Finance Minister Grant Robertson to look over councillor's port half sale idea

Could Ports of Auckland be jointly owned by the council and government? Photo / Brett Phibbs

A proposal for the Government to take a 50 per cent share in the Ports of Auckland to relieve the city's Covid 19 financial woes is now with the Minister of Finance and other Cabinet ministers.

Senior councillor and planning committee chairman Chris Darby said he had forwarded the idea to Grant Robertson and the Minister and Associate Minister of Transport, and the Regional Economic Development Minister.

Robertson's office said it received the proposal on Friday and minister had not yet had a chance to look at it.

Meanwhile Darby, who has apologised to councillors for surprising them by informally floating the idea publicly, said he had since discussed it with Finance and Performance Committee chairwoman Desley Simpson.

"...She has assured me all revenue raising options are on the table for discussion.

"This will form part of our examination of information pertaining to the 10-year budget for 2021-2031. I have proposed to Councillor Simpson a specific workstream to identify new revenue sources."

Darby said he had sent the proposal to all councillors and senior management for consideration.

He told the Herald he wanted to start public discussion on how the council and Government could form a strategic relationship that released capital "to ease the council's financial plight".

"I fully understand there are a range of views on the port and port relocation. It's healthy to have a robust contest of ideas. If ever there was a time for that, it's now as we navigate the enormous challenges of the new Covid world we now live in."

Darby's proposal, which envisaged full or partial sale of the port company would release $1.2 billion to $1.6b, said the council was facing dramatic reductions in revenues and significantly reduced capital and operational expenditure programmes.

Also ahead was 9 per cent regional unemployment, more than 1000 council staff redundancies and associated loss of capability, and a debt-to-revenue ratio exceeding 290 per cent.

The second Auckland lockdown meant the council was facing even further reductions in revenue and was "fast running out of options" to progress already reduced work programmes while balancing its finances.

The conventional course of raising debt levels of beyond 300 per cent of annual revenues and raising property rates was unsustainable and risked compounding the problem, he wrote.

Darby told the Herald a partnership with the Government would extend beyond ownership to inter-related strategic decisions including collaborating on port relocation and jointly resolving Auckland's supply chain challenges, as well as "re-imagining" the future of the port company's 77ha of publicly-owned waterfront land.

"In later stages there may be an opportunity for the private sector to participate in taking a stake in the new upper North Island port. The multi-billion capital investment required for that... would likely require such investment in partnership with government and council.

"On no account do I propose alienation from public ownership in my government/council model."

Before Auckland ratepayers owned the port company, it was listed on the NZX. A slew of commissioned external reports have recommended the port's CBD operations will need to be relocated in the next 20 years.

Mayor Phil Goff earlier told the Herald while the future location of the port had still to be decided, it did not make sense to him to discuss putting it on the market because it would be unsaleable until that question was resolved.

"I believe strongly that the ownership fo the port land should remain in public hands because the development of that land is critical to the future shape of the city."