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.

Cabinet ministers want more homework done on port relocation

Shane Jones is keen to avoid too many more lengthy reports but acknowledges it’s a once-in-a-generation project and widespread buy-in is important. Photo: RNZ / Richard Tindiller.

Cabinet ministers have ordered more work to be done on the Northport proposal, to report back to Cabinet mid next year.

It’s officially released the report of the working group set up to consider the best configuration for the upper North Island ports, which came back with a strong recommendation to progressively move Auckland’s freight operations to Northland.

The Transport Ministry will now do more work on funding and financing options, governance and commercial considerations, land use planning and a range of other factors.

(Read the full report: PDF 1.4MB)

The Cabinet paper released alongside the report said the “key issue” for ministers was “whether the the potential gain… is sufficient to justify the significant Crown seed investment and possible need for regulatory and legislative intervention”.

Using the latter approach, it said, would result in “significant levers to use given the implications for private property rights”.

The working group made its one recommendations after considering eight scenarios – Cabinet ministers also want the ministry to also take another look at those scenarios.

(Read the full report: PDF 1.1MB)

The paper noted the “limited share of decision making rights” held by the Crown if it comes to relocating ports, and the importance of getting key stakeholders such as the Ports of Auckland and the Auckland Council on board.

“We advocate early and open engagement with the owners of the current upper North Island ports…and the Port Companies” to build consensus, the paper said.

The current owners are “cornerstone partners whose agreement and cooperation in any decision will be a requirement of making progress”.

It acknowledged engagement with those parties had been “limited to date…we anticipate aligning the partners will take some time to achieve”.

The ministry will also work with the newly formed Infrastructure Commission to help with the analysis.

Associate Transport Minister and chief cheerleader Shane Jones said he was “pleased” his Cabinet colleagues have “recognised the merit of this report and have agreed to move forward with this work”.

“I expect this analysis to consider environmental effects, including on New Zealand’s overall greenhouse gas emissions, and consideration of government infrastructure investments in roads and rail, for example, building a rail spur to Marsden Point,” he said.

“Nobody is keen on spending too much longer developing lengthy reports but this is a once-in-a-generation project and widespread buy-in is important, as is the need to make the best decisions for the long-term prosperity of our supply chain.”

It remained his view that Northport was “the most sensible relocation option” but he accepted this “is a whole-of-government decision”.

The working group has estimated the cost of the Northport proposal at around $10 billion.

Cabinet expects a report back by May next year. The report has a budget of $2 million.

Goff says compensation essential

Auckland’s Mayor Phil Goff says the city’s residents will need compensation when the port is eventually relocated.

Goff said a newly released working group report on the Northport proposal suggests Auckland is left with the land rather than being bought out.

He said residents have invested over $600m in the port and should be treated as shareholders.

“They need to get some sort of compensation if that asset were to get taken off them and that’s basically what Treasury and the Ministry of Transport have pointed towards,” Goff said.

“This isn’t the wild west, you can’t go around nationalising things and saying: ‘well, just be grateful we’ve left you the land even if we’ve taken the value of the company off it’.”

Goff said he was pleased Cabinet ministers have ordered more work to be done on the Northport proposal.

“What we wanted was evidence driven, robust and independent of any vested interest group report saying how it should happen and where it should go to,” he said.

‘Pie in the sky’ – Bridges

National’s leader Simon Bridges said the $10b price would be a big hit on the government’s books.

“If they make this decision they won’t have a single bean left from their infrastructure spend up; they can only spend this borrowed money once.”

And he questioned the government’s ability to make Northport a reality.

“These guys can’t deliver, they are unrealistic, they’re pie in the sky, they come up with a lot of stuff. They’re always short on the implementation and the delivery – this thing is fraught with issues.”

Northport wants to talk to two other ports

Northport said it is ready to meet with Ports of Auckland and Port of Tauranga to discuss the future of freight for the North Island.

In a statement, its chairman Murray Jagger said a newly released working group report on the Northport proposal gives it confidence to talk about the potential opportunities.

Mr Jagger said the three ports need to digest the ramifications of the report and discuss the situation together.

“Northport has a very clear vision of the role it can play in the economic growth of Northland, Auckland and New Zealand,” he said.

“Significant growth is possible here. We have been clear for many years that we stand ready to assist in any way we can to support Auckland’s growth and the aspirations that Aucklanders have for their waterfront.”

