Using Road Funds For Rail “highway Robbery”

The Government’s plan for “user-pays” road funding to further subsidise KiwiRail is highway robbery, Road Transport Forum (RTF) chief executive Nick Leggett says.

“The RTF opposes funding rail from the National Land Transport Fund (NLTF), which is funded by road users, and we have made a submission to Parliament’s Infrastructure Select Committee considering this law change,” Leggett says.

“We believe the excessive funding planned for rail is ideologically driven, rather than based in any business reality, and we don’t believe road users should have to pay for that. It’s highway robbery.

“The Government is expecting the NLTF to cover the already depleted road and rail infrastructure from a finite revenue source, and it will be road users paying for that. As the road money gets siphoned off for rail, we expect to see even more unsafe roads.

“Despite this Government’s desire to control markets, customers decide which freight mode best suits them. The Ministry of Transport’s National Freight Demand Study 2017/18 shows demand for road freight increased by 16%, while demand for rail freight declined by 17%. This is because the advantages of road over rail are many.

“Rail’s environmental benefits over road are simply illusionary, as any level of success for rail transport is entirely dependent on truck transport. Measuring environmental performance solely on the basis of the relative performance of the truck versus train, instead of the reality of point-to-point sender to receiver, is a very narrow perspective, typically favoured by academics without any interest in economics.

“This Bill stacks up the rail track network, owned exclusively by KiwiRail, against roading infrastructure utilised by all road users, owned by the Crown and a number of road controlling authorities (RCAs).

“Road users who pay into the NLTF have no ownership rights whatsoever, but are obliged to pay prescribed fees to use and maintain roads, ensuring safety expectations are met.

“Road users are also subject to property rates for providing accessibility to the roading network. This makes the suggested funding model in this Bill inequitable for road users.

“While the Bill attempts to counter this inequity with reference to track user fees (TUCs), there is no evidence of what those TUCs might look like.

“The road freight sector does not believe TUCs are going to meet the rail programme spend, which the Government has indicated will be significant. The principal rail operator arguably has no mandate to operate on a full cost recovery basis, so this puts road freight at a disadvantage to its heavily subsidised freight competition. “We agree rail services need support to provide a service complementary to road freight, however, rail freight’s strength is in long distance transportation (over 500km) of high volumes of relatively low value products, such as coal.

“In New Zealand’s freight market, the two modes should operate as complementary, not competitive,” Leggett says.

Government to buy land for rail to Northport and Marsden Point

Charlie  Dreaver

Charlie Dreaver, Political Reportercharlie.dreaver@rnz.co.nz

The government has announced it will be buying land to build a spurline to Northport and Marsden Point and upgrading rail in the Northland region.

Railroad tracks. Railway tracks. generic

$40m has been earmarked to to purchase land along the designated route of the spur line to Northport and Marsden Point. Photo: 123RF

Today’s announcement comes as ministers are still considering the New Zealand First-backed policy of moving the bulk of Auckland’s freight operations to Northport.

State Owned Enterprises Minister Winston Peters and Regional Economic Development Minister Shane Jones today said $109.7 million would be invested into upgrading Northland’s rail infrastructure through the Provincial Growth Fund.

They said $69.7m would be spent to lower the tracks through tunnels on the Northland Line between Swanson and Whangarei, reopening the rail line from Kauri and building a container terminal at Otiria.

Another $40m was earmarked to purchase land along the designated route of the spur line to Northport and Marsden Point.

Jones said the investment would allow KiwiRail to secure the land needed for a new rail line to Northport.

“Having this land means that when the government does make its final decision about a future port in Northland, we will be ready to get going,” he said.

Last year it was announced $95m of provincial growth funding would be used to undertake maintenance on the rail line to Whangarei.

Peters said this second phase of funding was a game changer, allowing more freight onto rail and help reduce road congestion, road maintenance costs and lower carbon emissions.

“It will also mean that modern shipping containers can be carried through the tunnels on the North Auckland Line,” he said.

Mayors back move

In a joint statement, Far North mayor John Carter, Whangarei mayor Sheryl Mai and Kaipara mayor Jason Smith welcomed the announcement.

