Northland Chamber of Commerce chief executive Stephen Smith says shifting the Ports of Auckland to Northport could cost $20 billion and take 10 to 15 years

Northland Chamber of Commerce chief executive Stephen Smith says shifting the Ports of Auckland to Northport could cost $20 billion and take 10 to 15 years

Northland Chamber of Commerce chief executive Stephen Smith says he thinks moving the Ports of Auckland operations to Northport could cost twice as much as estimates suggest and take 10 to 15 years to complete. 

Smith says he doesn’t doubt the Ports of Auckland will eventually have to move and most of the debate seems to be centred around when and how it will happen. But he says upgrading Northland’s rail network, roading and introducing coastal shipping to cater for an upgraded Northport, will be a massive undertaking. And he says shifting the Ports of Auckland would have to be done gradually over a 10 to 15 year period.

“It think that’s the way it would have to be done,” Smith says.

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 last week and recommended closing 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. 

Smith doubts the $10.3 billion cost estimate quoted in an EY report released with the working group report.

“If you are looking at a 10 to 15 year transition how much is that going to cost? It’s probably going to be double that. I haven't seen any of the numbers in depth, but the scope of the work at this stage isn't even complete, so trying to estimate the costs in a report like that isn't realistic."

Smith says we've underinvested in the country's infrastructure for too long and some projects, such as relocating the port, will have a "sting in their tail" when it comes to cost. 

While he thinks the working group's proposal will take time, moving the processing of imported cars from the Ports of Auckland to Northport would be a good start. Smith says Northland has suffered from a lack of development for far too long.

“I don’t think there’s any question of that. The north has so much potential and has for a very long time. It’s time we made the north more productive.”

He says Northport and Marsden Maritime Holdings, which owns 50% of Northport and land around Marsden Point, are perfectly located and could easily expand their operations with the right investment. Marsden Maritime Holdings' two largest shareholders are the Northland Regional Council with 56.3%, and the Ports of Auckland with 19.9%. Northport is owned equally by Marsden Maritime Holdings and Port of Tauranga.   

Regional council watching with interest

His thoughts are shared by Northland Regional Council chief executive Malcolm Nicolson, who says he is waiting with interest to see the working group’s final report and the Government’s response.

“I think there’s definitely more work that needs to be done on how they would transition from one model to the next if that’s the path the Government wants to go down.”

Nicolson says there are a lot of positives to take out of the working group’s latest report.

“I was particularly pleased to see that there was an acknowledgement of the need to have an integrated transport policy in Northland. With Northport we will need really effective infrastructure such as rail, roads and coastal shipping to provide an effective operation.”

And he says some tough decisions will have to be made.

“At some point there will need to be some discussions between the ports and a formal response from the Government.”

Nicolson says if the working group’s proposal does get the green light from the Government he has no doubt it would have positive impact on Northland.  

“If it was to become Government policy it would create huge development opportunities for private sector here.”

Final report within next six weeks

According to Associate Transport Minister Shane Jones, the working group is now 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.

The EY report entitled Economic Analysis of Upper North Island Supply Chain Scenarios, says the absence of a suitable rail network is one of the biggest challenges the working group’s proposal would face. It would require upgrading the rail network between Auckland and Whangarei, as well as the construction of a 20km spur, or secondary line, to Northport at Marsden Point.

“The Northland region does have an existing rail network (the North Auckland Line); 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.

“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."

But it says upgrading the rail network would have wider ramifications for Northport and the Northland region and would deliver direct and indirect benefits to the local area, industries and communities. While 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, interregional, and international markets.

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 going forward 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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I vote we don’t put the Northland Chamber of Commerce in charge,they seem to think 100% overruns are normal.
Is it hard to build a few kilometers of new track and one kilometer of wharf?
Well known costs I would have thought.

... I think the cost will be into the tens of $ billions ... but , don't these giant infrastructure projects create jobs ... thousands of them ... and isn't there a multiplier effect through the economy of spending up big on a worthy project ...

And , ultimately we rejuvenate Northland with a massive cargo port , plus 4 lane motorway into Orc Land ... and turn Ports of Orc Land into a dedicated recreational and cruise ships destination ...

.. the Gummster reckons this is a win / win of epic proportions ...

I admire your style but that bravado only works in Auckland or Wellington.
In the provinces it is strictly on time and in budget.
But we have good engineers and few unknowns, not buying a suburb of Auckland to get it done, it will be fine.

... since 1999 ... from Helen Clark's 9 years ... through the Jolly Kids 8 years ... and now , 2 years into Taxcindas reign of Feel Good , we've had no bravado , no big picture , no vision . . SIGH !

