Herald calls for sale of Ports of Auckland

July 6th, 2016 at 12:00 pm by David Farrar

The Herald editorial:

The second reality that needs to be recognised by all concerned is that New Zealand does not need another port. The country already has too many.

If ports were run by the Government rather than local bodies, they would have been rationalised long ago. If port companies were answerable to private shareholders, the same thing would have happened, probably more efficiently than by government design. If Ports of Auckland was on the sharemarket, it would not be still enraging Aucklanders with these bids for more of the harbour. Its shareholders would have found it more worthwhile to co-operate with their nearest competitor, the Port of Tauranga.

Ports such as Tauranga are on the sharemarket and Tauranga has bought into Northport at Marsden Pt. With co-operation between Auckland, Tauranga and Northport, the need to ship goods into and out of this part of the country could surely be accommodated without further encroachment on the Waitemata – or dredging a $5 billion “super port” on the Manukau or the Firth. No such nonsense would be contemplated if the Auckland Council floated even part of its needlessly owned port. The city needs a council with the courage to do so.

The Council owning the Port has meant it is less responsive to the public.

Auckland port locations

July 4th, 2016 at 9:00 am by David Farrar

The Herald reports:

Shippers have given the thumbs down to one finding from the Port Future Study – that Auckland’s next major port could be sited in the Manukau Harbour.

The study, officially due out today, said Auckland’s next new “super port” could be moved to the Manukau Harbour or the Firth of Thames at a cost of $4 billion to $5.5 billion.

New Zealand Shipping Federation executive director Annabel Young, who is a member of the Consensus Working Group launched by Mayor Len Brown a year ago to reconsider Ports of Auckland’s place on the city waterfront, said shippers do not favour a west coast port alternative.

Young said the working group included a diverse range of people but they had reached an agreement.

“And the agreement that we reached did not assume that the port would have to move, but if it does need to move it needs somewhere to go to, and we need to start thinking about that now,” she said.

The Firth of Thames was originally considered as the site of New Zealand’s only oil refinery, which ended up being built at Marsden Point, near Whangarei.

Young said it was no secret that shippers favoured a port on the east coast – where most of New Zealand’s ports are located – because of the generally wilder weather and sea conditions on the opposite coast.

“The east coast is always going to beat out a west coast site,” Young said. Manukau has scored well because of its proximity to road and rail. “That said, it’s not a great site for a port,” she said.

So no ideal location but with a capacity limit at the current location, a decision will need to be made eventually.

More support for Port move

May 19th, 2016 at 11:00 am by David Farrar

The Herald reports:

The Ports of Auckland must be moved for the growth and prosperity of the city, say three mayoral candidates.

Their comments came after a survey of 328 small business representatives by MYOB revealed 39 per cent would vote for a mayoral candidate who proposed to move the port.

The survey also found 31 per cent opposed a move while 32 per cent said it would not affect their vote.

During a mayoral debate yesterday on Newstalk ZB, Phil Goff, John Palino and Victoria Crone said moving the port was important.

Good to have three candidates in favour. What matters though is how explicit they’ll be in taking steps to make it happen. Platitudes are easy, policy is harder.

Speaking to Leighton Smith, Mr Goff said the port would reach capacity for bulk cargo probably within the next three to 10 years and for container traffic within the next 24 to 40.

“At a certain point Auckland port will not be able to take any further traffic and I am not in favour of the port expanding into the harbour.

“The second reason is that there is 75ha of prime central business district land there that I think would produce a better return than a port.”

He said moving the port would also reduce congestion on Auckland’s motorways.

Great, so what is your plan? Where would the money come from to pay for a move?

Victoria Crone said the port couldn’t grow with the city and was therefore obsolete.

“We have moved on and our economy is no longer driven by [the port]. It is an important part of it but it is not the main driver.”

She said it was important to take a 50 to 100-year view of the port, which would enable people to see the port would not have the capacity to serve the city.

“Our focus has to be on how do we move it, how do we move it cost-effectively, how do we keep the business communities in Auckland as little affected as possible when we go through the move and then we have an incredible piece of land with significant infrastructure opportunity that we can then open up to all of Auckland.”

Ms Crone suggested the land could then be used for “a combination of economic and social living, vibrant night life, we need a ferry terminal, people have said we need a stadium, we could look at a Sydney opera house”.

Would be amazing to have that land available for other use.

John Palino argued the business part of the port should be sold.

“If we sell the business part of the port, the value in the port is really the real estate … so we could look at Tauranga and Whangarei and possibly create a deal with them where we sell them the port or we sell someone else the port.

“We [then] give them the ability to run that port for up to 10 years but the deal would be that in 10 years the port has to be removed.”

A specific idea as to how it could be done.

Crone says move the port

May 8th, 2016 at 10:00 am by David Farrar

The Herald reports:

Auckland mayoral candidate Vic Crone is promising to look at relocating the city’s port, saying its current downtown location is obsolete.

The port, she says, will be unable to keep up with the growth of Auckland in the next 50 years unless is expands further into the harbour.

“The community has spoken loudly and clearly,” Ms Crone said in a speech to the Committee for Auckland today.

