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Closing the Ports of Auckland and moving its operations to Whangarei would cost $10.3 billion according to EY report  

Closing the Ports of Auckland and moving its operations to Whangarei would cost $10.3 billion according to EY report  

Shutting down the Ports of Auckland to shift its operations to Northport near Whangarei would cost $10.3 billion according to a report by EY.

The Government established the Upper North Island Supply Chain Strategy working group last year to look at the development and delivery of freight and logistics in the Upper North Island. It has also been tasked with investigating the feasibility of relocating the Ports of Auckland to Northport near Whangarei.

The working group’s second interim report, which was presented to the Government in August, was released on Thursday and recommends the managed closure of the Ports of Auckland and shifting its operations to Northport.

It says this would provide the greatest level of benefit to the upper North Island and New Zealand. According to Associate Transport Minister Shane Jones the working group is expected to provide its final report to the Government in the next four to six weeks. It will include recommendations on infrastructure investment, as well as outline future challenges and key steps that will need to be taken over the next five years and beyond to implement the plan.

Economic analysis

An accompanying report by EY titled: Economic Analysis of Upper North Island Supply Chain Scenarios states:

“Auckland would benefit from a relocation of its Port freight facilities in a number of ways. Auckland Council and ratepayers would be financially better off if the Port site was redeveloped. Presently, Ports of Auckland Limited (POAL) delivers a dividend to the Auckland Council of around $50 million per annum. An alternative land use for the port site has the potential to generate rates and leasehold income in excess of the current POAL dividend.”

But it wouldn’t be cheap. The report estimates it would cost $10.3 billion to shut the Ports of Auckland and relocate its operations to Northland as recommended by the working group.

“The absence of rail network is one of the biggest challenges which, if addressed, will have material impact on the development of Northport and Northland region as well as helping maintain other transport infrastructure, especially roads.

“The Northland region does have an existing rail network (the North Auckland Line — NAL); however, it has been under maintained, and has seen no significant investment in the last 50 years. Consequently, the line is no longer fit for purpose and cannot meet modern requirements for transportation of freight and passengers. Restricted tunnel heights prevent Northland exporters from utilising rail to move modern high-cube containers to and from Auckland.”

An upgrade would require the upgrade of the whole line between Auckland and Whangarei, as well as the construction of a 20km spur, or secondary line, to Northport at Marsden Point.

“Furthermore, lack of maintenance and the ageing of structures and tracks has forced speed reductions. Additionally, older, less reliable trains and equipment have to be used on the line due to weight restrictions, further lengthening transport timeframes and increasing inefficiencies.

“Northport is now one of the only ports in New Zealand without a rail connection. These conditions and restrictions have necessitated the transference of over a million tonnes of freight to road transport per annum. Rail is currently an infeasible option for businesses to move freight in or out of Northland.

“Investment and renewal of the North Auckland Line (NAL) (which is currently being subjected to a separate MoT business case) and Northport connective link has the potential to substantially alter freight flows within the UNI, support a portion of the trade from international markets to and from Auckland, and bolster the nation’s international trade growth.”

Greater economic development 

But it says relocating the port to Northport could be a catalyst for greater economic development in Northland, “delivering direct and indirect benefits to the local area, industries and communities”.

“Available industrial land near the new Northport site could be used to develop industrial parks and production facilities, stimulating additional economic growth in the local area.”

While an upgraded rail network would give local businesses within the Northland region better access to regional, inter-regional, and international markets.

“An improved rail line could bring cruise ship passengers docked in Auckland further north, improving their experience and brining money to Northland. Investment in Northland infrastructure would have a positive cultural impact as this will support Māori enterprises across forestry, agriculture and fishing sectors, as well health and community services.”

Auckland's investment

Auckland Mayor Phil Goff says the working group will need a strong business case and the necessary funding to proceed with any plans to shift the Ports of Auckland’s operations to Northland.

The Ports of Auckland is 100% owned by Auckland Council and last year paid a dividend of $51.1 million. The returns are projected to decrease markedly over the next couple of years as the port automates its operations. But last year it spent $60 million on three cranes from China as part of its capital investment programme.  

“Like most Aucklanders I am in favour of moving the port, but we won’t simply give away our assets built up by ratepayers over generations,” Goff says. “Aucklanders have invested $600 million in the port and we aren’t going to give it away for nothing. They are talking about taking away the value of our port company, but what are they going to give us in compensation?

“They need to make a case that Northport is the right choice,” Goff says. “Relocation needs to stack up economically and protect the interests of Aucklanders. It will also need to be undertaken with industry support and without imposing additional economic and environmental costs on Auckland businesses and consumers from freight being moved over much longer distances.” 

National's response

National Party transport spokesperson Chris Bishop says it has an open mind about shifting Auckland’s port long-term, but is sceptical about the process underpinning the latest reports.

“This looks like a political play by Infrastructure Minister Shane Jones to succeed in the north, and the worry is that this process is heading towards a pre-determined outcome. These decisions need to be based on sound economic analysis of what is best for the economic future of the upper North Island, not what best suits NZ First’s needs.

