Tauranga port's frustration a sign of severe constraints on infrastructure providers: commission

Port of Tauranga container capacity feeling the heat of volume and ship size growth. Photo / George Novak

Alarm that New Zealand's biggest port Tauranga risks running out of capacity highlights the "severe" constraints the country's infrastructure providers are forced to work within, says the Infrastructure Commission.

The autonomous Crown entity has assured Port of Tauranga leaders it is pushing for innovation and "an outcome-focused mindset" to the reform of New Zealand's planning system, as concerns grow about delays in starting a container berth extension that will take two years to build.

But Transport Minister Michael Wood has declined to answer the Herald's questions on the issue, which arises as New Zealand grapples with supply chain congestion and an Omicron outbreak likely to worsen freight and goods delivery problems.

The berth extension, planned since 2018 and considered by export and import leaders to be "critical" infrastructure as freight volumes balloon, is now awaiting a resource consent hearing date in the Environment Court, after being declined for the Government's shovel-ready and Covid fast track infrastructure project programmes in 2020 and 2021 respectively.

The $68.5m project has lost a year through these unsuccessful processes, and chief executive Leonard Sampson has warned the port is likely to run out of capacity in 2024-2025 if current 7-plus per cent annual compound freight growth continues.

Leaders of some of New Zealand's biggest export businesses, including Zespri, Fonterra and Oji Lodestar have expressed concern at the situation.

Infrastructure Commission chief executive Ross Copland said the Port of Tauranga case raises questions about the underlying purpose of a resource consent "given there are many other means by which the environmental, social and cultural elements associated with the ongoing operation and development of an established port could be handled".

"It is almost inconceivable that consent would be declined for such an upgrade and so it seems the underlying purpose of this expensive and time-consuming process is to determine the conditions under which the upgrade needs to occur, a matter which has been reviewed and resolved a number of times at ports around New Zealand and no doubt at Tauranga as well," Copland said.

Infrastructure Commission chief executive Ross Copland. Photo / Mark Tantrum

The commission recognised the port formed a critical part of the New Zealand supply chain as the country's largest port by volume and value of freight handled.

The commission was not directly involved in the consenting of infrastructure but was highly engaged in the reform of the Resource Management Act which has "severe" implications for infrastructure, Copland said.

Created in 2019 and chaired by former Reserve Bank governor Dr Alan Bollard, the commission last year issued a draft strategy describing the infrastructure issues New Zealand is facing. It set a vision for the role infrastructure could have in supporting New Zealand's future, and several objectives and recommendations for change.

The strategy highlighted "the critical need to address the barriers for infrastructure providers in our current consenting system", said Copland.

In 2020 it commissioned and published a freight sector review by Deloitte which identified a strong trend towards larger container vessels with annual growth in ship size of 7 per cent over the past 15 years. The commission said this raised real questions about the future maximum vessel capacity at the ports of Tauranga and Auckland which together handle 65 per cent of New Zealand's container freight.

Port of Tauranga says it handles 42 per cent of this collective volume.

A recent commission study on the cost of consenting identified that infrastructure providers now spent $1.3 billion annually on consents.

"It shows direct costs have increased 70 per cent since 2014 and the time taken to receive a consent had grown by 150 per cent in the same period."

Infrastructure sector member organisation Infrastructure NZ said the time that could be involved in applications for large infrastructure was a significant concern.

Chief executive Claire Edmondson said the organisation was looking to the RMA reform process to address this.

"We think there is a fair bit that can be done in the consenting space and generally streamlining processes to allow infrastructure to be delivered more quickly and effectively, and for lead-times for large projects to be dramatically reduced.

"More generally, and of importance in getting this project delivered quickly, the sector is one of many suffering from delays and increased costs of sourcing materials.

"The bottom line is, the sooner the project can start, the better off we're going to be."