“These are historic investments, the start of a decade-long economic transformation for Northland to make an ever-greater contribution to the prosperity of the Upper North Island and all of New Zealand,” they said.

Carter hoped today’s announcement was a sign of good things to come for Northland, and said it was now up to the mayors to tell Northlanders and those in Auckland of the benefits of moving to Northport.

“It’s an indication of the fact that we now need to do our part so that then the parliamentarians, particularly during an election year, can do their part and they know they will get the support of the people if they come up with the goods,” he said.

He said moving the Auckland’s main port to Northport would be good for not only Northland but the whole of New Zealand.

National criticises spend on rail link before port decision

National Party Transport spokesperson Chris Bishop said the government was going about it the wrong way.

“The first thing to do should be to decide if the port is going to move to Northport and then you go about creating the infrastructure to make that happen.

“Instead what New Zealand First has essentially forced on the government is spending $40 million to buy the land for a spurline to Northport, in advance of a decision being made to move the port,” he said.

Bishop said if the port did not move, the government would have spent $40 million on a line that was irrelevant.

However, Prime Minister Jacinda Ardern said it showed they were a common sense government.

“It makes sense to connect your port to rail, regardless.”

She would not say whether it signalled a move to Northport.

Government’s transport package takes the wind out of the Opposition’s sails, but new promises put it under more pressure to deliver

Jenée Tibshraeny's picture

30th Jan 20, 8:30am byJenée Tibshraeny

Phil Twyford, Jacinda Ardern, Grant Robertson

By Jenée Tibshraeny

Labour and NZ First have pocketed political wins from Wednesday’s big infrastructure project reveal.   

The Coalition Government has taken the wind out of the Opposition’s sails; Prime Minister Jacinda Ardern now adopting National’s “we’re the party of infrastructure” line.

Both the business community and unions are broadly pleased with the $6.8 billion of transport projects to be brought forward and funded.

The Government is now under pressure to execute its plans well.

With KiwiBuild under-delivering and it still being undecided whether the New Zealand Transport Agency or New Zealand Super Fund will run the Auckland light rail project, the public’s tolerance for teething problems/stuff-ups related to much-needed infrastructure is near zero.

The same goes for the construction sector, which is crying out for certainty and continuity.  

Some of the transport projects announced on Wednesday were consented under the National-led Government, and some were earmarked in the second phase of its Roads of National Significance, criticised by Labour when in opposition.

Even though the designs of these projects have been “improved”, National leader Simon Bridges can legitimately claim parts of the Coalition Government’s big reveal are a “copy” of his party’s plans.

He also makes a fair point that the Government wasted time “tearing up these plans and putting them back together again”.

But the reality is, these roads weren’t built under National, so in the eyes of the public (which just want the work done), the Coalition Government comes out on top.

Bridges said National will “go even further” on infrastructure investment.

But the question is, where will it get the money from, especially as it wants to borrow less as a portion of gross domestic product (GDP) than the Government is.

National is open to public private partnerships. It also wants to introduce “revenue neutral” congestion charging, which it will need to pitch carefully so it doesn’t get slammed for going back on its word and introducing a “tax”.  

But the Government has left National little to attack it over in election year when it comes to this new infrastructure spend.

NZ First one-ups the Greens

NZ First leader Winston Peters was chipper at Wednesday’s announcement and even had to be dragged away from the media by NZ First MP Shane Jones (who made his presence known) to get to his next engagement.  

Just over $1b was secured for rail, as well as $692m to upgrade SH1, Whangarei to Port Marsden, to four lanes.

Questions were raised at the press conference over whether this signalled the Government was leaning towards moving the Ports of Auckland north.

Cabinet is expected to report back on the matter in May. It wasn’t sold on a working group recommendation last year to move the operation to Northport, as NZ First wishes.

As for the Green Party, it looked a bit like the neglected sibling in the Coalition Government family.

While some of the roading upgrades will include cycle and walkways, some investment is going into public transport, and funding has been committed to the Skypath over the Auckland Harbour Bridge, the transport package is unashamedly road-heavy.

The party’s co-leader James Shaw acknowledged if he could have things his way, the mix of projects would look different. 

