Recent media coverage raised fears that in future Auckland's Port could expand to the edge of its development zone. In response, the Auckland Council voted last month to conduct a review of the long-term development options for Ports of Auckland, Tauranga and Marsden Point before confirming the option for further
harbour reclamation in the Auckland Plan.
In seeking to retain an existing development envelope that it has had since 1989, the Port brought to light an issue that arises time and again as our country grows.
With projected freight demand growing significantly as our population increases, all three of the ports in the Upper North Island - Northport in Whangarei, Auckland and Tauranga - will need to review growth strategies over the next 30 years.
They need to grow to meet the increasing demands of international and local clients. And they need to grow to ensure that New Zealand as a small island nation retains its position as a thriving first-world economy.
Ports of Auckland is an important contributor to the country. In 2010 its operations supported 22% of the Auckland economy and sustained 336,200 jobs nationwide. Those jobs include people working for thousands of small and large ventures which rely on an efficient port for their businesses to thrive. That value to the New Zealand economy needs to be maintained.
It's not growth that is the problem; it's how that growth is managed.
While accepting that some further expansion of the existing footprint may be needed to accommodate freight growth and larger ships, the Port also needs to recognise that there is an opportunity cost. And that cost is Auckland's harbour.
The Waitemata Harbour is also an important economic asset for the city. While we understand its value from an environmental and cultural perspective, the access to and proximity of, the city to the harbour is intrinsically linked to Auckland's economic value as well.
There is the obvious tourism benefit of a large, pristine harbour but it's more than just a tourist drawcard. Our harbour is a key factor in attracting and returning talent to the city. It draws major events such as the Louis Vuitton Cup and Volvo Round the World Yacht Race. The Rugby World Cup 2011 investor and media centre was placed on Queens Wharf to profile our harbour attracting thousands of visitors.
A priority for Committee for Auckland this year has been the development of a project recognising and evaluating the cultural, environmental and economic value of the Waitemata, Manukau and Kaipara Harbours. Because if growth in one area cannibalises growth in other areas to the extent that it produces a net loss, that growth is not positive for Auckland or New Zealand.
Committee for Auckland is of the view that a more realistic balance between a modern and efficient Port and maintaining the value in our harbour jewels will be influenced by three factors. Firstly, greater productivity within the existing operation. Following that, more sequenced infrastructure development designed to keep pace with demand rather than promoting unfettered development in anticipation.
But most importantly, now is the time for those with an interest in Auckland and New Zealand's economic growth to sit around the same table and discuss the best way to achieve overall growth rather than fighting it out for individual space.
We need a meeting of minds.
Currently the three Upper North Island Ports operate separately, as required by law. The three ports compete for staff, for clients and resources.
The international container shipping industry is intensely competitive. It is dominated by a few large shipping lines with huge bargaining power. That power is even more pronounced under the current fragmented model where individual ports compete with each other for customers. This year alone we've seen Maersk and Fonterra move some of their commitment from Ports of Auckland to Port of Tauranga.
Simply shuffling customers between the ports is not producing growth at all.
However, if the three ports were to work in a more integrated manner, they would not only be drastically increasing their capacity and quality offering to those clients (which arguably would command more premium pricing) but would also be avoiding a situation where clients are using the competitive environment against them.
An integrated approach would leverage the strengths of each port allowing more targeted infrastructure development. Auckland's strength is its proximity to New Zealand's biggest market due to its location in Central Auckland - ideal for imports. Tauranga with more space to expand is potentially an export port. Whangarei too has additional capacity and lower land costs, bearing in mind the additional investment required to provide rail infrastructure. This offers great potential over the longer-term.
While the three ports are working together where they can and the draft Auckland Plan places a focus on a more regional approach to infrastructure planning, the regulatory environment does not currently allow further integration of the ports' service offering. Perhaps now is the time to address that.
Ports of Auckland is addressing the first growth issue now; productivity. If ports are to hub and grow then all parties must be pulling their weight and acting commercially. The next issue, in the Committee for Auckland's view, is more impetus on a broader regional approach to planning and decision-making in the Upper North Island and more integration and dialogue in relation to any future infrastructure development to ensure the outcome is overall growth.
Integrating growth plans to best meet the needs of both clients and the communities they work within can only be positive for New Zealand ports. We are a small country. We are competing in an international market. The best way to do that is to join forces, plan well and look at the big picture.