Almost all mega projects go over budget, especially when they have been politicised and have had the costs massaged to get them over the line. Make no mistake a $10B cost estimate is firmly in the realms of mega projects. Also the engineering design would be done out of Auckland then you will have Auckland based engineers move to Whangarei to build it.

Do the provinces in question have the population base to pay for any part of this? Or are you going to be asking Aucklanders to pay for what is essentially theft of an income-earning, publicly owned asset from them?

... central government should pay ... this is a project of national significance ... and they have the most muscle to fund it at currently hysterically low interest rates ...

So instead of Auckland getting the transport to serve the North West housing developments, you want to take that money, give it to another region, stick a regional freight hub in the same North West area with all the traffic and supply chain disruption that comes with it AND you expect Aucklanders to underwrite a third of the cost of stealing an income-earning asset from the Council?

Is that you, Shane?

... never said anything of the sort ... at current interest rates theres money galore... enough for all worthy projects ... I'm appalled at this coalition's anti business / anti car stance ...

And ... please understand what I'm saying , these mega projects benefit the whole country ... central government ought to jack up the funding , not ratepayers ....

Can you tell me how, exactly, this benefits Auckland, to have its publicly-owned port removed and the extra uncertainty added into the local supply chain, as well as the additional costs to freight all of our imported goods from outside the region?

I'm more inclined to go with the CEO of Northport on this one.

It's not just a few kilometres of new track and 1 kilometre of wharf.
The infrastructure between Auckland and Northport will need to be upgraded entirely and a new inland port created somewhere Northwest of Auckland (with all the required connectivity into that).

Do you have a budget for the inland port?
hint.. they are off the shelf constructions..
The rest is daily operations for KiwiRail.

an inland port is just flat land and a rail siding, its does not need major building etc, most of metroport used to be metal and they used front end loaders to load our trucks , its tarseal now which has been done over time as the income was generated.
i think that most people are missing that point.
apart from the rail which will never recover its capital cost, the 4 lane highway to whangarei is needed for many other operations and tourists now.
the port like any port would develop over time, look at how the port of Tauranga developed it has taken years of revenue to upgrade to what it is now.

the government just needs to do the road and the rail and the rest will happen as a natural course of business

The 'inland port' is going in to one of the fastest-growing residential housing catchments in the country. Somewhere. It's going to cost an arm and a leg for the land alone. The Government should be spending that money on giving those people a way to go to work and be productive citizens rather than giving NZ First a blank cheque to campaign on.

Does the new inland port with the new bypass rail link clear space for redevelopment near the city?
My Auckland knowledge is a bit thin.

... I'm with you , cmat ... we need to see the big picture , to overhaul the whole shebang . .

Not to p*ss ar*e around , upgrading few KM here or there . ..

It's far from 'a few kilometres'. The Westfield Junction to Whangarei track is a tad over 200km, according to Quail's 'Railway and Tramway Atlas' (1985 edition) and a Marsden Point spur is 20km. The rail line has 13 tunnels, all of which would have to be embiggened to take containers, numerous bridges and culverts which are on various speed restrictions at the moment because of low to zero maintenance, and would have to be double-tracked to at least some degree if pax traffic near Awkland is to be accommodated.

I'd go with the Northport CEO as to costs: the EY report has not an engineering exercise but a very rough-order economic assessment biassed towards a 'Yes' answer.

Benchmark costs (in $USD....) are of the order of $1m/km for single track on existing rail bed, plus signalling, double-tracking, bridge, tunnel, culvert and crossing work.

A billion here, a billion there, pretty soon it adds up to Real Munny.....

Agreed. Then you're going to need that freight to play nicely with the enhanced commuter running schedules post-CRL. This really isn't as simple as 'laying a few km of track' like some people want to make it out to be.

Ive watched the coal trains weaving between passenger services in sydney, they made it look easy
Only an occasional screaming from the driver

Don't worry about the money! David Parker has just been to China and has a bag of belt and road cash in his bag (and some handcuffs hidden under the cash).

The money inside the bag must be bundled inside a red flag with yellow stars.

nothing is going to happen in a hurry,everybody is in cruise mode till next election when they hope reality will intervene.

Looks like baubles for the Northland region to support Winston and Jones et al getting a Northland electorate seat, the only chance they have of remaining in government.
Problematically for NZ, they are the 'adults in the room' in the current government. National are unlikely to win the next election, so if Winston fails to win a seat we would end up with a straight Labour/Greens government.