He characteristically kept face, but will yet again have to tell Green supporters something to the tune of: “We know it isn’t perfect, but we’re doing what we can within the bounds of the political system.”

James Shaw defends transport spend-up: $5.3b on roads

Climate Change Minister James Shaw said today's announcement marked the most significant upgrade in public transport infrastructure in the time he has been alive. Photo / Mark Mitchell.
Climate Change Minister James Shaw said today’s announcement marked the most significant upgrade in public transport infrastructure in the time he has been alive. Photo / Mark Mitchell.

By: Georgina Campbellgeorgina@newstalkzb.co.nz

Climate Change Minister James Shaw is defending the Government’s $12b infrastructure announcement, in which roads are the big winner, amid criticism from green lobby groups.

Greenpeace and Generation Zero have criticised the package as a missed opportunity to clean up New Zealand’s transport network.

Although Shaw said as co-leader of the Greens it should come as no surprise that the party would have prioritised a different mix, he backed the package as Climate Change Minister.

“You can’t take away from the fact that there’s $1.8-billion of this package that is devoted to rail, light rail, cycling, walking infrastructure, the $200m that we’re putting into the clean-powered public service.”

Major roading projects announced were being rescoped to include, where possible, things like public transport, he said.

Roads make up $5.3b of the $6.8b spend on transport in the infrastructure package announced today.

That gives the green light to several four-lane highways, including State Highway 1 from Whangārei to Port Marsden, Mill Rd in South Auckland, widening SH1 from Papakura to Drury, the Tauranga Northern Link and SH1 from Otaki to north of Levin.

It was a coalition Government and the Greens had influenced the shape of the package overall, Shaw said.

He was particularly “delighted” with projects like the Auckland Harbour Bridge “SkyPath” going ahead, and the $1.1b for rail.

“When you consider the overall mix it will it will lead to a real shift in a congestion-free network for New Zealand.”

But Greenpeace climate and energy campaigner Amanda Larsson has slammed today’s announcement as a missed opportunity.

More roads would lead to more cars, which would contribute to more emissions, she said.

“The climate crisis is fundamentally an infrastructure challenge. We can move away from our dependence on dirty fuels by building lots of solar, wind, batteries, electric trains, busways, and cycleways. All of this creates thousands of jobs,and gives people options that they currently don’t have.

Generation Zero was equally disappointed.

Spokesman David Robertson said the Government had allocated an excessive amount of money for roads.

“These roading projects are paving the way to a climate disaster. This money should instead be spent on accelerating public transport infrastructure across New Zealand which in turn would encourage a mode shift, and reduce both congestion and emissions.”

But Shaw wasn’t worried today’s announcement would come back to bite the party in this year’s election campaign.

“If you look at the scale of what we’re investing here in cycleways, in walking infrastructure, in heavy rail, in light rail right around the country and in some of our most congested cities, I think this upgrade is the most significant upgrade in public transport infrastructure in the time I have been alive.”

Nation ‘$1b poorer’ if port leaves Auckland

With a working group’s third report on Port of Auckland’s future not available to the public, others are pushing ahead with their own analysis, Dileepa Fonseka reports.

A third port study will go before a Cabinet committee on Wednesday but on Tuesday Finance Minister Grant Robertson gave a clear indication it wouldn’t be enough on its own to persuade him to support moving Auckland’s port to Northland.

“The report’s a useful contribution, but as I’ve said to you previously, I’ve got further questions I want answered.”

“This is a massive, massive move we’re talking about here. So you know, we’ll go through the process, but we haven’t made a decision to do it.”

Meanwhile another report into the future of Auckland’s port has been released. 

The NZEIR report calculates New Zealand would be $1b poorer if the Port of Auckland’s functions were taken up by either Northport or Tauranga. 

“Auckland is both the largest source of import demand in New Zealand, and the largest concentration of commercial activity,” says the report.

“An equally profitable port elsewhere, employing the same number of people, would have a similar direct effect on its local economy, but its wider economic effect would depend on how efficiently their customers’ exports and imports moved from the port to their doors.”

The use of diesel trains to transport goods from Northport to Auckland would emit 121,461 tonnes of carbon dioxide into the atmosphere every year. 

