John Roughan: Council ownership shackling port to past

Ports of Auckland hasn't been the same since. Its performance declined, its wharfies resisted Tauranga's competitive stevedoring for years. Photo / Brett Phibbs

Auckland is being offered a list of unlikely alternative sites for wharves intruding too far into the Waitemata.

Imagine for a moment the port of Auckland is back on the sharemarket. It would no longer entertain any hope of extending its general cargo wharves further into the Waitemata. The uproar from Aucklanders last year would have been enough to tell all shareholders the port had hit its tolerable limit.

Nor would we have heard anything as silly as the suggestion this week that a new port might be situated somewhere such as the Kaipara.

That suggestion has come from a Ports Future Study set up by its sole shareholder, Len Brown's Auckland Council, in response to the outcry over the wharf extension the council had permitted.

If the council had been merely a majority shareholder it might have been better able to balance its conflicting responsibilities to the public and the business. It might never have consented to the extensions, and if it had it would have been able to side with its citizens as soon as it realised its mistake. It would have been able to leave the company's interest to the care of active private shareholders.

Just as important, the company could not have resisted the public dismay as strenuously as it has.

But as the sole owner of the business the council's loyalties are torn. To look for a way out of its dilemma, the mayor last year set up the Port Future Study to consider, among other things, alternative sites for the port's expansion. The first fruit of the exercise appeared this week and it was truly bizarre.

Besides the Kaipara Harbour, it has suggested Muriwai, Mahurangi, Whangaparaoa, Long Bay, the Tamaki Strait, the Firth of Thames, the "Manukau area" and the "Waitemata and other Auckland areas". In other words, just about anywhere you like.

It probably wasn't supposed to look outside the region but it did, adding Whangarei, Tauranga and Whakatane to its list. Council member Mike Lee told Radio New Zealand some of the sites should never have been considered and some of the suggestions were batty.

Actually all of them within the Auckland region are batty. The study's chairman, Rick Boven, said they have issued the list for "feedback" to help whittle down the options to a shortlist for their report proper, due in June. What I think he really meant was, "We'd like to get this nonsense out of the way so we can look at something sensible with Whangarei or Tauranga."

A transfer of some of port operations to Mt Maunganui or Marsden Pt would have happened long ago if Ports of Auckland Ltd was a normal company listed on the sharemarket.

Those will be the sites Mike Lee says they were not supposed to look at. Lee was chairman of the Auckland Regional Council when it decided to buy out the port's minority shareholders and take full control. Any tie-up with the Port of Tauranga Ltd, which now owns 50 per cent of Whangarei's Northport, has been anathema to Auckland's sole owner, though Port of Tauranga is part owned by the local council.

A transfer of some of port operations to Mt Maunganui or Marsden Pt would have happened long ago if Ports of Auckland Ltd was a normal company listed on the sharemarket. It would have some cross ownership with Tauranga and its directors would have started rationalising the operations of all three ports as soon as the public constraint on Auckland's expansion became evident, if not sooner.

I should declare I have a few shares in the Port of Tauranga but at least my interest is not in conflict with the interests of the national economy. It is the parochialism of local government and ideological opposition to even partial privatisation that is holding up the rationalisation of the nation's trade terminals.

In Auckland it dates from 1992 when the country was in the depths of a recession and reform fatigue. Seaports had passed to the control of regional councils and the Alliance Party won a majority on Auckland's council that year. Fortunately, the Waikato Regional Council had also been give a share of the Auckland port and it sold its holding, putting the company on the sharemarket where it performed well. Then one day, in 2005, the ARC decided to buy out the minorities.

Ports of Auckland hasn't been the same since. Its performance declined, its wharfies resisted Tauranga's competitive stevedoring for years. Now it needs longer wharves to accommodate the next generation of vehicle carrying ships.

Tauranga, meanwhile, is dredging and preparing for those ships. It has developed a rail hub in South Auckland for collection and distribution of freight and has extended its business to the South Island, buying into the Port of Timaru and establishing a rail hub for it in Christchurch.

Auckland is not going anywhere, if Mike Lee has his way. It will just have to make more efficient use of its present site, he said. I should not be arguing with him. My shares are doing fine. But from a national point of view, it's a crying shame.