Mayoral candidate John Tamihere says Auckland Council needs to sell the Ports of Auckland's business operations

Mayoral candidate John Tamihere says Auckland Council needs to sell the Ports of Auckland's business operations
Ports of Auckland's Fergusson Container Terminal.

Auckland Mayoral candidate John Tamihere says the Ports of Auckland’s business operations should be privatised to help ease the financial burden faced by the city’s ratepayers.

Under his proposal released on Tuesday the Super City would still retain ownership of the land the port sits on and the new port owners would have to lease the land back from the council at a “credible commercial rate for up to 25 years”. They would also be expected to develop an agreed exit strategy.

According to the policy proposal, at the end of the lease the site could then be redeveloped for “public and other uses that make the best use of the prime waterfront real estate”.

Auckland Council currently has 100% ownership of the Ports of Auckland and it received an annual dividend from its shareholding of $51.1 million in the 2017/18 financial year.

Tamihere says selling the Ports of Auckland business will provide a much needed cash injection to ease ratepayers’ costs and take away some of the risks associated with relocating the port. And he says it will also future proof the prime real estate the port sits on.

He says it’s important to split the business from the land to ensure the prime real estate never leaves the hands of Auckland’s ratepayers.

When asked how much he thinks the Auckland Council could get from the sale he says that’s yet to be determined.

“But we’ve got to get the best value we can for this asset,” he says.

And Tamihere doesn’t think selling the Ports of Auckland monopoly to private interests will create problems for the City of Sails. Tamihere says there will be enough competition from the Port of Tauranga and Northport to offset any rent-seeking behaviour by the Ports of Auckland’s new owners.

He says there seems to be universal agreement that the port will have to be relocated eventually, but like the Auckland Council and countless commentators, he doesn’t know where.

“The port must move, but exactly where it moves to will be part of on-going discussions,” Tamihere says. “But I have to give clarity and direction so we can all plan for the next 25 years. I have met with major stakeholders, including the port executives, the Maritime Union and transport groups to brief them on my policy.”

He says wherever the port is moved to it will involve a lot of work.

“What we don’t currently have is the infrastructure for a supply channel from Northport [in Whangarei] or the Port of Tauranga,” Tamihere says.

Northport is a 50/50 joint venture company between Marsden Maritime Holdings and Port of Tauranga. Marsden Maritime Holdings is a publicly listed company and its two largest shareholders are the Northland Regional Council (56.3%) and the Ports of Auckland (19.9%).

Along with his privatisation plans Tamihere is also calling for trucks coming to and from the port to work outside of peak hours. He says if an agreement can’t be reached within 12 months he will use congestion charging to price them out of the CBD between 9am and 5pm.

But his proposal hasn’t gone down well with Road Transport Forum chief executive Nick Leggett.

“Why would you increase the costs of transporting goods in and out of New Zealand’s major city? This proposal would definitely add costs to all the goods in people’s lives that are transported by trucks – which is pretty much everything,” Leggett says.

“And what about all the workers involved in transporting goods, not just the truck drivers, who would then have to work through the night to accommodate this? Firstly, there are health and safety concerns with that; secondly, there would be extra costs that would be passed on to end consumers; and thirdly, extra costs would impact on the ability for New Zealand’s export goods to be competitive in a tight global market. Let’s not forget, exports are the lifeblood of the New Zealand economy.

Leggett says a congestion tax, which may be a good idea, should be paid for by all road users so it is fair and equitable.

But Tamihere won't backing down any time soon and says he’s talked to a number of people about his proposal which he plans to implement if he wins the Super City mayoralty, including Infrastructure Minister Shane Jones.

And his call to privatise the Ports of Auckland’s business operations wouldn’t have gone unnoticed by the NZ First MP who has previously stated his commitment to seeing the Ports of Auckland’s operations shifted to Northport.

But before that can happen the rail network north of Auckland would need to be upgraded to handle the massive amounts of freight that would be involved. And in March Jones said it would costly.  

