The ownership structure of Northport, the Whangārei port being promoted to replace Auckland's port, needs to change, says a sting in the tail of the report to Government recommending the switch.
Northport is owned 50:50 by publicly listed Port of Tauranga and listed Marsden Maritime Holdings, which has Ports of Auckland as a nearly 20 per cent shareholder.
The leaked final report of the Upper North Island Supply Chain Strategy working group says it has identified that the current ownership of Northport isn't in the shareholders' or New Zealand's best interests.
"The key issue is that the structure makes it too easy for one or other of the shareholders to use their voting interests as a blocking stake, depending on how their individual short-term interests view the particular matter.
"This will need to change for the recommendation (to develop Northport) to be successful and for Northport to grow," the report says, going on to suggest the Government legislate to force the change if the owners can't work out a solution commercially between themselves.
A Cabinet committee is today considering the final report, which has yet to be released to the region's port companies and other freight industry stakeholders.
A spokeswoman for the associate transport minister and regional economic development minister, NZ First's Shane Jones, who is championing the switch of Auckland's cargo activities to Northport, said it was hoped to release the final report before Christmas.
The Herald, which has a leaked copy, is this week extensively reporting on its contents in a series of stories.
Port of Tauranga and Northport leaders say they are unable to comment on the concern about the ownership structure because they haven't received the final report. However they did not seem surprised when told of the comments.
Auckland Council-owned Ports of Auckland, which owns 19.9 per cent of Marsden Maritime, declined to comment.
Marsden Maritime is 53 per cent owned by the Northland Regional Council. The Bay of Plenty Regional Council holds a majority stake in the Port of Tauranga.
The working group says it would prefer change is made to Northport's ownership structure on a commercial basis between the parties. It was confident this was feasible if the Government ended up supporting the recommendation to close Auckland's port and develop Northport into a major freight gateway for the North Island.
"However should commercial negotiations fail, regulatory options could include legislation requiring the relevant local authorities and council-controlled organisations to divest, purchase, consolidate or otherwise deal with their shareholdings in the relevant ports, for the purpose of establishing an ownership structure that supports growth at Northport," says the report.
"It would have to be carefully communicated that this is a perfectly legitimate step for Parliament to take given the council ownership of these organisations was established through statute, namely the Ports Companies Act 1988, and therefore further changes are not precedent-setting for any commercial organisations."
Asked what evidence the working group had that the ownership structure was constraining Northport, group chairman Wayne Brown said it had been told so during industry consultations for its study. Former Northport and Marsden Maritime chairman Sir John Goulter and Northland Regional Council leaders were among the commenters.
Sources told the Herald a likely first response to the report's ownership structure concern would be the three ports' chairpersons getting together.