Mr Jagger said he hoped to convene a meeting of the chairs of all three ports involved – Northport, Port of Tauranga and Ports of Auckland.

“We need to digest the ramifications of what we’ve seen and heard today, and flesh out a win-win-win situation not just for our three communities, but for all of New Zealand,” he said.

“We then need to seek the input of tangata whenua, our wider communities, and business and civic leadership before bringing these suggestions to government.”

Ports of Auckland has declined an interview with RNZ.

Dave Morgan, flamboyant and newsworthy union leader

Karl du Fresne, Dec 07 2019

Dave Morgan, pictured on his retirement as national secretary of the Maritime Union in 2003.
MAARTEN HOLL/STUFF Dave Morgan, pictured on his retirement as national secretary of the Maritime Union in 2003.

David John (Dave) Morgan, trade unionist; b Adelaide, South Australia, May 29, 1940; d Masterton, November 5, 2019

Dave Morgan was one of the last of a generation of New Zealand trade union leaders who were once household names.

His death at the age of 79 recalled a time when industrial disputes were constantly in the headlines and union leaders such as Morgan, Pat Kelly, Bill Andersen, Ken Douglas, Blue Kennedy and Con Devitt were publicly branded as wreckers and agitators. 

Of that coterie of formidable unionists, only Douglas – now 84 – survives. 

For 30 years, the Australian-born Morgan led a union that was synonymous in the public mind – not always fairly – with disruption to shipping, most notoriously on the Cook Strait ferries.  

As president of the Seamen’s Union, which became the Seafarers’ Union after a 1989 merger with the smaller but equally stroppy Cooks and Stewards Union, he was a newsworthy figure.

He was also, by trade union standards, an unusually flamboyant one, noted for his collection of stylish hats and colourful ties. Known in union circles as The Hat, he had a sense of style that set him apart in a line of work not normally associated with sartorial elegance. 

Asked about his celebrated collection of headwear, he once said his motive was purely pragmatic. “I would have thought it was pretty self-evident – I’m as bald as a badger.”

Public attitudes to the Seamen’s Union were summed up in a North and South article in 1990 by David McLoughlin, who wrote: “They’re widely seen as the mob which stops the Cook Strait ferries in the middle of seemingly every holiday … enormously powerful, featherbedded, working only half the year if they’re unlucky, overpaid, flown to their jobs from wherever in the country they choose to live”.

Dave "The Hat" Morgan and Seamen's Union colleagues occupying the Shipping Corporation's boardroom in Wellington in 1988.
ROSS GIBLIN/STUFF Dave “The Hat” Morgan and Seamen’s Union colleagues occupying the Shipping Corporation’s boardroom in Wellington in 1988.

It was certainly true that the two major maritime unions, the seamen and the watersiders, wielded unusual power in an economy almost wholly dependent on shipborne trade. That power was magnified by the seamen’s ability to shut down commerce between the North and South islands.

It was also true that the shipping industry had a history of harsh working conditions, anachronistic employment practices and combative relationships with shipping companies dating back to the 19th century. All this contributed to a tough and uncompromisingly militant union culture.  

Yet shipping employers who dealt with Morgan respected him as an honest negotiator and liked him personally. That was evident from heartfelt and moving tributes paid to him privately after his death from cancer.

He was easy to like: amiable and quietly spoken (although a stirring orator when the occasion required it), with a distinctive raspy voice and a bone-dry sense of humour. But you knew there was a steely core there somewhere. There had to be, to maintain control over a union whose fractious members could be just as challenging to deal with as the bosses.

In a newspaper story marking Morgan’s retirement 16 years ago, Pacifica Transport chief executive Rod Grout said Morgan would fight tooth and nail for his members, but added that “you knew where you stood with him”. And he gave Morgan much of the credit for promoting shipping industry reforms that helped end the disruption of Cook Strait ferry sailings.  

Morgan was admired internationally. Following his death, messages of sympathy flowed in from around the world – evidence of his involvement in causes such as the campaign against apartheid, and of his assistance to unionists in Third World countries where he would have clandestine meetings with local activists forced to live like fugitives under authoritarian regimes. 

Much of the disruption caused by the Seamen’s Union was political rather than industrial. Morgan was instrumental in initiating a long-standing trade ban against Chile after the 1973 military coup that overthrew the elected socialist leader Salvador Allende, and he was proud of the union’s role in opposing a visit to New Zealand by the nuclear-powered warship the USS Truxtun.