“As mayor I will commit to leading a robust decision-making process to seek out a new home and transition our port there.”

A Future Port Study set up after last year’s public furore over wharf extensions into the harbour by Ports of Auckland is currently underway to look at the economic, social and environmental impacts of the port on the wider city.

The study has short-listed the Manukau Harbour, Firth of Thames and Muriwai as possible options for a new port.

Ms Crone said ports were a critical piece of infrastructure for any major city, but questioned the economic value of its 77ha footprint and its dividends with the economic return of similar land in the Viaduct Harbour and Wynyard Quarter.

Arguably the most expensive and valuable land in Auckland is being used as a huge car park. It’s madness. The short terms costs of moving are considerable, but the long-term costs of not moving are greater.

“By 2040 the Wynyard Quarter waterfront redevelopment is expected to contribute $4.3 billion to Auckland. The Auckland port dividend of around $50 million pales in comparison,” Ms Crone said.

Once a new home was found for the port, she said, the city could turn its mind to the exciting possibilities of transforming the largest piece of land on the waterfront, not just economically but socially.

Ms Crone’s port policy is similar to her main political rival, Labour MP Phil Goff, who opposes further expansion into the Waitemata Harbour for port use.

Goff has said he does not support expansion but has not said he supports moving it.

On mayoral politics, there is also a good interview with Mark Thomas on The Spinoff.

Guest Post: Vic Crone: A waterfront stadium for Auckland?

March 21st, 2016 at 9:00 am by David Farrar

A guest post by Victoria Crone:


The waterfront stadium topic is back again and I wanted to share some key points of this with you:

My key priorities as Mayor of Auckland will be to keep your rates as low as possible, get Council back to basics and delivering core services well, and to address our significant transport and housing issues. Given Eden Park received around $300 million of development for the 2011 Rugby World Cup, and the Warriors are contracted to Mt Smart Stadium to 2028, the development of a waterfront stadium is simply not a priority right now. 

We need to get this Council delivering good, value for money services to Aucklanders and ensuring on-time, on-budget management of billions of dollars worth of infrastructure investments throughout the region. We still have neighbourhoods such as Rodney and Franklin without footpaths and communities facing further postponements of key local assets. 

Take a look at the Super City Council, it has 11,500 staff, (and those staff costs blew out by $63 million last year), it needs to service 1.5 million residents, with 750,000 more people on the way in the next 30 years. Then there’s an $18.5 billion infrastructure programme over the next 20 years that in too many instances is not funded properly, our housing supply isn’t where it needs to be and traffic congestion has been getting worse. We have a lot of work to get through and we can’t afford to get these crucial services wrong. Most recently the $1.2 billion IT blowout demonstrated a complete failure not just by Council staff accountable but the governors of Auckland. We face significant challenges and I will be channeling my strong business and governance expertise to address the key priorities immediately.

In saying that, Auckland does need fresh thinking to grow a vibrant, world leading city. Our waterfront has great potential that’s why I agree it needs serious attention. My view is that rather than starting with “what can we build here”, (which is an exciting conversation to have), we have to start by looking at what we’ve already got. We have a Port with rapidly growing activities constrained by limited space, and part of this prime land is still a car park. The Port is the biggest occupier of our waterfront. With its projected growth over the next 20-30 years we must consider relocating it as it simply cannot go out into the harbour. We should ultimately return the waterfront to the people of Auckland. This is the long-term strategic leadership that our city needs.

Moving a port is a big task, it demands substantive scoping and due diligence. Other cities around the world, such as Sydney and Seattle, have undertaken port relocations to accommodate growth. It also puts us in a better position to then have that exciting and robust conversation about what the waterfront with more available land could be used for. I’m open-minded about a stadium being part of that conversation amongst the many other things that could be included in our vibrant waterfront development. However, all sporting codes would need to be involved in the discussion and the proposal would have to bear no extra costs to ratepayers. 

As Mayor I will ensure that Auckland reaches its potential by providing strong leadership, fresh thinking and delivering real results.

Vic Crone is a candidate for Mayor of Auckland. Vic has over 20 years’ business experience at the forefront of the IT and communications sectors with Chorus, Telecom (now Spark), and most recently as Managing Director of Xero NZ.

Ralston says keep port land but sell 49% of port

March 11th, 2016 at 11:00 am by David Farrar

Stuff reports:

Former journalist Bill Ralston says he would push for selling a 49 per cent share of Auckland’s port company if elected to the city’s council.

Ralston officially launched his campaign on Tuesday to become the next councillor for the central ward of Waitemata, a seat currently held by veteran local body politician Mike Lee.

Selling a stake in Ports of Auckland (POAL) would net the council $1 billion in badly needed profit, Ralston said.

It could be done by spitting POAL into two parts – the land, which would remain 100 per cent owned by Aucklanders, and the operating company of the port.

“That can become a mixed ownership model with 49 per cent owned by shareholders,” he said.

“There is an ideological majority on that council that say, ‘you can’t sell assets’. They’re trapped in their own closed minds by their old redundant ideology.”

There is absolutely no reason the Council needs to own 100% of the port. Port of Tauranga is a great example of a port that has done far far better with a mixed ownership model than ports 100% owned by a Council.

