlude the picture.
The National Party’s policy of treating the ports as discrete commercial entities immune from state interference is recklessly hands-off. But, by the same token, Aucklanders may be incensed at seeing their port asset commandeered, especially with NZ First so blatantly using Northland as its electoral base.
Yet, Auckland’s port must somehow be restored to being part of the national ports network. Aucklanders, used to the city’s infamous congestion, would be the first to agree it remains an international embarrassment that a prime waterfront site is used to store second-hand cars. Moving the port would unlock 77ha of superb shore land.
Northland’s Marsden Point tempts as an existing deep-water port, which, with a suitable rail spur from the Auckland line, could handle the business. Tourist and even commuter growth could ensue. Yet, there are other considerations, including the likelihood that moving the port to Northland would hugely increase congestion in Auckland, since most goods exported out of it are produced south of the city and would have to pass through it. Even if some of the goods went by train – and the expense of building rail tracks could itself prove prohibitive – the trains would be more frequent and longer, causing frustrating delays at level crossings. There are also the climate-change considerations, with increased emissions from transporting freight over longer distances.
In New Zealand, 99.7% of all imports and exports travel by sea, so the ports issue is not trivial. Any changes to these assets will affect, for better or worse, numerous other sectors and projects, not least the still-uncosted light rail to Auckland Airport. The sheer complexity and political risk may simply end in inertia. But everyone concerned has a duty to approach this debate with the country’s best interests at heart.
Tauranga’s port will continue to “flourish” regardless of whether Auckland’s port moves, city leaders say.
But some warned infrastructure investment was needed to make that happen.
The comments come as the Government is poised to make a big call on whether or not to shift Auckland’s port to the economically-deprived region of Northland.
It followed New Zealand First leader Winston Peters vowing to move Ports of Auckland up north in 2017 and a Labour-led coalition Government leading a study into the three Upper North Island ports with a focus on moving Ports of Auckland to Northport at Marsden Point.
An interim report on that study by a working group headed by Wayne Brown, a former Far North mayor, had been provided to ministers and was due to go to Cabinet shortly.
Ports of Tauranga chief executive Mark Cairns said nobody had seen the recommendations yet, but he believed Tauranga’s port would continue to perform well whatever the outcome was.
He believed the port’s strong growth would continue due to Tauranga’s location as the origin of a majority of the goods exported out of the port are located south of Auckland, not north.
The port owned a half share of Northport, he said.
Tauranga mayor Greg Brownless said if the shift happened, it would not happen for some time.
Tauranga’s port would become busier if it did, due to its good reputation throughout Australasia, he said.
He did not think any increase in activity at the port would be short-lived as it had the capacity for double the number of containers currently moved there.
Congestion caused by inadequate roading would become an issue if Tauranga’s port did get busier, so investment into the city’s state highway, roading and rail network would be vital to cater for any increased freight activity around the city, he said.
He said the port would need to ensure the benefit would be shared with the community.
Bay of Plenty Regional Council regional transport committee chairman Stuart Crosby said it was too early guess what the impact would be, but he was confident Tauranga’s port would continue to operate successfully regardless of what happened up north.
“We have the best operating port in Australasia and it will continue to flourish in the future.”
The Government, however, did need to invest “billions of dollars” in infrastructure to keep up with the port’s development.