Seamen's Union members protesting at Port Taranaki in 1983. Strikes among maritime workers used to be common before the upheavals of the late 1980.
ARCHIVE Seamen’s Union members protesting at Port Taranaki in 1983. Strikes among maritime workers used to be common before the upheavals of the late 1980.

It was clear from Morgan’s funeral in Masterton’s Copthorne Solway Park Hotel that respect for him spanned ideological lines across the Left. Former Labour Party deputy leader and Cabinet minister Annette King, an old friend, flew from Canberra, where she is now New Zealand’s high commissioner, to deliver a eulogy. Justice Minister Andrew Little – himself a former union leader, though of a more moderate persuasion than Morgan – also attended.

The 260 mourners were treated to a verbal tour-de-force by the Australian unionist Paddy Crumlin, president of the International Transport Workers’ Federation, who delivered a spirited and often humorous 20-minute off-the-cuff oration, barely pausing for breath, on socialist values and the virtues of working-class solidarity.

Born in Adelaide, Morgan was one of three siblings in a Catholic family. He was taught by nuns of the Sacred Heart order, whom he recalled with some fondness, and later by the Marist Brothers, whose brutal discipline engendered less affection.

It was said at his funeral that he once considered entering the priesthood, but after going to sea at 16 as a deckhand on the BHP-owned Iron Monarch, Morgan discovered another belief system that resonated more powerfully with him. By the age of 18 he was a member of the Australian Communist Party. He remained a committed socialist until the end, although in later life he disavowed any party alignment. 

In a 1998 radio interview with Brian Edwards, Morgan recalled being radicalised during late-night debates in the ship’s mess-room. The Iron Monarch had a crew of 24, of whom five or six were communists. 

Morgan was captivated by the ideological dynamics of his working environment. Communism, he explained to Edwards, held out the hope of a better life. That was a widely held view among his union peers in the 1950s and 60s, and it persisted despite evidence of appalling repression under communist regimes.

Morgan told Edwards that, while he was no apologist for the denial of human rights, he refused to condemn communism because of mistakes or excesses by leaders such as Joseph Stalin.

Bill "Pincher" Martin, Morgan's predecssor at the Seamen's Union, in 1971.
THE DOMINION Bill “Pincher” Martin, Morgan’s predecssor at the Seamen’s Union, in 1971.

In 1963, by then an able seaman, Morgan moved to New Zealand to join the Union Steamship Company and promptly made the acquaintance of kindred spirit Pat Kelly, a feisty fellow Marxist, and his wife Cath. 

The Kellys’ son Max recalled at Morgan’s funeral that the two men met for the first time in the public bar of a Wellington hotel; he wasn’t sure whether it was the Terminus or the Post Office (both long gone). Between drinks, Pat Kelly would sell copies of the New Zealand Communist Party paper the People’s Voice.

The two became firm friends, confidantes and drinking mates, although Morgan, an enthusiastic boozer in his younger days, would renounce alcohol and cigarettes after a life-changing car accident at Paekākāriki in the early 1980s. 

The two men’s families also bonded closely, sharing holidays in the Kellys’ bach, an old Railways house, at Ohakune. Max Kelly recalled that the man the public knew as the leader of angry protest marches would play the clown at the Kelly children’s birthday parties. He was a mentor to Kelly’s sister Helen, who became president of the Council of Trade Unions before succumbing to cancer in 2016. 

After Pat Kelly’s death in 2004, Morgan placed an In Memoriam notice in The Dominion Post on his anniversary every year, in which he paid tribute to his former comrade and commented wryly on his deficiencies as a racing tipster. Both liked a punt on the horses.

In 1970, Morgan met Margaret “Maggie” Lee, a school dental nurse, while on an anti-Vietnam protest march in Auckland. By that time he had come ashore to take up an appointment as the union’s Lyttelton branch secretary. The two were married the following year and would later adopt a daughter, Jenny Katene. 

In the words of Annette King, Dave and Maggie Morgan made a formidable team, “fearless and committed”. For years they lived in a union-owned house in Austin St, Mt Victoria, which served as a social gathering place for the Left, and for which they paid $26 a week in rent – a fact exposed in 1989 by an angry chief Labour Court judge, Tom Goddard. 

In a withering judgment provoked by the union’s refusal to comply with an injunction ordering ferry crews back to work during an illegal strike, Goddard ordered sequestrators to seize the union’s assets – and for good measure, opened its finances to public scrutiny.

