MPs express concerns on proposed port sale

Lyttelton Port

CHRISTCHURCH - While two port companies joust for control of Lyttelton Port's minority shareholders, Christchurch's Labour MPs have come out against any sale of the port to a private offshore port operator.

Christchurch City Holdings Ltd (CCHL) and Port of Otago Ltd (POL) are battling it out for Lyttelton Port's remaining shareholders ahead of CCHL's deadline for its $2.20 per share offer which closes tomorrow.

POL announced yesterday it had bumped its stake in Lyttelton Port to 13 per cent through on market buying and was looking to boost that to 15 per cent at an offer price of $2.24.

Meanwhile, CCHL -- the Christchurch City Council's investment arm -- announced that it had secured 71.64 per cent of Lyttelton Port in its $2.20 per share offer.

CCHL originally wanted to gain a 100 per cent stake in LPC, then onsell a 49 per cent holding to Hong Kong's Hutchison Port Holdings, which would operate the port.

But that was thwarted when Port Otago grabbed a 10.1 per cent blocking stake in LPC, and Hutchison subsequently pulled out of the bid.

In a joint statement yesterday, just hours before a public meeting in Christchurch to discuss the potential sale of the port, Canterbury Labour and Progressive members of Parliament expressed "serious concerns" about both the process and potential outcome of the proposed sale.

The statement was issued by Jim Anderton (Progressive), and Ruth Dyson, Clayton Cosgrove, Tim Barnett and Mahara Okeroa (Labour).

Lianne Dalziel stood aside from the public statement because, as Minister of Commerce, she is seen as a decision-maker under the Commerce Act.

The MPs said they believed the "current competitive situation and price gouging actions of New Zealand ports is unsustainable in the longer term".

They said the current situation -- "a direct result of the so-called 'shipping reforms' of the 1990s -- left all ports vulnerable to shipping companies' whims.

"These reforms have also resulted in New Zealand ports competing against each other, and often price gouging in order to attract business," the MPs said.

The pricing regime was not sustainable and would mean some ports would fold.

While CCHL's sale proposal was "one alternative", it could possibly give Lyttelton a competitive advantage over other New Zealand ports and could strengthen Lyttelton Port, the MPs said.

"But it may be at the cost of current employment security and involves the loss of a public asset."

A stronger and more competitive Lyttelton Port, with protected employment security, could be achieved in another way -- by much closer collaboration between ports.

New Zealand port companies, the MPs said, needed to get a strong message that they could not continue to compete if they wanted to survive.

The MPs said New Zealand ports must collaborate to compete internationally.

The sale of Lyttelton Port's operational arm was not the only or the best option and shouldn't be supported.

"It is the sale of a strategic asset and it should be kept in public ownership in New Zealand," the MPs said.

A public meeting at the Christchurch Town Hall last night also criticised the potential sale.

Environment Canterbury (ECan) chairman Sir Kerry Burke described CCHL's move as clumsy, The Press newspaper reported today.

"This proposal disadvantages all citizens, no matter where they come from," Sir Kerry said.

"I wonder whether selling off is actually the best way to deal with our assets."

He said it was important the issue was dealt with in a more open and democratic way.

Maritime Union general secretary Trevor Hanson said Lyttelton was only the first battle for New Zealanders.

"All our ports must work together in a co-operative and long-term manner," he said.

Meanwhile, a lobby group formed to oppose the Lyttelton Port sale is urging the Government to step in.

Keep Our Port Public (KOPP) spokesman Murray Horton today congratulated the MPs for their strong stand against the sale.

But he said it was "not enough" for them to stand on the sidelines while the council rushed "headlong back into the good old days of the 90s".

"If the council won't come to its senses, then KOPP urges the Government to bring it to its senses and stop in its tracks any moves to privatise and/or sell overseas Lyttelton or any other port company," Mr Horton said.

He said if the council was allowed to get away with the sale, it would set a dangerous precedent for other ports and "restart the whole process of public asset privatisation" that was halted in the 1990s.

- NZPA