“There should be a proper process in place for these decisions to be made through the new Infrastructure Commission. I also wonder if the left hand is talking to the right hand. If you’re going to divert shipping, freight and logistics to Northland then a four-lane motorway between Whangarei and Auckland will be needed to unlock Northland’s economic potential."

Politics aside, a lot more work will be need to be done before any managed closure of the Ports of Auckland goes ahead and its operations are shifted to Northport.

In 2016 the Auckland Council formed a working group to look at the long term options for the Ports of Auckland. The resulting Port Future Study said that the port would face problems in the future due to its location. The report identified two potential locations for a new port at either the Manukau Harbour, or the Firth of Thames, which it said should be investigated.

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the first thing that needs doing is a 4 lane highway all the way to Whangarei followed by upgrading the rail.
the rest will happen naturally as the Marsden point will be on the same footing as the port of Tauranga and can start to compete with the port of auckland for ship visits

I think that's already 'on the go' judging by all the motorway relocation work that's going on to bypass the Brynderwyn's. The new motorway won't follow todays Highway 1 but will skirt around the back. It's being built from both ends, today.

4 lane highway is the last thing the north needs. Keep your overpopulated congested mess contained where it is thanks. 4 lanes would be the death knell of beautiful northland.

It's coming! Shane told us so at the Election...

The rail won't just need to be upgraded. There will need to be double tracks all the way down to Kumeu, then an extra track south of there. Otherwise, all the freight trains will be fighting for space with the passenger services (which the government wants to increase).

The rail is so run down there's a $94m package that recently announced to stop the yards and buildings from falling into total disrepair. There's also the issue of the tunnels which literally can't fit containers through them. The costs for upgrading were over $500m several years ago and I can't imagine that has gotten any cheaper.

I think that it would be on a far better footing than Tauranga. It is near enough to half the distance away.

Much as I hate the eyesore the Port needs to be in Auckland because NZs biggest population is in Auckland. The freight cost of shipping everything down from W is a cost only the consumer will bare.

Won't the "carbon footprint" be huge due to the need to truck everything between Whangarei and Auckland?

Heavy rail would fix that.

The headline says it all, bad move!!!!

Why would you drop off you load at Whangarei just to transport it overland to Auckland, when you have a port in Auckland.
Slower and less efficient as you offload container from boat, put on train, offload in Akld, put on truck to final destination. Currently offload container from boat, , put on truck to final destination

Beyond Stupid!

over 1/2 the container into auckland are already moved that way, they are moved by rail to onehunga by the biggest container trucking co (owned by the port of Tauranga), or out to wiri by the other big trucking co owned by the ports of auckland
its only the smaller guys that still send all their trucks to the port so they are at a disadvantage as they are less efficient

How are you going to move vehicles? ROROs drop off hundreds of vehicles at a time. And you then have to add extra freight costs to every single item. What do you think costs more? Spending hundreds of millions of dollars on more branch line to then stick it on a train to then get it to a DC to then put it on a truck....or just putting it on a truck? I'm no supply chain whiz, but one of those things is going to cost a shitload more than the other does, and someone will have to pay the extra cost.

If the port moves to Northland how will containers be shipped through Auckland? Even if the rail line is upgraded will the rail line be upgraded through Auckland or will it be on the same line as the commuter trains now? This report does seem to be a Winston/Jones special.

yes they will need to upgrade
the long term plan
they will sent up an inland port out west for all the shore and west containers,
as containers from Tauranga will also be railed there
the rest will go through to metroport or wiri inland ports depending on the shipping line

the point being the last leg of the delivery (truck ) will be a short trip

The 'out west' bit is total shit, sorry. The area is already totally congested. Now you're going to run the entire region's freight out of the bit of the city where there's literally no alternative to using the motorway? The North West is also taking on a huge amount of the housing burden in Auckland - that land is worth far more than it used to be and you're talking about sticking a regional freight centre in what is going to end up being a residential area. It's totally unfeasible and unworkable. Not to mention the impact on post-CRL commuter rail on the North Western line and the destruction of part of the route required for LRT in the process. But this isn't actually about credible solutions, it's about NZ First getting a blank cheque to buy a seat and POT leveraging the opportunity to take out a competitor.

Ridiculous to even contemplate moving the port to Whangarei.

A lot of Auckland's growth is coming in the North shore where there is far more land available. It is becoming more and more of an industrial/commercial center, and would only be ~90 minutes from Marsden if there was a decent 110km/hr motorway built. Personally I favor a submersed tunnel (steel tube) in the shallow water out 1.5km to Pakihi Island and then 1.5km more to sparsely inhabited Chamberlains island south of Waiheke (another 1.5km would get to Waiheke too). Deep water port off back of it. Selling CBD port land would more than pay for tunnel+port construction. (3km of 7m diameter steel tunnel is only abut $100million)

Last time I checked, the North West was taking on far more development than the North Shore, which is a relatively small industrial area hemmed in by housing in all sides.