Goddard calculated that a true market rent for the Austin St house, which by accident or design was painted pink, would be at least $200 a week. But as McLoughlin pointed out in North and South, it was hardly a luxurious property – and this was long before Mt Victoria was gentrified. 

The family later moved to Masterton – ironically, almost as far from the sea as it’s possible to get in New Zealand – where Morgan lived a quiet life as the devoted patriarch of his whānau. 

He retired as national secretary of the union in 2003, three decades after stepping into shoes previously occupied by Bill “Pincher” Martin and, before Martin, the feared union strong man Fintan Patrick Walsh. In his last weeks, he joked that he wanted to be buried next to Walsh in Karori Cemetery, but with a taller headstone. 

Under Morgan’s leadership, the seamen were part of a hard core of Left-wing blue-collar unions – along with others representing meat workers, boilermakers, watersiders and truck drivers – that regarded themselves as upholding traditions of militancy, solidarity and class consciousness.

But with the economic upheavals of the 1980s, some old union alliances began to unravel. Morgan found himself at odds with his former friend and fellow communist Ken Douglas as the movement bitterly split over how best to maintain union strength and cohesion in the face of deregulation, globalisation, job losses and legislative changes that were seen as tilting the industrial playing field in favour of employers. 

By the time he retired, Morgan had observed not only a drastic decline in union power, but also the disintegration of the Soviet-led communist bloc from which he and many of his peers had drawn ideological inspiration.

But the socialist flame burned brightly to the end. His death notice finished with the union slogan “Solidarity Forever” – and at his funeral, mourners sang The Internationale, the anthem of the socialist Left. 

He left instructions for his ashes to be scattered at sea off Wellington Heads.

Sources: Stuff archives, Nga Taonga Sound and Vision, North and South, Maggie Morgan, Max Kelly, Annette King, Chris Eichbaum.

Stuff

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.

NZ to join international maritime convention to reduce ship emissions

Wednesday, 4 December, 2019 – 14:55

New Zealand will sign up to new international maritime regulations to reduce ship emissions and lift air quality around ports and harbours, Associate Transport Minister Julie Anne Genter announced today.

Subject to completion of the Parliamentary treaty examination process, New Zealand will sign up to Annex VI of MARPOL, an International Maritime convention for the prevention of pollution from ships.

“Joining this convention will improve the health and environmental impact of shipping emissions, particularly around our port communities.

“It will give Maritime NZ the power to inspect foreign ships for compliance with new emission standards and take enforcement action if necessary.

“Signing up will also ensure New Zealand has a seat at the table as new global greenhouse gas emission maritime regulations are negotiated over the next few years.

“The convention’s regulations limiting sulphur emissions from shipping are due to come into force on 1 January 2020. However, as the previous government did not initiate the process of signing up to this convention, there will be a longer lead in time before these regulations apply to domestic ships.

“The treaty examination process means that New Zealand would sign up to Annex VI in late 2021. Stricter limits on sulphur limits would then apply to domestic ships from early 2022. This gives our shipping and fishing industries sufficient time to prepare for the new regulations,” said Julie Anne Genter.

Background

The IMO convention, MARPOL Annex VI, regulates atmospheric emissions from ships. It will also be the platform for new IMO measures to reduce greenhouse gas emissions from ships, which are expected to be ready in 2023.

The most significant regulatory impact of Annex VI will be new sulphur limits on marine fuel. The current sulphur limit of 3.5% by mass for marine fuels will drop to 0.5% when new Annex VI regulations take effect globally on 1 January 2020. Compliance can be achieved by using low sulphur fuel or fitting an exhaust cleaning system known as a ‘scrubber’ to reduce emissions to a level equivalent to those from low sulphur fuel.

All ships ‘flagged’ to Annex VI party states visiting New Zealand will have to comply with the new regulations from that date. Similarly, New Zealand-flagged ships travelling to states that are party to Annex VI will also have to comply.

Almost 100 countries representing 97 percent of global freight capacity are already signatories to the convention. Subject to the parliamentary treaty examination process, and legislation changes necessary to implement the convention, New Zealand is expected to accede to Annex VI in late 2021. Ships operating only in domestic waters will have until early 2022 to comply, as Annex VI would come into force for New Zealand three months after accession.

