Heads could roll over Ports of Auckland expansion plans, according to a senior Auckland Council source.
Auckland Council has started to flex its muscles on plans by the ports company to build two massive wharf extensions nearly 100m into the Waitemata Harbour.
Council chief executive Stephen Town has written a letter to the council body overseeing Ports of Auckland asking it to "encourage" port bosses to halt the extensions until a wide-ranging port study is done.
Mr Town and councillors have also delivered a firm message to the port company to become more engaged with the community.
"It is my view that Ports of Auckland Ltd (POAL) has not engaged sufficiently with key stakeholders, or the public at large, in relation to the proposed wharf extensions," Mr Town said in his letter to Auckland Council Investments Ltd (ACIL).
Deputy Mayor Penny Hulse told a council meeting yesterday the letter contained an "iron fist in a velvet glove". If all else failed there was a "thermonuclear" option.
A senior council officer indicated the "thermonuclear" option could see heads roll.
The officer said the council was not impressed with the ports company or ACIL over the wharf issue.
Mr Town's letter to ACIL chairman Simon Allen noted that Ports of Auckland was meant to discuss any significant spending that impacts on its footprint with the shareholder.
"It would be council's expectation that during any discussions with POAL regarding changes to the port's footprint, ACIL would consult with Auckland Council as to our view on the proposed changes, and to convey those views to POAL," Mr Town said.
It is not known what, if anything, ACIL told the council about the planned wharf extensions, which councillors only learned about in early February. Consents for the extensions were granted late last year.
Graeme Hawkins, chairman of Ports of Auckland, told the Herald yesterday that the company had notified the shareholders of the wharf extensions and complied with the law.
Asked when they were notified, Mr Hawkins said the shareholders would have records of that.
Mr Hawkins said the directors would consider what ACIL formally put to it and respond. The company, he said, has not given any thought to halting work on the extension, where enabling work had started, and main work was due to begin this month.
The council source hinted at changes to the make-up of the ports board, which is not seen as responsive enough to the council's wider objectives.
It is understood that one option is to increase the size of the board from seven to nine members.
The ACIL board will meet today behind closed to discuss the issue of wharf extensions and Mr Town's letter. It is understood this will be followed by a meeting between ACIL and Mr Hawkins and port chief executive Tony Gibson.
Mr Allen could not be reached for comment.
Mr Brown has maintained throughout the public furore over the wharf extensions that the council cannot direct the port company to stop work and, if they do not agree, sack the ports board.
"Auckland Council cannot issue a binding management directive to the port company either directly or through ACIL," Mr Brown told the Herald last month.
Mr Town's letter requests that ACIL "encourages" the port company to hold off work on the extensions.
Yesterday, a council lawyer said neither the council or ACIL could give the port company a binding directive.
That was in the company's constitution, which could only be changed with the permission of the Minister of Transport, the lawyer said.
New Zealand Shareholders Association chairman John Hawkins said it was disingenuous of Mr Brown and other people to claim the council could not direct the ports company to take a particular action.
"This goes to the very heart of company ownership, regardless of whether a company is private, council controlled or listed on the sharemarket.
"Shareholders appoint the directors to act on their behalf. Directors are required by law to act in the best interests of the company.
"Usually this would coincide with the interests of the shareholders. However, if the shareholders were unhappy, they do have rights enshrined in both the Companies Act and the Port company's constitution," Mr Hawkins said.
He said that the council, as 100 per cent owner of the port company, has the final say.
"If a board, ports in this case, decided to ignore their shareholders concern, then the shareholders have the power to pass a resolution dismissing and replacing the directors.
It is not an action to be taken lightly, and depending on the structure it may take time, but ultimately that's what shareholders have the power to do," Mr Hawkins said.
Labour's Auckland issues spokesman and Mt Roskill Mt Phil Goff, who is considering contesting the Super City mayoralty next year, said: "A clear statement from Auckland Council that it does not want Bledisloe Wharf to encroach further on the harbour should be sufficient to stop the extension of the wharf and further reclamation.
"The directors of the ports are appointed by council. If they were to thumb their noses at such a council directive, they can and should be replaced," Mr Goff said.