“Longer and more frequent road or rail trips would be required to bring imports to their ultimate destination or to the port for exporting.”

Most of the costs of relocating the port would be borne by Auckland in terms of reduced consumption, higher prices, and longer wait times for freight. 

People and businesses in New Zealand’s largest city would see the cost of their imports go up by $549m if port operations moved to Northland or $626m if port operations moved to Tauranga, the report says. 

But the rest of the country would see the cost of their imports go down if the port’s business was taken up by Port of Tauranga or Northport.

Economist Laurence Kubiak, who authored the report, said this was because other ports, like Centreport in Wellington for example, would import more and goods would have to travel a shorter distance to get to consumers in those areas. 

Anticipating the report’s release 

Both Infrastructure Minister Shane Jones and Upper North Island Supply working group chair Wayne Brown told Newsroom last week they were looking forward to a possible release of the full report this week after Cabinet deliberations.

After details of the report leaked, Auckland’s Mayor Phil Goff has bristled at its reported suggestion POAL could be taken off Auckland Council with only waterfront space as compensation, and Jones has called POAL CEO Tony Gibson a “recreant” – cowardly renegade – after details emerged that Jones warned Gibson not to put his head in a “political noose” by going up against NZ First on the port issue. 

Others have expressed concern at the mode shift that would be required from shippers of freight – who have been favouring trucks in greater numbers – in order to make a Northport option work. 

Supporters have lined up behind moving the port from its current location in Central Auckland too. 

RNZ reported former Prime Ministers John Key and Helen Clark were backing a “Waterfront 2029” to get rid of POAL and The New Zealand Herald reported National MP Nikki Kaye had expressed a preference for moving the port but wanted to explore a number of options including the Firth of Thames.

David Farrar: My stance on Ports of Auckland

I have long been of the view that using prime waterfront land in both Auckland and Wellington as an industrial port is not in the best interests of either city.

It was logical for the ports to be there scores of years ago as back then there was no other significant use of waterfront areas. But today in modern cities waterfront areas adjacent to the CBD are the most highly sought after areas for restaurants, bars, hotels and recreation spaces.

So I support the Ports of Auckland moving from its current location.

But that doesn’t mean politicians deciding where it should move to and/or closing it down in favour of other ports.

What I would support is the Auckland Council splitting the land and operations of the Port Company in two. They take back the land and lease it to the Ports of Auckland for say a final 20 year term. Maybe 15, maybe 25. The key thing is you have a definite deadline for the Port to move.

This is a decision that Auckland Council should make. Firstly because they own Ports of Auckland and have property rights over it. They should not be legislated over by central Government. Secondly because as the governing body of Auckland they have an interest in turning the waterfront land into something more exciting.

So that is all that needs to and should happen. Then Ports of Auckland will make commercial decisions about what to do – ranging from a new operation in Firth of Thames to working with the Whangarei or Tauranga ports.

But what the Government should not do is commit the taxpayer to $10 billion spending in order to help Shane Jones win a seat by declaring it will move to Whangarei.

I am very dubious that Whangarei can go from one container ship a week to 10 ships a week. Even if it could, it is highly doubtful ship companies would choose to use it over Tauranga. And you can’t even be sensible about Whangarei unless you commit to four laning SH1 up there.

Also Politik makes the point that shipping companies want to use ports that can balance export and import loads. So the talk of Whangarei is desperate stuff to try and win Jones a seat.

If the Government decides it can dictate what happens, it could end in disaster. Our exporters and importers could face huge delays and costs.

So by all means Auckland Council should set a deadline for Ports of Auckland to move from the waterfront. There is better use for that land. But it should be the ports companies working with exporters and importers who decide on future locations, not Phil Twyford and Shane Jones.

Steven Joyce: Plan to move port north to Whangārei just doesn’t stack up

Steven Joyce05:00, Nov 24 2019

OPINION: The case for moving the Auckland port to Whangārei is apparently compelling. So compelling in fact that none of us are yet allowed to see it.

The final report of three in what appears to be a very long softening up exercise was received by the Government around a fortnight ago – and it won’t be released until Cabinet has decided on it. In the meantime we’ve been treated to a round of name calling. The study’s lead author is reportedly calling people who disagree with him ‘idiots’ and ‘vested interests’, while chief lobbyist for the idea, Shane Jones, labels the current port CEO a cowardly renegade.