It would also mean you free up capital to invest in other infrastructure, without massive hikes in rates.

“We need to keep an open mind as to how we fund our infrastructure needs, not just borrow more and tax the ratepayer,” he said.

“The current councillor for Waitemata poured fire and brimstone on the mayor and council over (last year’s) 10 per cent rates increase, and then promptly voted for it.

“Tricky, cynical footwork that I hope the voters of Waitemata and Gulf will remember,” he said.

They will be reminded!

Mapp asks who will move the Ports of Auckland

October 30th, 2015 at 4:00 pm by David Farrar

Wayne Mapp blogs at Pundit:

On a recent Sunday I was at dinner in the restaurant in the old Seafarers’ building on Quay St, Auckland. Through big picture windows we looked out over the Waitemata harbour on a beautiful spring day. We could see the boats on the water, the houses sprinkled around the North Shore… but the entire foreground was dominated by hundreds of cars parked on Marsden Wharf, flanked by massive container cranes.

What a waste of one of the great harbours of the world.


At the moment the entrance to our harbour is a massive container terminal, hardly what one expects of a world class city. Other cities including Sydney, London, and San Francisco have all shifted their major container port activity out of the city centre. Such a shift will still mean that cruise ships will continue to use the downtown terminals. And it will be easier to expand the ferry terminal. It is already reaching capacity at peak times.

We could do the same as these other cities, and we don’t need to wait 30 years to do so. It could be done in the next five to ten years, provided the city leaders had the ambition and gumption to do so.

A Mayoral candidate who campaigned on moving the Ports of Auckland could do very well.

There are 61 hectares in the Bledisloe Fergusson port precinct. It has a 2014 valuation of $365 million, which is $6 million per hectare. There are market valuations closer to $1.5 billion, based on the uses that the land could be put to as the prime entrance to the city.

Could be even more than that.

Imagine a waterfront with some spectacular commercial buildings, a stadium located at the back of the precinct to tie in with the Vector Arena, and some of the most desirable residential real estate in New Zealand. And perhaps something unique to showcase Auckland right at the entrance to Waitemata harbour.

Would be stunning.

Of course a new container terminal will be required, and they don’t come cheap; maybe $4-5 billion.

Both Tauranga and Marsden Port are too far away. A sea city like Auckland, growing to as many as 3 million people by 2050, needs its own port. There are realistic alternatives. Manukau Harbour, if the issues of the bar can be dealt with, or the Firth of Thames perhaps near Orere Point are options. There has to be enough land for expansion, and motorway and rail connections are required.

How do we pay the $5 billion that will be required? Well, nearly 30% would come from the sale of land at the existing container terminal. No doubt quite a lot of the existing infrastructure, cranes, etc. can be disassembled and shifted.

Does the City Council have to stump up with the additional $3 billion? The answer is no.

Just as other New Zealand ports have private capital, so can the new Port of Auckland. Some of the capital can be raised locally, there could an international shareholder with expertise in ports, and some of the funds can be borrowed.

Would be a great campaign platform for a Mayor and council ticket.

I’d also like to see this happen in Wellington. Move the port to Seaview, which is already an industrial zone, and free up the prime waterfront for entertainment, recreation and accommodation.

A big loss for Ports of Auckland

June 20th, 2015 at 7:00 am by David Farrar

The Herald reports:

Urban Auckland has won a court case challenging the lawfulness of the resource consents for two wharf extensions at Ports of Auckland.

Justice Geoffrey Venning has issued a decision today saying the consents issued on a non-notified business are set aside.

The judge said the decision to proceed without notification was flawed for two reasons.

He said the multiple consents should have been bundled “which would have required notification, as the most restrictive activity was a discretionary activity”.

Alternatively, the judge said, a “special circumstances” clause existed which required notification in this case.

“The Commissioners fell into error in determining that because the extension was a controlled activity and an expected development no special circumstances existed so that it was unnecessary to notify in any event,” Justice Venning said.

This means that the consent for any extensions has to go through a public notification process. I’m confident in predicting the chances of getting the consents are now very close to zero.

The value of port land

May 3rd, 2015 at 2:00 pm by David Farrar

The Herald reports:

Ports of Auckland is sitting on land with a commercial value of $2.2 billion, far greater than its $76 million value for port use, says an economist.

What’s more, the value of the land will rise to $3 billion in 10 years, says freelance economist Dr Aaron Schiff.

His figures are based on converting half of 61.6ha of port land, excluding wharves, for private use, with the remainder becoming public space. Dr Schiff has challenged Ports of Auckland’s economic information in a paper written for the Committee for Auckland, an independent organisation of business leaders.

I think there is a huge opportunity cost of having prime waterfront land used as storage for logs and cars. The locations of ports made sense in the 1950s,but makes no sense in the 21st century when waterfront land is the most expensive and desirable you can get.

Imagine in Wellington if the port was primarily at Seaview – an industrial area already. The current port land could host apartment blocks for thousands of people, cafes, restaurants, shops and a huge park for walking, running and cycling. We already have a great city, but an extended waterfront which extended all the way to the Hutt Road, around the stadium would be superb.

