Ports of Auckland is the country’s main imports gateway. Photo / John Barker
Auckland’s port leaders have suggested to new mayor Wayne Brown it would be economically and environmentally prudent for any decisions on the port’s future to wait until a major Government supply chain strategy is completed, sometime next year.
The suggestion has provoked a sharp reaction from Brown. His response also suggests he has challenged the Government about that strategy.
A spokesman for Brown told the Herald the mayor “urges the port company to spend less time and ratepayers’ money on lobbying to protect the uneconomic status quo and more time working constructively with the people of Auckland to plan for change in land use that Aucklanders voted for”.
Brown’s spokesman said Brown’s “expectations could not be clearer”.
Port company chair Jan Dawson made the suggestion to wait in a response to Brown’s letter of expectations of the port immediately after his election.
“As POAL (Ports of Auckland Ltd) is an integral part of the New Zealand freight network, we suggest it would be appropriate to wait for the MoT (Ministry of Transport) strategy to be completed prior to making any decisions on the port’s future,” she said.
Brown’s expectations, a plank in his election campaign, include “immediate steps to achieve a more efficient use of port land” to make some of the port space available to the public, which would involve stopping port activity on Bledisloe Wharf, site of the port’s vehicle import operations.
He has told the Herald work would start this term on turning port land into a vibrant area like the Viaduct Basin with a mix of open space, restaurants, apartments and businesses.
Dawson, appointed last year by Brown’s predecessor Phil Goff as part of his drive to improve the Auckland Council-owned port’s financial and health and safety performance, noted there had been many studies on the location of the port, as recent as the 2020 Sapere report.
“All the studies and reports highlight that the issues are complex and would require significant investment from Government and councils to fund the infrastructure required to support a change which would take up to eight to 10 years to bring to fruition,” she said.
Dawson said the MoT was developing a New Zealand supply chain strategy that would consider a broad range of advice and inputs including the recommendations of the 2019 Upper North Island supply chain study headed by Brown, and the responding 2020 report by the Sapere consultancy. Brown’s study broadly concluded the port’s cargo operations should be shifted to Northport in Northland.
“These studies indicate there are considerable economic and environmental barriers to moving the port or its component parts to other ports and any move will require considerable Government funding,” Dawson said.
Ports of Auckland is the country’s main imports gateway.
Brown’s spokesman said the mayor had told transport minister Michael Wood last week that “MoT needs to fully understand the intentions of the owner of Auckland’s waterfront land, which is Auckland Council, before publishing yet another national or even North Island supply chain strategy.”
“Mayor Brown led the last central government supply chain study, but his work was set aside by Cabinet on the grounds that any change first required a decision from Auckland Council, as owner of the land.
“Now as mayor, the same people are telling him the landowner must wait for central government to complete yet another study before Auckland Council can do anything.
“The mayor regards this as cynical delaying tactics by those with a vested interest in protecting their privileges under the uneconomic status quo - which even the port company’s chief executive admits sees Auckland ratepayers subsidising importers,” Brown’s spokesman said.
Brown had promised minister Wood he would work quickly and constructively with his councillors to ensure central government had the information it needed about what Aucklanders want to do with their waterfront land and when, the spokesman said.
“That is necessary before the MoT can complete its work and before sensible infrastructure investment decisions can be made by both central government, including Waka Kotahi (NZ Transport Agency) and KiwiRail, and local government and the private sector, including the country’s ports.”
New port chief executive Roger Gray this week told the Herald the end of vehicle importing would cause the port business to lose a major chunk of annual income, and relocating the operation to another port would significantly increase carbon emissions.
He said more than 300 people worked directly in the import operation which handled two-thirds of New Zealand’s vehicle importing activity, and up to 10,000 jobs in the Auckland economy were linked to it. The port handled 240,544 car imports in FY22.
But Gray said his formal response to the mayor’s request on freeing-up Bledisloe Wharf for public use would be best left until the work of a new committee of stakeholders looking into options for the site was concluded. The mayor had asked for the committee formation. It would look at the practicality and economic impacts of Brown’s request, Gray said.
On other issues raised in Brown’s letter of expectations, Dawson said the port’s board and management were “very aware” the port’s safety and financial performance over the past four years had not been satisfactory.
“We have committed to a transformational strategy to reverse this trend ... We are confident we can return to paying the council a dividend of $50 million pa (a year) in the medium term utilising the current footprint of the port.”
The port’s dividend payment to Auckland Council was $14.2m in FY22, up on FY21′s $10.4m return to ratepayers.
The port posted a $10.2m loss in FY22, reflecting a $63m write-off from a recent decision by Gray and the largely-new port board of directors to abandon a project automating the container terminal, still unimplemented six years on.
Revenue was $265.3m, up on $226m in FY21.
In comparison the Port of Tauranga, New Zealand’s main export gateway, posted a group net profit after tax of $111.3m, in FY22, up 8.7 per cent on the previous year.