Respected economists NZIER and Castalia have provided critiques of the proposal, based on the earlier reports. While funded by the current port (cue vested interests attack), they highlight many useful questions like the vulnerability of the proposed new land transport corridors, the big increase in transport emissions caused by the shift, and the true costs involved (over $10 billion).

Northport, near Whangārei, could be set for expansion if plans to move Auckland port activity to the northern city.
SUPPLIED Northport, near Whangārei, could be set for expansion if plans to move Auckland port activity to the northern city.

They rightly ask why Whangarei is the favoured location now when just three years ago it ranked 12th most suitable, according to the last port study that used the same set of consultants.

More basically there is a straightforward reason why we shouldn’t attempt to shift Auckland’s port to Whangārei, and that is geography. It is simply the wrong location.

Firstly, it is too far away. The whole point of ports in port cities is to unload and load the freight close to the action, to reduce land transport costs and delays. Much of the freight that comes across the current port is utilised within 20km of it, much of that south of the Waitemata. Being close makes sense. Berthing it hours away and freighting it in by truck and train doesn’t.

Yes, Sydney and Melbourne shifted their ports, but nothing like as far. Sydney’s container port at Port Botany is 15 kilometres from their CBD. Melbourne’s container terminal is 8km from the CBD. If this project went ahead, Auckland’s port would be over 150km from the CBD.

The second geographic problem is the shape of Auckland city. It is built on a narrow piece of land just a few kilometres wide, hemmed in by two beautiful harbours which, as Aucklanders know, already make it hard to get to work each day.

Imagine instead of all the freight landing by sea near the middle of the city and radiating out from there – you land it out the opposite side of the city from where most people live and work and then use trucks and trains to freight it back down from the north and through the narrow isthmus across already over-worked land transport corridors to places like Onehunga, Wiri, and further south.

We would experience a whole new level of road and rail congestion in the north and west, and no reduction in the centre or south.

The third geographic issue relates to the area south of Auckland. Fully half of New Zealand’s population (roughly 2½ million) lives north of Taupō, around a million outside of Auckland. Only 180,000 of those live in Northland. Currently businesses serving the upper North Island have the choice of two ports each roughly 120km from Hamilton, and competition helps keep freight prices reasonable.

Shifting one of them 150km further away over the other side of Auckland would effectively reduce their options to one, and undoubtedly increase their costs.

It simply makes no sense to spend billions of dollars to reduce the competitiveness of Auckland and the upper North Island in this way.

Northland definitely needs infrastructure investment. It was shamefully ignored for decades. The last government started with the four-laning of State Highway 1 to Warkworth (under construction) and Wellsford (currently abandoned). There was the much-maligned replacement of one-way bridges – four of which have been or are being built, and upgrades to the highways north of Whangārei.

The infrastructure required in Northland doesn’t rely on the excuse of an ill-conceived plan to shift Auckland’s port. The most significant project, the four-laning of State Highway 1 to Whangārei needs to happen anyway, especially through the vulnerable choke points of Dome Valley and Te Hana. Building that over the next 10 years would unlock massive development opportunities for all of Northland, just as the Waikato Expressway has done for its region.

So I have a suggestion. Let’s re-start the Northland expressway project and maybe even start shifting the Navy up to Whangārei (which has far fewer ramifications for the wider economy). Let’s build the third main railway line at Wiri, sort out the Grafton interchange with the current port, and crack on with a third harbour crossing. Then come back and talk about the port again in a decade’s time. There is a lot to get on with now without this hugely expensive poorly argued diversion.

Steven Joyce is a former minister in the last National government.
STUFFSteven Joyce is a former minister in the last National government.

Jones calls Port CEO ‘cowardly renegade’

Please note – Cubic does not support Mr Jones’ comments, or the proposal to move the port to Northport.

Shane Jones has called the Port of Auckland’s CEO a ‘cowardly renegade’ over the Port’s lobbying against New Zealand First’s plan to shift the port to Northland. Dileepa Fonseka also reports on the pros and cons of instead building a mega-port in the Firth of Thames.