Stop Stealing Auckland Harbour

March 14th, 2015 at 4:00 pm by David Farrar

A release of interest for some:

A new protest group of Aucklanders has joined the outcry against Ports of Auckland’s planned extensions to Bledisloe Wharf.

Under the call to action of Stop Stealing Our Harbour, the group is calling for a halt to any further work on the port expansion until Auckland Council honours its promise to fully scrutinise the Ports’ plans.

The group says the port company is incrementally expanding in to the harbour – and its actions are being sanctioned by Ports owner Auckland Council.

Stop Stealing Our Harbour spokesperson Michael Goldwater says Ports of Auckland starts work in April on extending Bledisloe Wharf by nearly 100m in to the Waitemata Harbour.

“Aucklanders have recently paid $40 million to Ports of Auckland to create the harbour gateway to our city on Queens Wharf. The Bledisloe Wharf extensions will completely block the view from Queens Wharf to the outer harbour, one of the most significant views on our waterfront.   

“The extensions will also unnecessarily narrow an increasingly congested harbour. The Waitemata Harbour is Auckland’s greatest asset, one we hold in trust for future generations. Through the actions of the Ports of Auckland and Auckland Council it is now under further threat,” Mr Goldwater says.

The group says resource consents for the extension were issued in late December 2014 without any consultation, notification or knowledge of the wider Auckland community and other stakeholders. …

Aucklanders are being urged to join the campaign on www.facebook.com/stopstealingourharbour for further developments. …

The advocacy group comprises representatives of boating, political, business, and professional organisations as well as lawyers and architects.

I’m against the Port expanding from their current space.


Tindall says halt port expansion

February 26th, 2015 at 2:00 pm by David Farrar

The Herald reports:

Auckland business leader Sir Stephen Tindall is making a last-gasp plea to Auckland Mayor Len Brown and councillors to halt further reclamation of the Waitemata Harbour for port use until a full study of the economic, social and environmental impacts is complete.

In an open letter to Mr Brown and councillors this morning, Sir Stephen is calling on the politicians to use all their powers to stop two large wharf extensions into the harbour at the end of Bledisloe Wharf.

I’m against extending it further into the harbour. In fact I think long-term it should be moved – I don’t care where to, just out of the CBD and prime waterfront space. There are far far better things you can do on a CBD waterfront than store cars and logs.

Chalkie on Ports of Auckland

February 16th, 2015 at 7:00 am by David Farrar

Chalkie writes at Stuff:

Last year, Auckland Council spent $82 million on consultancy and professional advice.


This may sound extravagant but Chalkie reckons we should adjust our thinking. Expensive consultancy is surely a sign of civilisation and the democratic process, whereas absolute power means never having to justify your actions with an independent report.

After all, did Vladimir Putin hire an accountancy firm to consider the costs and benefits of invading eastern Ukraine?

True, but there is a happy mid point!

The NZIER report concludes, as have other studies, that Auckland’s port will run into capacity constraints as the economy grows and ships get bigger.

“Ultimately POAL will either lose business or need more land, structures or berth-capacity to allow for the future demand,” the NZIER says.

The predicted timescale is 20 years, but the issue is really the same whether it’s 10 years or 25 years – how big should the port be?

Chalkie reckons the port is Auckland’s commercial heart and its bustling presence is a constant reminder of what makes the city tick, but as a regular harbour-goer he has recently been struck by the huge sprawl of Fergusson’s extended terminal at the port’s eastern end, which looms a lot closer to the North Shore than it used to.

Would a further 5.3-hectares less water be oppressive? It’s hard to say. More than 230ha of harbour has been filled in since the mid-19th century, covering well over a third of the original waterscape.

I think the long-term solution in both Auckland and Wellington is to move the ports from the current prime locations on the waterfront. This land is too valuable to be used for containers and logs. It could be used for amazing cafes, bars, accomodation, parks etc. The waterfront is now the crown jewel in a city. It wasn’t 100 years ago, but times have changed and long-term the ports should be in places like Manukau and Petone – industrial areas. Yes it will cost a lot to move them, but it would be w worthwhile long-term investment for better cities.

Maritime Union slowly losing

December 16th, 2013 at 11:00 am by David Farrar

NBR reports that the Maritime Union is slowly losing its death grip on the Ports of Auckland.

In April last year, after eight months of bitter industrial action, the parties applied to the Employment Relations Authority for “facilitation.”

Instead of engaging in banter through the media, they were required to sit down and logically explain their arguments in a structured way and in legal terms.

Away from the previous dramatic and underhanded tactics, the port was able to state its need to lift productivity to compete commercially so it could lift returns to its ultimate owner, Auckland Council, which demanded it lifts returns on its investment.

The union, meanwhile, relied on health and safety concerns over the rosters.

It’s clear Ports of Auckland won that battle.

Although ERA head Alastair Dumbleton’s recommendations to the parties were confidential, the port company said it would immediately accept them.

The union, meanwhile, issued a statement saying they were “a useful basis to enter into what it hopes will be a successful round of negotiations.”

Without saying which way he was leaning, Mr Dumbleton had previously said he found “instructive” a report by the ERA’s fatigue-related risk expert, Associate Professor Sally Ferguson.