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

Auckland Port move criticised in two reviews

Todd Niall 09:54, Nov 21 2019

Ports of Auckland would face a "managed closure" under the recommendations of the UNISCS working group
DAVID WHITEPorts of Auckland would face a “managed closure” under the recommendations of the UNISCS working group

An economic argument for moving Auckland’s port to Northland has been harshly criticised in two reviews by economic consultancies.

Both reviews say an economic analysis by Ernst and Young for a government-funded working group, failed to provide a credible basis for making a decision on the move.

The reviews released by Ports of Auckland, and a third briefing paper by its owner Auckland Council, are part of a push-back against the port-move proposal, which goes to cabinet next month.

New Zealand First MP, and Associate Transport Minister Shane Jones, who is championing the relocation case, said he was aware of differing views but considered the criticism “part of the consultancy gossip chain”.

One assessment, by consultants Castalia, said the true extra cost of relocating Auckland’s port, and building the necessary infrastructure, could be nearly four times EY’s estimate.

An expanded Northport at Marsden Point should replace Auckland's port operation according to a government-funded working party
NORTHPORT An expanded Northport at Marsden Point should replace Auckland’s port operation according to a government-funded working party

The other review by the New Zealand Institute of Economic Research (NZIER) said EY had “failed to address the feasibility question with sufficient transparency”.

The Upper North Island Supply Chain working group recommends the best future for the ports of Tauranga, Auckland and Marsden Point, is for Auckland to close, and its business re-locate to Northland.

An economic analysis by EY, accompanying the second of three reports by the group, supported the idea, and said there would be $2 of benefits for each $1 spent.

Cabinet will in December consider the group’s, third, final, and still-confidential report.

EY said the additional cost of the relocation, compared with costs that would still be incurred if the three major upper North Island ports, including Tauranga, continued on their present paths was $1.8 billion.

The analysis of EY’s work by infrastructure consultancy Castalia, put the additional cost far higher, at $6.7 billion.

“The first and the most obvious point to make is that the report entitled ‘Economic Analysis of Upper North Island Supply Chain (UNISC)‘ is nothing of the kind as it provides absolutely no information on how the supposed benefits are estimated, apart from some vague references to multi-factorial analysis,” said Castalia.

The cost of extra roading was undercooked, it found, and the development value to Auckland of clearing the port from the waterfront did not take into account the time and cost of finding new uses for the 77 hectares.

“Given important cost omissions and flawed logic, EY’s cost benefit analysis might fail to provide a credible basis for informing a decision – on the relocation,” the Castalia review concluded.

Consultancy NZIER assessed EY’s work using Treasury criteria, and listed 13 findings which it considered either “surprising” or “concerning”.

NZIER said when EY produced the “Port Future Study” for Auckland Council in 2016, Northland ranked only 12th on the list potential relocation sites.

“The same consultancy three years later moved Northport from the twelfth most preferred option, straight to number one, with no explanation,” said Laurence Kubiak, the chief executive.

Other findings NZIER considered “surprising” included the assumption by EY that 70 per cent of the freight between Northland and Auckland would be by rail, when rail currently had 5.6 per cent of the freight market.

Kubiak said the benefit side of the equation done by EY was “a bit amorphous”.

“The benefits set out in the (EY) report hinge on the potential value uplift in land used by Ports of Auckland – but it doesn’t address the dis-benefits and risks of massively extended logistics and supply chains of moving the port to Northport,” said NZIER’s review.

NZIER said a freight hub proposed in northwest Auckland had not been costed, and EY’s $1 billion estimate to build a rail line from Avondale to Southdown, compared with previously-published costings elsewhere, of $2.5b to $3.5 billion. 

Ernst and Young was approached for comment but declined.

New Zealand First had campaigned on moving Auckland’s port prior to the 2017 general election, and under the coalition agreement with Labour, secured the commissioning of a report on the feasibility of the idea.

“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,” the Prime Minister Jacinda Ardern, told Stuff in October.

The trucking industry organisation, The Road Transport Forum said the two reviews “blow the cost-benefit ratio touted by supporters of the port move out of the water,” and that the relocation made little economic or logistic sense.

“With the billions of dollars that will be required to build the appropriate road between Auckland city and Northport, we are concerned no money would be left to spend on the rest of New Zealand’s road network, which is in immediate need of investment,” said Nick Leggett, the chief executive.

“Ports of Auckland is a critical piece of New Zealand’s infrastructure and before any moves are made, it is essential to look at all the evidence and for decisions to be based on facts, not politics and empty promises to the people of Northland,” he said.

Stuff