Trucking industry leaders, infrastructure planners and port operators want an evidence-based debate on the upper North Island’s port strategy and are concerned the official study has focused on New Zealand First’s preferred option of moving the Port of Auckland to Northland. Instead, they want the idea of a new ‘greenfields’ port at the Firth of Thames considered for the long-term. 

Ports of Auckland CEO Tony Gibson told Newsroom New Zealand Inc should consider a new “mega-port” if it truly believes Auckland is not big enough to handle future freight growth.

But Infrastructure Minister Shane Jones is having none of it, and has instead ramped up his personal attacks on Gibson and threatened to take his complaints to Gibson’s board.

“To privatise the Firth of Thames and build a Singaporean-style port out there you need the mandate of the people,” Jones told Newsroom.

“The Ports of Auckland can’t even get a mandate from the majority of Auckland’s,” he said.

Singapore Port: Jones says a “Singaporean-style” port in the Firth of Thames isn’t feasible. Photo: Lynn Grieveson

Gibson said he wanted to correct “mistruths” in the port debate.

“What we’ve advocated all along is as New Zealanders, as New Zealand Inc, we want the most cost-effective productive supply chain – and that’s not Northland.”

A number of economists and consultants, some commissioned by Ports of Auckland (POAL), have questioned the conclusion of an Upper North Island Supply Chain Strategy (UNISCS) report making its way through cabinet. 

“If the evidence is there and you follow the process that is best practice then we would absolutely support good well-founded investment decisions.”

The report concludes the government should get POAL to give up its central city port site and invest close to $10 billion prepping Northport to take its place.

Road Transport Chief Executive Nick Leggett thinks the working group asked the wrong question with its study and said the Northport move was a “solution looking for a problem”, while Infometrics economist Brad Olsen believed the port debate showed the need for an overall infrastructure strategy with less “cherry-picking” of individual projects. 

But Infrastructure NZ CEO Paul Blair, who questions the analysis in the port report, said Northport was “the better of the options on a prima facie basis”.

“If the evidence is there and you follow the process that is best practice then we would absolutely support good well-founded investment decisions.”

Mega port versus Northport

In a world of 3D printing and sensitivity around emissions Gibson said there was every possibility freight loads would experience low growth.

New Zealand needed to plan for a number of “freight futures,” including one where its freight load increased. 

In such a scenario he said the option of building a “mega port” in the Firth of Thames could fill that gap – in 30 or 40 years time. 

“We need to take a much, much longer-term approach.”

Nick Leggett says New Zealand too quickly jumps to specific projects before asking what’s needed. Photo: John Sefton

A Firth of Thames port would be located close to Auckland – the port’s consumers – and not that different to the Northport option in cost, Gibson said.

It’s a view at odds with UNISCS chairman Wayne Brown’s own view. He said the latest report had examined the Firth of Thames option, but found too many infrastructure costs associated with it.

“This is why New Zealand gets caught in this infrastructure predicament because we jump to specifics and locations and projects before we ask what’s needed.”

Jones agreed and said a “Singaporean-style” mega port in the Firth of Thames would need a much larger government investment than Northport would. 

However, Jones said he accepted concerns Twyford and Robertson had raised that more analysis than UNISCS’ current set of reports were needed.

“We’ve got at least a year to do that.”

Leggett questioned whether a port move in either direction was needed at all.

“This is why New Zealand gets caught in this infrastructure predicament because we jump to specifics and locations and projects before we ask what’s needed.”

Even rail upgrades to Northport – which Brown said should go ahead immediately – might not be justified if you looked at the greatest rail infrastructure needs of New Zealand as a whole, Leggett said.

“I don’t think this is where you would start that, you would be improving the main [rail] trunk line between Auckland and Wellington.”

War of words

Jones accused Gibson of being an “anti-NZ First CEO” who had gone “totally renegade” with his actions around the port study.

“When our caucus meets I will seek their mandate to demand an explanation from their [POAL’s] board as to why they have mandated this recreant to show such animus towards New Zealand First,” he said.

A ‘recreant’ is defined in the Merriam-Webster dictionary as someone who is cowardly or a deserter.