Earlier this week, union national president Garry Parsloe said, somewhat bitterly, that facilitation was a “whole wasted year.”

What this means is that experts found their claims to be scare-mongering and without merit.

Since negotiations for a new collective agreement started in August 2011, has the union lost members?

And have some of those jumped ship to PortPro, the rival union at Ports of Auckland?

Alongside his comments about facilitation, Mr Parsloe says the dispute has cost his union more than $1 million – a figure which is yet to be publicly verified because the union is yet to file its 2012 and 2013 accounts.

They should be deregistered for not filing. If you are a company and do not file your annual return by the due date, then after a certain grace period you are automatically deregistered. The same rules should apply for incorporated societies and unions.

Yet, what does the union have to show for this costly battle? And will the union’s new collective agreement be materially different from what was offered in September 2011?

We’ll have to wait and see on that last point, but it looks as if the union’s line about flexible rosters being a health and safety risk is losing steam and the body itself seems weakened and fractured.

Mr Parsloe is retiring and PortPro is taking on his union’s former members.

In May, the union confirmed some of its members are working under the new, 12-hour flexible rosters, despite its apparent concerns over health and safety.

As previously stated, some of its members have been sacked, and those dismissals have been endorsed by the Employment Court as proper.

And those sacked have been union officials – not because they are union officials, but because their behaviour was so bad they were justifiably dismissed.

With the port company abandoning its unpopular stance on contracting out, it is unlikely the flags and banners will be waved again, in huge numbers, any time soon.

The port is taking on more staff, lending credence to arguments that a more efficient port is positive for workers, the port company and, through its council ownership, all of Auckland.

Look at Port of Tauranga, where most of the staff are shareholders. Productivity is high and industrial action very rare.

Auckland Ports threatening to sue their owner

November 21st, 2013 at 2:00 pm by David Farrar

The Herald reports:

Ports of Auckland has hired top lawyer Mai Chen to help it in a row with the Auckland Council over measures to reclaim more of the Waitemata Harbour.

Ports chief executive Tony Gibson and Ms Chen met Mayor Len Brown in September to try to avoid starting legal action against their owner. Another meeting is set for today.

After councillors agreed in August to make further reclamation of the harbour a “non-complying” activity in the draft Unitary Plan, Ms Chen told the mayor’s office the move wasillegal.

She said it breached the Resource Management Act and the New Zealand Coastal Policy Statement, which sets out councils’ planning requirements for the efficient and safe operation of ports.

Ms Chen said the ports company would contest the legality of the resolution in a submission on the draft plan unless the council amended the resolution.

A CCO threatening to sue the Council that owns it, is not a good look. I’d be very nervous if I was a company director in that situation.

Auckland port expansion shelved

August 10th, 2013 at 1:00 pm by David Farrar

The Herald reports:

Auckland Mayor Len Brown has shelved the latest plans to expand Waitemata Harbour for port business until the consequences for the rest of the city are known.

Last night, Mr Brown said the city needed to have a conversation about the future of Auckland’s port based on proper analysis.

“Before we make any decisions about whether the port expands or otherwise, we need an informed discussion with Aucklanders, underpinned by a robust study that includes consideration of economic, social and environmental factors.”

Details of the study, which is not likely to start until next year, are expected to be made by Mr Brown in the coming weeks.

Mr Brown’s statement follows a series on port expansion by the Herald this week and a fresh campaign by the Heart of the City lobby group to have a rethink and not rush Ports of Auckland’s latest expansionary plans into the Unitary Plan.

This is a good thing. I am far from convinced that port expansion is appropriate on its current location. I’d like to see a fully independent (ie not paid for by POAL) appraisal of options for future locations so they can be considered.

A port at Wiri?

June 2nd, 2013 at 10:00 am by David Farrar

Stuff reports:

As the Ports of Auckland seeks public feedback on its controversial container port expansion plans, an alternative proposal has emerged for a site on the other side of Auckland.

The promoters of a container port on the Manukau Harbour in the South Auckland area of Wiri claim several potential advantages to the Ports of Auckland (POAL) reclamation in the Waitemata Harbour. These include less pressure on Auckland’s transport infrastructure, significant sea-transport savings of around $150,000 a voyage and estimated savings on container movement costs of $70 a TEU (twenty-foot equivalent units – the standard container size).

The promoters of the alternative port – ports and shipping consultant Mark Oxley, former P&O NZ chief executive Mick Payze and former Maritime New Zealand chief executive Russell Kilvington – have conducted preliminary investigations over the past couple of years but are seeking a backer to fund the estimated $250,000 to take the proposal to the next step of a full feasibility and economic study.

Waterfronts historically have been industrial and commercial areas. But as CBDs have become places where people live and play, they are far better suited for hospitality, retail and open park areas.

So I’m all for moving ports away from CBDs to industrial areas like Manukau Harbour. Of course this should only happen if it can make economic sense. But ports need to grow, as the economy grows, and they won’t be able to do so in locations where they are competing with the public.

