Q&A: ARC and Ports of Auckland

As the Auckland Regional Council takes  control of Ports of Auckland, ARC chairman Mike Lee explains the decision.


Q: Why is the Auckland Regional Council, through its infrastructure arm Auckland Regional Holdings, buying 100 per cent control of Ports of Auckland?

A: Two reasons. We believe the port is a very sound blue-chip investment which will provide excellent returns over the long term for the Auckland region. With 100 per cent public ownership it will be easier to achieve a comprehensive redevelopment of Auckland's waterfront. How will a public body like ARH operate Ports of Auckland? The port company is controlled and managed by its board under the Port Companies Act. The present relationship between the shareholder (ARH) and the company is likely to stay much the same.

Q: Why is the purchase important for future development of the Auckland waterfront?

A: Aucklanders want a waterfront that is managed and developed in a comprehensive way, taking into account both economic and public-good benefits. We want an integrated plan rather than looking at individual parts in isolation from surrounding areas. Do you plan to separate the port operation from the waterfront development?

This is something that will be decided by the boards of ARH and the port company in due course. Which pieces of land are most important to ARH and for what uses? The ARC and the Auckland City Council are carrying out a waterfront visioning process in conjunction with Ports of Auckland, which will identify any future direction. Obviously there is a lot of focus on the Western Reclamation [tank farm] and the Viaduct Harbour.

Q: You have said there are no plans to sell the ports company. What about leasing the port operator to a commercial operator such as a transport or logistics company?

A: The Ports of Auckland board and management are doing a perfectly competent job running the port operations, which is the company's core business. We don't see any benefit in bringing in outsiders. We did not buy the port to effectively alienate it. What will happen to the dividends ARH receives from the port company?

They will largely go to funding Auckland's transport and stormwater needs. Transport infrastructure is a priority for the ARC group, and we will be spending $200 million on transport infrastructure and operations over the coming year, and nearly a billion dollars over the next 10 years. In the longer term, I can envisage income from the port company and other assets in the ARH portfolio providing an alternative source of funding to take the pressure off the ratepayers.