Auckland Mayor Wayne Brown says he has lost confidence in the board of Ports of Auckland - and is working on replacing it.
Brown has been critical and has called for heads to roll on other council-controlled boards, but this is the first time he has publicly said he has “lost confidence” in a board.
Brown made his comments about the board of Ports of Auckland in a live question and answer session with Herald premium subscribers this morning.
Asked why he was not seeking Ports of Auckland to pay rent for the space it uses, Brown said: “I have made no such decision. I am currently working on replacing the board, in which I have lost confidence, with people who accept much higher returns are required from port operations than any that are forecast.
“We also need a clear plan and timeline to progressively cease car and container port operations at the CBD, starting soon, so that the private and public sectors have the certainty they need to invest in new transport and other infrastructure accordingly.”
His statement ups the ante with board chairwoman Jan Dawson, who in the past week has had a public spat with Brown over how much the company will pay its council owner next year.
In a statement this evening, Dawson said it was “disappointing” Brown made his statements prior to meeting the board.
“We repeat our invitation to the Mayor to visit the port to discuss the operations, economics, and its importance to Aucklanders.”
Dawson took issue with an allegation by Brown that the port is being tardy in responding to his drive for council savings.
In her statement, Dawson said Brown’s comments “create uncertainty” for the 3000 Aucklanders, whose livelihoods depend on the port, and also for the thousands of businesses in Auckland and surrounding areas which rely on imports and an efficient supply chain.
“Ports of Auckland is New Zealand’s key import port which provides the quickest and most economic and carbon efficient entry point for goods required by Aucklanders. As an example, moving the cars to another port, either Northport or Tauranga will double the emissions of importing vehicles,” she said.
“The port business is a valuable $2 billion asset owned by all Aucklanders and closing the port would see this wealth transferred to other regions.”
Dawson did, however, concede the port has not performed well from a safety operational and commercial perspective in recent years.
“This is changing with improved safety, operational and commercial performance.”
Dawson said the board are confident the port will meet and even exceed its statement of corporate intent profit targets for FY23-FY25 and return dividends of $30m per annum for FY23 and $50m per annum in the medium term.
At the mayor’s request, Dawson added, the port has also commenced work on the examination of the use of the area between the Ferry Building and Bledisloe Wharf.
A report is due by the end of March next year.
“There has been no reluctance in the past by the port to return the land to the community,” Dawson said. “Over the past 25 years we have returned 117 hectares of land to Council. Any transfer needs to be economical and practical.
In a media statement last Thursday on a $270 million hole in the council budget, Brown said the council had yet to hear from the port company about what savings, efficiencies and revenue enhancements it has planned to deliver a “significant cash dividend” of at least $30m.
In response the following day, Dawson said the board was “surprised by your statement as we have been taking a number of actions to assist with the management of the budget deficit”.
“We have been working closely with council staff over the past couple of weeks on a number of cost-saving opportunities around debt funding and insurance premiums. This work is well progressed and the initiatives will take effect this year,” Dawson said in the letter to Brown.
Maritime Union Auckland branch secretary Russell Mayn today said it would be a mistake to remove the current board and that a more constructive discussion was needed.
He said the board and management have engaged with the workforce and Ports of Auckland Limited (POAL) had a positive future.
“There has been a new focus on good workplace relations and a higher quality of health and safety skill sets on the current board.”
Mayn said the port company should not be viewed as simply a money-making venture in itself.
“While POAL can and will deliver returns to its owners, the people of Auckland, it has a much greater value in serving as the major import port of New Zealand.”
After making repeated assurances during the campaign that he would get the port company to deliver $200m in rates and $200m in dividends, Brown pulled back this month, saying he would get $400m from the land the company uses - but that wouldn’t be achievable via port operations.
“There is no scenario under which the port will deliver an economic return to the people of Auckland, even if it manages to resume dividends in the future,” he said.
“No matter how much POAL operations improve, it is never going to pay for where it is, and even the promised but yet-to-be-achieved financial returns would represent a woeful economic return on Aucklanders’ assets.”
Brown has given the port company until the end of March to come up with a plan and timetable to move its operations from the ferry terminal to Bledisloe Wharf for an area to be enjoyed by Aucklanders.
Ports of Auckland has been under fire in recent years for a grim health and safety record, poor productivity, weak returns to the city’s ratepayers, and a costly and fruitless effort to implement an automation project with an associated write-off of $65m.
The board and executive leadership at Ports of Auckland have already had a big shake-up, with former chief executive Tony Gibson and board chairman Bill Osborne quitting last year following a damning review that found systemic problems with health and safety.
Brown has the ability to replace board members through the performance and appointments committee on which he sits with a majority of like-minded councillors. Former Mayor Phil Goff used the same set-up during his six years in office to replace board members.
In another question from a Herald subscriber about Government plans for light rail in Auckland, Brown repeated his opposition to the $14 billion project.
“It is a project that has been imposed on Auckland by central government, with no clear business case. It would prevent Aucklanders from getting the maximum benefit from the multibillion-dollar City Rail Link project,” Brown said.