Waitemata Harbour

April 18th, 2013 at 4:00 pm by David Farrar

The Herald editorial:

Council should give clear message to port company The Auckland port company is proving very slow to get a simple message: the Waitemata is not to be narrowed. The harbour is still wide enough between the wharves and Devonport to retain its visual splendour but it is not so wide that it can continue to accommodate wharf extensions without losing much  its expansive character.

If the city is not very careful it could discover, too late, that yet another incremental reclamation (one is already underway) has reduced the harbour entrance to a shipping channel and Auckland, quite suddenly, is less scenic.

How hard can it be for the port company to understand this? Having failed to get extended reclamations written into the Auckland Council’s 30-year plan last year, the company has come back this year trying to get a smaller extension written into the council’s 10-year unitary plan.

But really the council is to blame. Instead of giving its wholly owned company a clear message the first time around that no further encroachment on the Waitemata can be contemplated, the council prevaricated. It promised to review a range of development options for the port.

I feel sorry for the current Ports of Auckland management. It is not their fault they have inherited the Port on the location it is in. But my view is that their current location is an awful place for a commercial port, as is Wellington’s Centreport location. The power of the status quo may mean that it is never economic to move them, but the reality is that trying to expand on their current locations is just a very bad idea.

Auckland’s port serves the country’s largest population centre. It is hardly going to disappear if its wharves are not long enough for the next generation of cargo ships. If those ships went instead to Marsden Pt or Tauranga fewer containers would be hauled into the city. But if Ports of Auckland wants to accommodate bigger ships it must find room within its present area. The council should say so.

I agree.

Gaynor on how mixed ownership can be a win-win

March 30th, 2013 at 2:00 pm by David Farrar

An excellent column by Brian Gaynor:

The writer expressed his strong opposition in the following way: “The [asset sales] represent asset stripping. They are publicly owned by everyone, including poor people. The dividends they produce will no longer be returned to the population as a whole but to a small, wealthy minority. There is no innovation or expansion, just a continuation of the rich getting richer, and the poor poorer”.

Gaynor first points out:

The first point is that the sale of 49 per cent of MRP to 300,000-plus New Zealanders is not asset stripping as none of the company’s assets will be sold for the benefit of the Crown or the new minority shareholders.

And in fact a mixed ownership model will allow the former SOEs to acquire more asset and expand, if they so wish.

The second point is that the Government will continue to receive 51 per cent of MRP’s dividends and the payout should increase in the years ahead.

Port of Tauranga is a good example of this.

The Mount Maunganui company listed on the NZX in March 1992 after the public acquired a 44.7 per cent shareholding. The Bay of Plenty Regional Council owned the remaining 55.3 per cent.

Port of Tauranga paid a total dividend of only $2.2 million in the year before its NZX listing and the Regional Council’s shareholding was worth just $44 million at the $1.05 a share IPO price.

Twenty years later the Bay of Plenty Regional Council’s economic interest in the port company has increased as follows:

The council’s shareholding has declined from 55.3 per cent to 54.9 per cent but the value of its holding has soared from $44 million to $1.015 billion.

The council now receives an annual dividend of $34.6 million from the port company compared with just $2.2 million when it owned 100 per cent.

This is the model that the unions and their allies have tried to destroy.

Everyone is a winner – the Bay of Plenty Regional Council and its ratepayers, Port of Tauranga’s minority shareholders and the company itself.

It is totally inappropriate to look at partial privatisation as a zero sum game, a game where there must be a loser for every winner. Partial privatisation can lead to a substantial increase in value and income for a regional council, or the government, if the listed company is well governed and managed.

Absolutely. There can be no argument that privately owned and managed companies do better overall than wholly owned public ones. By this I do not mean no private companies fail and no public companies succeed. Of course not. But if you look at decades of economic data across OECD countries, the difference is stark.

And Gaynor gives a local example:

In the following 12 years, before the company was taken over by its majority shareholder, the Auckland Regional Council’s economic interest increased as follows:

The council’s shareholding remained at 80 per cent but the value of its holding soared from $318 million to $678 million at the $8 a share takeover price

The council’s annual dividend from the port company jumped from $8.5 million to $34.3 million.

The company’s performance has been poor since it was fully acquired by the Regional Council, now Auckland City, in 2005.

Auckland City’s annual dividend has fallen from $34.3 million in 2005, when it owned 80 per cent of the company, to $20.1 million in the June 2012 year, even though it now has 100 per cent ownership.

When a company is 100% owned by the Government (or a Council), it will make sub-optimal decisions due to influence of the shareholder.

If they are listed on the NZX they have a legal duty to treat all shareholders equally and do what is best for the company as a whole. If the major shareholder wishes to influence their decisions they have to do so transparently through public shareholder resolutions.

Ports of Auckland location

November 30th, 2012 at 11:00 am by David Farrar

Bernard Orsman at NZ Herald writes:

Auckland has a choice if it wants to open up more of its waterfront – let the port expand into the Waitemata Harbour or lose cargo to Tauranga and Northland.

An independent study on freight demands of the three North Island ports shows Auckland cannot open up Captain Cook and Marsden wharves to the public without having to fill in more of the harbour or limit the amount of cargo it handles.

That would lead to the economic benefits from Ports of Auckland going to Port of Tauranga and Northport.

