The decision yesterday by the Cabinet to confirm that Auckland’s port would have to go was as much about politics as economics.
Prime Minister Jacinda Ardern told her weekly post-Cabinet press conference that Cabinet had agreed that Auckland port’s future as an import port was not sustainable in the long term.
That means the port has no future because it is not an export port.
Now the question will be whether it goes to Whangarei; a move that could save NZ First by allowing Shane Jones to win the Northland seat.
But the politics are not as simple as that.
It is likely now that the Government will ask a big-name business leader to facilitate negotiations between the Tauranga, Auckland and Northport companies to try and arrive at a commercial decision on the future of ports in the Upper North Island.
POLITIK understands that such a person has been identified and is willing to lead the negotiations.
It is also likely that the Infrastructure Commission, chaired by former Reserve Bank Governor, Alan Bollard, will investigate the technical and economic aspects of shifting — particularly the road and rail issues.
The port of Tauranga, the country’s largest port, will be key to these negotiations.
It is 54% owned by the Bay of Plenty Regional Council and 46% by public shareholders; in turn, it has a 50% shareholding in Northport.
Auckland Port is owned entirely by the Auckland Council.
The Cabinet decision follows on a report on the Upper North Island Supply Chain which was prepared by a group headed by Northland businessman, Wayne Brown.
Infrastructure Minister Shane Jones is to release the report on Thursday.
But last night Brown had not been briefed on the Cabinet decision and said that, ironically, his contract ended yesterday anyway.
Brown is a close friend of Jones, and the report honours a promise in the coalition agreement to prepare a report on the feasibility of Whangarei replacing Auckland port.
Brown’s report supports that idea but making it work will be difficult and will face a number of political challenges..
The Auckland Council and the Auckland Employers’ and Manufacturers’ Association have opposed the port leaving Auckland.
And from within the Labour Party, there is also opposition.
The Maritime Union of New Zealand — which includes watersiders — is said to be opposed.
At the beginning of November, the Prime Minister and Workplace Relations mInister, Iain Lees-Galloway met with the union’s National Council.
The question of the future of the port would surely have come up at that meeting.
The problem that NZ First have is that many supporters of the decision to close the Auckland port do not support it moving to Whangarei.
National believes the proposal that it should is because New Zealand First believes the plan to shift could help it win the Northland seat and thus secure a route back to Parliament.
That could also be attractive to Labour.
“It’s a good question to ask about the long term,” said National’s Infrastructure spokesperson, Paul Goldsmith.
“And we’re open to discussion.
“But we want to see the detail.
“We want to see the business case.
“And what we don’t want is to have massive infrastructure decisions made on the basis of some backroom deal between Shane Jones and the Prime Minister.”
Infrastructure NZ CEO Paul Blair, speaking three weeks ago, pointed to the way Melbourne had considered the future of its port. (Which is as big as all of New Zealand’s ports combined.)
Infrastructure Victoria, the state’s equivalent of New Zealand’s Infrastructure Commission, led a detailed and independent assessment of Victoria’s port strategy in 2017, which considered a new port to supplement or replace the existing Port of Melbourne.
“Infrastructure Victoria highlighted two critical factors for an efficient and effective port, based on global best practice; ports should be as close as possible to their customers to minimise land transport costs and have a balance of imports and exports to avoid the costs of shipping empty containers to the next port,” said Blair.
“We have major questions that we expect a future Better Business Case would fully consider.
“Additional freight costs need to be fully addressed; 80% of Ports of Auckland’s goods are currently delivered by truck within 20 kilometers of the port gates.
“Even if 70% of freight arrives back in Auckland by rail, it will arrive at an inland port somewhere in West Auckland and still need to move 20-30 kilometres to its final destination.
“If Ports of Auckland is forced to close and the Government builds a new port 140 km north, how confident are we that freight companies will go to Northport?
“Second, if Ports of Auckland is forced to close and the Government builds a new port 140 km north, how confident are we that freight companies will go to Northport?
“Shipping companies will go to ports where they can balance export and import loads to minimise the number of vessel calls. Northland does have a growing export base, but it is substantially less than Auckland’s import volume. Even if the freight did follow the investment to Northport, we may all be paying much more to have empty containers moved from Northport to our main export port in Tauranga.
“We need to understand who pays for this move and who benefits.
“If Aucklanders want a low-density parkland waterfront, are they willing to pay for that in higher rates, taxes, and higher costs on their goods?
“Lastly, each of the ports in question (Auckland, Tauranga, and Northport) have different ownership and governance structures. Taxpayer investment of $10+ billion will produce costs and benefits for individuals, councils and private investors.
“Rationalisation of the governance of our ports would be complex but must be considered given the amount of money involved.”
Blair’s statement might point to the proposal advanced by the Port Future Study group in 2016 which proposed that a super-port be built in the Firth of Thames near Orere Point.
More detail will be produced by Jones on Thursday.
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