Leggett said there wasn’t a place for “threats or intimidation” in an infrastructure debate:

“It flies in the face of what is needed: evidence, data and asking what’s best for the greatest number of people.”

“What I explained was I’m not entering a political debate, I’m entering a practical debate.”

The stoush started at a meeting in Minister Grant Robertson’s office last week where Jones warned Gibson off venturing into politics.

Gibson said that meeting began with him asking why there were differences between conclusions reached from a first Ernst & Young report – which had ranked Northport 12th – and moved on to allegations from Gibson that UNISCS had moved away from its terms of reference. 

“What I explained was I’m not entering a political debate, I’m entering a practical debate.”

Gibson said the UNISCS was a “missed opportunity” to look at the supply chain as a whole. 

“I can’t understand why this recreant would believe that our Cabinet ministers wouldn’t skilfully work through these unresolved issues.”

“What NZ Inc deserves is a supply chain and a supply chain based on cold, hard facts based on a proper business case,” he said. 

Jones said it was always understood that more work would need to be done on the reports making their way through cabinet. 

“I can’t understand why this recreant would believe that our Cabinet ministers wouldn’t skilfully work through these unresolved issues.”

“Those are decisions made by politicians they’re not made by unelected renegade CEOs.”

Olsen said infrastructure decisions for the nation should fall somewhere between a purely technical analysis and a political call.

This was especially true in the ports debate where he said you could “make the numbers talk whichever way you want” at this stage.

“I don’t think we can have a purely technically-driven evaluation of infrastructure…where the balance needs to be is that we need to be able to pick ideas that are well integrated,” Olsen said.

“At the end of the day the public have charged politicians with the ability to spend public money.”

Auckland Port move: CEO decries ‘made up facts’ by pro-move group

Todd Niall 15:50, Nov 22 2019

Ports of Auckland CEO Tony Gibson
SUPPLIED/POALPorts of Auckland CEO Tony Gibson

The chief executive of Auckland’s port company has broken his silence and joined a public war of words over the case being promoted to shift the port to Northland.

Tony Gibson has described arguments being promoted by Wayne Brown, the chair of a government-funded working party, as a “jumble of made-up ‘facts'”. 

Brown chaired the Upper North Island Supply Chain Strategy (UNISCS) group, being driven by New Zealand First, and which recommended closing Auckland’s port and expanding Northport at Marsden Point, at an estimated cost of $10 billion.PlayMuteCurrent Time0:17/Duration Time1:32Loaded: 0%Progress: 0% FullscreenSTUFFPrime Minister Jacinda Ardern on the future of the report looking at Auckland’s Port

Gibson said he was not against an eventual move of the port from Auckland’s waterfront, “but can we at least move it somewhere sensible”.

Brown has been promoting to media, arguments in favour of the move, following the delivery to the government of the final, and still-confidential report which refines the “move” recommendation of the interim report released in October.

Northport at Marsden Point is recommended by a working group for expansion to replace Auckland's port
SUPPLIEDNorthport at Marsden Point is recommended by a working group for expansion to replace Auckland’s port

“This is the fifth port study in my eight years as CEO of Ports of Auckland, and, well, let’s say it’s not the best,” said Gibson.

Ports of Auckland this week released reviews it had commissioned by two consultants, which were critical of an economic analysis produced by Ernst and Young for UNISC, which had backed the move and estimated the benefits to be double the costs.

One review by NZIER said the “move” recommendation should treated “with a high degree of caution”, while Castalia argued the true extra cost of moving could be nearly four times EY’s estimate.  

An email purportedly sent by the New Zealand First party, seeking donations by making a link to its port-move policy
TWITTERAn email purportedly sent by the New Zealand First party, seeking donations by making a link to its port-move policy

“In their 2016 study (for Auckland Council), EY said that Northport in Whangarei was almost the last place they’d move Auckland’s port to, yet in this recent study they say it’s the best,” said Gibson.

He disagreed with Brown’s argument that with 30 per cent of Auckland’s imports currently arriving via Port of Tauranga, they cost no more to deliver than imports that come across Auckland’s own wharves.