It’s really not a difficult equation. Auckland is our largest city. We also need somewhere that has a deep channel, and is protected. Ideally the area should be close to rail. To even mention Whangarei shows just how out of touch WP is with reality.

Move vehicle ro/ro ship handling to Northport.Create a vehicle logistics centre on the vacant land around the port. Compliance for used vehicles. Plenty of land for storing the cars. Sydney moved all of their vehicle imports 80km south to Wollongong years ago. Works fine. Storing cars in the CBD is not cost effective. The majority of the vehicles new or used need to be moved off the port in Auckland to other storage sites in Auckland then moved again to car yards and compliance centres once they have space or customer orders. Marsden point could offer on site vehicle compliance and long term storage on the expanded port land. Cars and vehicles could come 150km over night via road to Auckland when there is less traffic. Delivery direct to dealers yards etc as required. No double or tripple moving. Bledisloe wharf could then be returned to use as a container terminal. As it was before POAL sold off their car wharves to ACC and Government to defuse their last debt bomb. ACC and POAL will not want to give up any business though.They have invested in a parking buiding for the cars and fancy new cranes and straddle carriers for the containers.

Looks like at least 3 big truck parks are in the offing just north of Ruakaka. It's just vacant land at the moment but I believe it's been approved for the parking you suggest.

Yes. $10.3b seems like a ridiculous boondoggle, most of which would be spent recreating existing port/road/rail infrastructure that already exists in Auckland. Much better to gradually add extra capacity elsewhere at much lower cost and get some redundancy-in-case-of-disaster as a bonus.

$10bn pretty much the total ATAP shortfall to actually make almost all of Auckland's transport in the 30 year plan actually happen. Instead it's being spent to take away a public asset and introduce a bunch of supply chain uncertainty into our regional economy. It's flagrant pork-barrelism from a Government who has shown a total disdain for proper analysis and is prepared to use Auckland as a whipping boy to shore up political support for a coalition partner in the regions - or one region, specifically.

Remember how the Nats got widely mocked from promising 10 bridges? Yet stealing a port from your biggest city? That's totally fine.

Also 'overnight delivery to car yards' - cool, what's the added cost of keeping skeleton staff on throughout the night at a yard or dealer DC to receive vehicles at night? You've just multiplied the mileage component of that cost by about 15x vs. the current system. Who pays that? Why should Auckland businesses pay all this additional cost that they will then need to recover from other Aucklanders because New Zealand First wants to buy a seat in Northland?

The lead-time isn't there anymore.

Has Jones noticed what is happening in the world? The venerated institution of democracy is on it's knees, trade is falling off, the decades-long RE ponzi is about to burst. Yet growth is still an unchallenged assumption.

Those who stand back and ascertain, can tell you that before anything is up and running, the game is all over.

Type 'World3 standard run' into your search engine. Study it well.

I sympathise and we should can the Auckland light rail immediately, it’s a fantasy as it stands.

Yea, we should continue to lose billions a year in congestion in Auckland because building something to actually deal with it is a 'fantasy'.

As with all these things, they take twice as long and cost twice as much whereas the income won't be close to report expectations.
The report criteria were such that only Northport was going to be the feasible option. Wonder why.
A study of such limited scope is not worth the money spent on it.

What would be the value of land released by shifting ? Will it be far more than $10 billion ? Even if it is 50% , it may be worth it, to make downtown Auckland more beautiful and livable. And get a brand new, modernised, future ready port elsewhere. The boost in new activities may bring economic revival. Let us examine this in detail.
'Out of the port' thinking may be good.

POT shows this model works fine. Upgrade the rail, put an inland port out by the Airforce base somewhere, and service Awkland from both sides, and redevelop the waterfront. There was a great concept for a stadium and office park. Turn Eden Park into a school or something useful. While were at if move the navy as well, and let civilian flights in the air force base so it can leverage the new industrial area.

Great idea to re-develop the existing port land but I seriously question using it for a stadium, A stadium is just a great big lump of an eyesore. All it's focus is inward with little or no functional interaction with it's surrounding. You could put it anywhere in the city, and from the experience of the user it would not matter, except that ease of transport would be relevant. When I consider redeveloping the port land I think of something like South-bank in Brisbane, where families can go and have a picnic on the sea shore, swim, canoe and paddle like Mission Bay. Hospitality, arts and entertainment stepping back from this and beyond that apartment accommodation and high end holiday hotels. It would be really great and right in the centre of the city. How cool is that. It would also form the perfect backdrop to receiving cruise liners. Does a stadium fit in this image - just a big inert blob, used perhaps 4 hrs a week or 4% of the time. Isn't there enough old railway land over the other side of Quay street beside Vector Arena for a stadium. You may have to fiddle around with the roads a bit, but not a biggie?

they could probably have upgraded part of the rail to whangarei for the amount that these reports have cost in money and time.

There is an alternative that should be considered, this one keeps the freight demand in Auckland saving 1 Billion dollars annually moving the cargo to Auckland from Whangarei and empties back to Whangarei