I think the long-term future is to move the Ports of Auckland to another location. It is silly to have prime beautiful waterfront land taken up by a commercial port. The same goes for Wellington.

Even with “very significant operational efficiencies”, the study said, Ports of Auckland would still need extra berth and storage space by 2041 to cater for growth.

And the public won’t wear a growth in area in its current site, so a new location is the only way to expand.

Councillors being threatened over POAL

March 30th, 2012 at 9:07 am by David Farrar

NZ Herald reports:

Two Auckland Council members are complaining of threatening phone calls from a man trying to make them support a no-confidence vote against the Ports of Auckland management.

No vote was put to a council meeting yesterday, but Sir John Walker and Calum Penrose are angry about the calls, from veteran protester Marx Jones.

Somehow I think the name is very appropriate.

Sir John said a threat was made to him through his wife, who was told “they were going to take me to court, they were going to get at me because of the way I’d been voting”.

He said that was rubbish as he was away when a vote was last held on the port dispute, and he did not like his wife being threatened.

Mr Penrose said he was threatened after telling a caller on Tuesday that he would “definitely” not support a motion against the council-owned port company.

“He [the caller] said, ‘We are going to sue you individually, as councillors, and then we are going to have you sacked. And then we are going to get you’.”

Just more intimidation.

The Boards are not demanding anything

March 24th, 2012 at 12:00 pm by David Farrar

Sigh – another sloppy story.

The Herald reports a NewstalkZb story:

Auckland’s Local Boards are demanding action on the ports dispute.

More than 30 members have told the Council it’s time to stop sitting on its hands, and step in.

Board member Michael Wood says the port’s management and board are out of control, and exposing the city’s economy to an enormous risk.

The Boards have not demanded anything. 30 assorted board members (most of whom will be union backed Labour Party candidates or activists like Michael Wood) have demanded something.

There are a total of 148 local board members, so this Labour Party grouping represents around 20% only.

Holmes on POAL dispute

March 18th, 2012 at 11:04 am by David Farrar

Paul Holmes writes in NZ Herald:

 I formed the view that the ports company have not been ungenerous in their offers to the union. In fact, even Auckland Mayor Len Brown himself agreed that the company’s first offer made early last September should have been accepted.

The offer would have rolled over the collective agreement and given the workers a 2.5 per cent pay increase each year for three years. There were several offers but early on the company decided it could no longer tolerate its workers getting paid for sitting around doing nothing.

I do not believe the union when it says that it’s a lie that the workers earn in excess of $90,000 for an average 26 hours work. Ports of Auckland had Ernst and Young audit the figures. And that’s something you notice about the ports’ conduct throughout the dispute. They’ve done things very thoroughly.

The union’s argument that its people ceasing to be permanent staff would mean that their families couldn’t plan things was obliterated by the company’s offer to roster the men for 160 hours a month, and the roster delivered a month ahead. For the life of me, I can’t see what’s wrong with that.

I think the union was dyed in the wool. I think they didn’t read the signs. Before they knew it, it was all over. Nearly 300 men were made redundant, just like that. End of story. I think there were some hardliners who’ve buggered things up for everyone. Hysteria is never a good thing.

MUNZ turned down a sgnificant pay rise and a guarantee of 160 hours a month, with rosters known a month in advance. By turning it down, their name is now going to stand for More Unemployed New Zealanders.

Meet the MUNZers

March 15th, 2012 at 11:00 am by David Farrar

Conor O’Brien at NBR reports:

Half of the Maritime Union’s bargaining team were disciplined and two were sacked during collective agreement negotiations with Ports of Auckland (PoAL),NBR Online can reveal.

PoAL’s organisational strategist Rod Lingard says a series of disciplinary actions made the union look like a “biker gang” rather than a responsible union in the modern era.

“Of the eight people in the union’s bargaining team we have had to discipline four of them,” Mr Lingard says.

Now what were they disciplined for? Was it just because they were union delegates?

Mr McKean was sacked on September 20 for publishing a racist and sexist piece in the union’s national magazine.

We have profiled Mr McKean’s work before.

Mr Harrison was sacked on January 24 after an investigation concluded he made violent threats against a non-union employee and his family, calling the employee a “f**king piece of s**t”.


Mr Findlay was given his final warning after he took a letter from under his manager’s locked door using a ruler.

Oh, a thief.

Another PoAL employee Andrew Angus, a former member of the union’s executive, was dismissed after writing the following job application and posting it anonymously under an administrator’s door. 

Kia ora bro,

I wish to make application for the the position of ship Leading Hand. I feel too intellegant to drive straddles all my life. If it helps I can do a month or two on the sunbed- My great grandfather was one of the priests for the Island of Tualvau and he taught them bannans grown on trees. 

Yours the Best Billy.T. James

Mr Angus was reinstated while his case was heard by the Employment Relations Authority but was sacked a second time after he was caught on camera throwing a twist-lock under a straddle crane. Twist-locks are used to secure containers together on board ships and can cause straddle cranes to tip if they get caught under their wheels. 

Good unions work to have safer workplaces, not sabotage equipment.

