The Government will start a work programme to enable a decision to be made on the future of the Ports of Auckland in the first half of next year, says Associate Transport Minister Shane Jones.
This follows the public release today of the final report of a Government-appointed working group which considered the future of ports in the upper North Island, and the future of the Auckland Council-owned port.
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The final report concludes the Ports of Auckland is not economically or environmentally viable and its cargo operations should be moved to the deepsea port Northport, near Whangarei.
Jones said shifting Auckland's port would be a "huge undertaking" and, if done right, would have benefits for all of New Zealand, not just Auckland and Northland.
"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.
"The working group considered eight scenarios to determine the most efficient arrangement for the upper North Island ports. Their preferred option is the managed closure of the Port of Auckland's freight operations, the development of Northport and the continued development of the Port of Tauranga.
"It remains my view that Northport is the most sensible relocation option but I accept this is a whole-of-government decision and the report has given us a range of economic, social and environmental factors to consider. I look forward to reporting back to Cabinet in May 2020," Jones said.
A Ministry of Transport briefing paper to Cabinet released along with the working group's final report said the key issue for Cabinet to consider when it makes decisions is whether the potential gain to New Zealand from the port move is sufficient to justify Crown seed investment and the possible need for legislative and regulatory intervention.
The working group estimated the total capital cost of shifting the port operations to Northport to be $10.3 billion. This investment was expected to be largely commercially funded and driven.
Indicative infrastructure costs to the Crown are estimated to be around $3-4b covering development of the North Auckland rail line, rail links to Marsden Point, rail links within Auckland city, and road building costs.
The ministry briefing paper said other costs not recognised in the working group's reports call fall on Government, for example a proposed inland freight hub in West Auckland and the costs of negotiating a potential commercial arrangement for this.
"It is important to recognise that Government has a limited share of the decision rights in relation to any relocation of ports. We recommend we work with the seven cornerstone partners to build consensus on an upper North Island supply chain strategy," the briefing paper said.
The seven partners are: Auckland Council, Ports of Auckland, Bay of Plenty Regional Council, Port of Tauranga, Northland Regional Council, Northport and Marsden Maritime Holdings.
A major criticism of the working group's recommendation that Auckland port be closed has been a lack of discussion of how Auckland city would be compensated.
The ministry briefing paper noted "engagement with these parties (the seven) has been limited to date and we anticipate that aligning the partners will take some time to achieve."
A joint Treasury-Ministry of Transport briefing paper to Cabinet ministers, also released, cautioned on the working party's suggestion that regulatory intervention may be needed to drive through its recommendation if cooperation couldn't be achieved between the ports.
"We recommend the focus should be on working closely with the key partners to build consensus on a clear upper North Island supply chain strategy.
"While the exact nature of the regulatory and legislative levers are not clear, they could significantly impact on private property rights," the paper said.
Officials said consensus needed to be built among the key stakeholders on the arguments against other port location options for Auckland's cargoes.
The two departments proposed further analysis around: refinement of logistics and supply chain, including market response from infrastructure investors, carriers and shippers; transport and land use planning impacts, including congestiion relief benefits; funding and financing options, governance and delivery options and legislative and regulatory considerations.
Officials will work with the newly-formed Infrastructure Commission on the further analysis.
Officials said they expected external consultancy costs for further analysis would be "significant" and requested initial funding of $1m funding for consultants to start work.
Prime Minister Jacinda Ardern has previously confirmed that her cabinet is in agreement that it "is not viable" for the North Island's main port to remain in Auckland.
Ardern told her weekly post-Cabinet press conference this week that it is Cabinet's – and therefore the Government's – position the port needed to move.
But she stopped short of saying where it should be moved to, saying these sorts of details will be addressed today.
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