Brian Rudman: Maybe users could pay for Queens Wharf upgrade

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An Auckland summer wouldn't be complete without mosquitoes taking over my backyard, the Curran St on-ramp to the harbour bridge closing for a reseal, and cruise ship operators belly-aching about their need for better waterfront facilities.

With the $18.6 million transformation of Shed 10 on Queens Wharf into a new terminal underway, you might have thought we would have been spared at least one of these perennial irritations. Silly me.

The $2.5 million automated gangplank about to be erected on Queens Wharf is no longer adequate. Royal Caribbean cruise line boss Gavin Smith says that with super-liners on the horizon, we should have two gangways to avoid bottlenecks when passengers are jostling to get on and off the boats.

The industry has also been lobbying Waterfront Auckland for an extra $5 million to be spent on strengthening Queens Wharf to handle ever-bigger liners, and a further $3 million to plant a mooring pole beyond the wharf for the use of ships longer than the 290m Queens Wharf can handle at present.

With the demands come the usual threats. "If we don't make decisions we are in danger of the cruise ships bypassing us," says Cruise NZ chairman Craig Harris.

If I'm sounding a little jaundiced, it's because none of the proponents or beneficiaries of the improved facilities are offering to fund them. They're expecting Auckland ratepayers to dig even deeper into their pockets for the economic good. Well, the economic good of cruise lines, tourist operators, foreign hoteliers and souvenir and food shops.

Even Ports of Auckland (POAL), Auckland Council's wholly owned commercial expert in such matters, doesn't want to know. It refused to pay for the present upgrading of Shed 10, forcing ratepayers to cover that expense. All heart, POAL has found enough cash to pay for the gangplank and for operating costs of the terminal - but only on the days ships are berthed. If that's not rich enough, ratepayers have to pay annual wharf operating costs of $4.1 million, yet the port company pockets the berthage fees paid by cruise operators.

To me, a cruise ship terminal is just another bulk depot for commodities crossing the wharf - in this case humans rather than second-hand cars or containers full of frozen animal parts. Ratepayers are not expected to fund new freezer facilities, or container-lifting straddle carriers. That is rightly the business of the port operator whose expertise we retain to make these kinds of decisions based on solid commercial evidence. The fact POAL doesn't want to get involved, suggests its political masters should be wary of the cruise industry's pleas.

It's hardly a new problem. In January 2008, the Government Urban and Economic Development Office published a discussion paper "addressing cruise ship industry capacity constraints in Auckland". Its purpose was "to identify economic benefits of New Zealand's cruise ship industry", in particular, "economic benefits to the Auckland region".

Among the proposals advanced to provide better facilities was the current Queens Wharf upgrade. The report did note that the "disadvantage" of the Queens Wharf option was that it "may not be able to construct a traditional cost benefit analysis to justify the additional investment". It added, "It is unlikely the POAL would see a redevelopment and management of operations [on Queens Wharf] by the port as commercially viable ..."

The report continued: "The parties responsible for the provision of cruise ship facilities on Auckland waterfront do not capture a significant proportion of the direct spend and flow-on effects from cruise ships, passengers and crew. Positive externalities are captured by airlines, tourism and leisure operators and the retail and hospitality industry. Those providing local cruise ship facilities have few commercial incentives to increase the capacity or quality of waterfront assets." In other words, ratepayers get little return for their investment.

The report muses about how "to overcome the inherent free rider paradigm". Could I suggest making the user pay.