Mr Lingard says a fifth union member, official delegate Dave Phillips, who was not employed by PoAL, was served a trespass notice in December after he entered the port’s mess-room and threatened non-union employees with violence.

Remember MUNZ is a proud affiliate member of the Labour Party, and Labour MPs are down on their picket line.

UPDATE: And another MUNZer speaks up to Whale:

Message: u leave cecil walker alone u bastard do u get off on thiskind of stuff tell u what anymore comments about my bros personal life an u r going to get utu i aint fuken jokn etha its not hard to findout were u r so back off

That’s very sad. Not the threat so much – they have a well documented history of threatening and intimidation. But the child like text speak in an e-mail. Please tell me that man is not in charge of a crane somewhere.

Herald praises Brown

March 13th, 2012 at 1:00 pm by David Farrar

The NZ Herald editorial:

Courage in politics too often goes unnoticed, especially when it requires silence. Auckland’s mayor has shown remarkable courage over the past week, resisting pressure to call the Auckland Council’s port company to heel in the current dispute. Some of that pressure has been exerted in public, by commentators, union leaders and a protest march in sympathy with the sacked watersiders that the Labour Party’s leader saw fit to attend. But just as much pressure will have been coming on him in private, from Labour members of the Auckland Council and party activists who helped him get elected.

The latest challenge for the Mayor is one of the Labour Councillors, Richard Northey, has moved a motion to have a Council committee declare opposition to the Ports restructuring, which would humiliate Len Brown if it passes.

The contractual stevedoring arrangements the company wants to make would match those its nearest rival, the Port of Tauranga, has enjoyed for many years.

They were introduced at Tauranga without the strife that has disrupted the Auckland port for so long now, and members of the Maritime Union are still employed on Tauranga’s wharves.

The Port of Tauranga is only part-owned by its local authority. There can be little doubt partial privatisation makes a difference. Boards of directors can more easily resist political pressure when they owe a duty to private as well as public shareholders. More important perhaps, trade unions know this. They cannot as readily bring political pressure to bear in a dispute.

This is absolutely true. The union becomes far less reasonable, because it has lackeys on the local authority who will interfere on their behalf.

The other advantage of the PoT model is that it allows the employees to become share-holders, as 90% of stevedores at Tauranga are.

The best argument for a partial sale of Ports of Auckland Ltd would be intervention by the mayor and council in this dispute.

Mr Brown knows this very well. It is he, almost alone in public now, who is doing the most to show that assets in full public ownership need not be a pushover in labour bargaining. This is the first step, and probably a necessary one, on the path to proving that assets in public ownership can be competitive with private enterprise in every way.

If Northey wins the vote, it will be a classic case of politicians interfering to benefit their donors and supporters.

All of them are at least half-owned by local councils. Had they been fully privatised there is no doubt we would have seen mergers and rationalisation that would have produced better returns for private shareholders, more efficient transport networks for the whole country and more bargaining strength for the ports in negotiations with shipping companies.

If this sort of rationalisation is possible with ports in council ownership, the largest port will need to lead the way. If Ports of Auckland Ltd can get close to the rate of return the mayor has set, it will be in a more dominant position than it has ever been.

But that all depends now on Mr Brown’s courage. Can he see it through?

This is a huge test for Len. Can he defeat Northey?

On the issue of too many ports, that is a view shared by the PM:

A concession from the Prime Minister that the country may have too many ports.

The drawn out and often acrimonious Auckland port dispute has spawned calls for the number of ports to be culled.

John Key’s giving some thought to suggestions we’re overloaded in the unloading business, and he says the Productivity Commissioner is looking at the overall structure.

“In the end the truth of it is if we have too many ports then they won’t be financially viable and some will close,” he told Newstalk ZB’s Mike Hosking.

Mr Key says Ports of Auckland is losing business to Tauranga because Tauranga is more efficient.

And as the editorial notes, the ownership model stops there being a sensible rationalisation, where a 10% cut in transport costs would add $1.5b to the economy.

Jackson calls on union to be more violent and intimidatory

March 12th, 2012 at 6:09 pm by David Farrar

Hayden Donnell at NZ Herald reports:

Radio Live host Willie Jackson has called for striking wharfies to mount violent “militant action” in their ongoing battle with Ports of Auckland bosses.

Mr Jackson, a former trade union organiser and Alliance Party MP, supported the striking port workers’ calls for eight hour shifts and job security on his Radio Liveafternoon slot today.

He called Ports of Auckland bosses “greedy, filthy, right wing fundamentalists” who were led by a “gutless wonder” mayor.

Intimidation or violence was needed to stop non-union workers being called in to do the striking workers’ jobs, he said.

We first saw some violence on the protest, against counter-protesters. Then there was damage done to at least one car this morning. And now a former MP is advocating there needs to be more violence and intimidation.

Will the CTU and/or the Maritime Union condemn Jackson’s remarks, and say they support peaceful protest only? Or will they implicitly condone them, by remaining silent? For they are the ones who have organised the picket line, so they can’t say it is nothing to do with them.

UPDATE: Jackson now says he only wants the union to be more militant and use greater intimidation, but not use violence, after his earlier remarks were highlighted.