“That’s because Ports of Auckland is still here so if Port of Tauranga charged more than us, they wouldn’t have a business. Close Auckland’s port and watch prices rise,” said the CEO.

Stuff understands Gibson was told a week ago by Associate Transport Minister and New Zealand First MP Shane Jones – the main proponent of the “move” case – not to put his head in “a political noose” by taking part in public debate.

Jones told Stuff he was aware of differing views over EY’s work, but considered the criticism “part of the consultancy gossip chain”.

Gibson disputed Brown’s claim that the land occupied by Port of Auckland, could be worth $6 billion if freed up.

“We’re required by the Auditor General to value the port land as if it was in its ‘highest and best use’. Every time, skilled and experienced valuers say the land is worth less than a billion dollars.”

Gibson’s comments today had been provided in advance, to Ports of Auckland’s owner the Auckland Council, but the mayor Phil Goff is in Australia on leave and was not available for comment.

Goff and Brown have previously clashed publicly, over the direction of the study, and whether Auckland would be compensated if it’s port was moved.

Whether New Zealand First’s policy to re-locate the port goes beyond the completion of the UNISCS report, will depend on cabinet when it considers the report next month.

Completion of the government-funded study was part of the 2017 coalition agreement between New Zealand First and Labour.

“I am not going to make commitments beyond receiving the final report because we need to see what evidence has been compiled, and what the report tells us,” Prime Minister Jacinda Ardern, told Stuff in October. 

Stuff has been trying to confirm the authenticity of a fund-raising email sent out in the name of the New Zealand First party, which uses its policy on moving Auckland’s port as encouragement to donate.

A spokesperson for Shane Jones said the minister had no knowledge of it, and the party leader’s office referred Stuff to MP Darroch Ball, who has not responded.

Stuff

Northland port study mocked as inadequate

An economic analysis backing the move of the Port of Auckland to Northland has been panned as inadequate, poorly drafted, and full of padding.

AUCKLAND - JULY 12 2018:Freight ship in Ports of Auckland. its New Zealands largest commercial port handling more than NZ$20 billion of goods per year

Ports of Auckland. Photo: 123RF

The final report of a working party looking into the proposal was delivered to the government last week, giving its backing to a $10 billion move to Whangārei’s Northport, with the economic justification for the move contained in a report by advisory firm EY.

But Auckland’s port company has had the EY report put under the microscope by two economic consultancies – the New Zealand Institute of Economic Research (NZIER) and international firm Castalia.

Both studies said the EY report was short on numbers, made simplistic assumptions, and underestimated the costs of the plan while overestimating the benefits.

“The first and the most obvious point to make is that the report entitled ‘Economic Analysis of Upper North Island Supply Chain’ is nothing of the kind as it provides absolutely no information on how the supposed benefits are estimated,” the Castalia report said.

“The report is poorly drafted and contains almost no supporting evidence.”

WHANGAREI,NZ - Ship, wood logs and cranes in Northport

Northport in Whangarei. Photo: 123RF

Castalia said the EY study appeared to underestimate the cost of shifting the Port of Auckland to Northland by up to $3bn, while it overstated the benefits to Auckland City from freeing up waterfront land, and seemed to ignore that a shift north would likely see importers and exporters in the region put their business through the Port of Tauranga.

The NZIER analysis said the EY study was full of padding and speculation.

“The report has failed to address the feasibility question with sufficient transparency to provide a credible basis for advice to ministers.”

It also noted that EY had been involved in a 2017 report on the future of the port, which concluded the Firth of Thames or Manukau Harbour were best options for relocation and ranked the Northport option lowly.

Head of the Upper North Island Supply Chain working group, Wayne Brown, said the counter-review by the Ports of Auckland was “rubbish” and about “job preservation”.

The report given to the government relied on much more than the one EY report, with the group consulting 80 organisations, he said.

And he disputed the suggestion that carbon emissions would be greatly increased, saying Northport was closer for ships to get to and would use more rail and less roading than Auckland.

Ports of Auckland management declined to be interviewed but it a statement said the reviews spoke for themselves.

“They [the reviews] show that there are major problems with the EY study and that the idea of moving Auckland’s port to Northland is seriously flawed,” a port spokesman said.