Tamihere’s comments follow the release last month of the Upper North Island Supply Chain Strategy working group’s interim report. The Government established the 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 in Whangarei.

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 and states:

“Capacity will constrain the port’s ability to meet future freight and cruise [ship] demands, which may limit economic growth in the long term. Tension between, and competition for, limited resources for the CBD and POAL will lead to sub-optimal outcomes for one or both.”

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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12 Comments

Absolutely dreadful idea. Sell off another prized asset to pay for today's bills ? If you ran your personal finances like that your friends would be pitying you and your parents shaking their heads. I hope this chap reflects on this idea and realises the error of his ways.

There are possibilities here. The land stays with Auckland city. If the port enterprise to lease that land were to be sold to the Whangarei or Tauranga ports (or both) in exchange for shares it could be a graceful and profitable return of the harbour to the people of Auckland.

That’s the standard technique of privatization: defund, make sure things don’t work, people get angry, you hand it over to private capital

Sell family jewels to pay for short term debt incurred from the lavish lifestyle.
Bravo Einstein!

Finally a candidate talking sense. He'll have my vote as no actual liberals/conservatives seem to gain traction for the mayoralty. The council has no business running a business like this.

To the doubters: has the privitisation of Telecom and Air New Zealand not been a roaring success?
Let Ports of Auckland compete with Port of Tauranga properly, not under the weight of council bureaucracy.

air new Zealand was rescued by the government from going under when it was fully private, telecom had to be split into two companies spark and chorus to make any headway, why not also mention rail that was asset stripped , the examples you should have used are the power companies, and auckland airport( a monopoly) that have gone onto better things once the government sold them.
as for ports of auckland I used to own some shares before mike lee brought them back and yes I agree with JT
I also think that improving the rail to northport and the government buying a piece of northport to get it away from POT and POA will add competition, both own it to block any real plans for development

Rail is a bad example because it's in competition with roads - paid for by the taxpayer.

Air New Zealand and Auckland Airport have real, private competition (AIA may be a monopoly on international travel to Auckland, but it's in competition with other NZ airports and Australian/Asian international airports for some routes as well).

PoA would also have private competition in the form of Port of Tauranga.

I am all for moving the port, the question is where to go.
Northport needs to be built and makes no sense as almost all of the cargo has to go south of the bridge, the Mount can't handle much of it without major investment. Splitting it would mean two sets of port machinery and upgrading/building 2 rail lines and road structures. I can already see the lawyers licking their lips, just the sheer thought of the thousands of objections and court cases makes them salivate.
Major Auckland based importers might be forced to move to where the port is going, there may not be too many people left to be mayoring over. At least the house prices will drop.
Don't know who in his right mind would want to pay the exorbitant price they think it will fetch, whatever it might be, to prepare for abandoning it all in 25 years time and not owning the land. Other then the first 5 or so years it would attract no investment for the remaining part of the time frame.
If it is cheap enough it may offer a return over the 20 or so years of real operation after that you would need to start shifting functions to be gone in 25 years and that will be a cost faced by the owner of the installation.
(read in all this: costs to be passed on to the importers and exporters, ultimately the NZ public)
Apart from that, the extra transport to get it to the big smoke won't assist with getting to Carbon Zero.
More wind and solar? More public objections.

Nobody yet pointing out that all shipping is fossil fuelled. And that therefore the time-line is limited. Even if we went through the remaining 2 trillion barrels without our financial system falling over (below an EROEI of 8;1 it's toast, and it probably is already anyway due to debt-overhang) that's only 3-4 decades. Why such lack of understanding this late in the piece?

Wind worked in the past and could do so again. Add a few solar panels for electric motors when needed.

However I can see not solution for aeroplanes - mass tourism via airship???

Solar powered Zeppelins!! Now we're talking.

If it would be a such a "burden" for taxpayers probably no private company would like to have to deal with that right?