100pc control of ports needed for balance
"Only by the public ownership model can we find a balance between port users, our ratepayers’ desire for a fair return on their asset and ensuring the port has enough retained capital to go about its business . . . "
The HBRC is proposing a privatisation of some sort of the Hawke’s Bay owned Port (partsale or 50 year lease). This would be the worst outcome for all but in particular growers and farmers.
I don’t lightly accuse the chairman of HBRC of spreading fake news but he does seem to be spreading it rather thickly.
In particular is his repeated statement that selling a minority stake in the Hawke’s Bay Port would mean the community of HB would still retain control of their strategic asset.
Not true.
A 55 per cent majority shareholding is not control.
Under commercial law, Ports must act in what is deemed the best commercial interests of the business.
Private investors can insist on that backed up by commercial law.
The dividend return will come first. It won’t matter if the likes of orchardists or farmers are having a hard time.
Hail one year, late frost or drought the next.
They will still be in the firing line if it’s in the commercial interest of the port to put up the port users’ charges.
Shane Jones didn’t understand this when he tackled Air NZ about no longer providing a service to some of our smaller regions.
He thought a government majority shareholding would win the day but was told it wasn’t in Air NZ’s best commercial interests and to get lost — which he had to do.
Any private capital demands a commercial rate of return and once they’ve squeezed all they can out of port workers, all they have left to squeeze are port users
We only have total control if we have 100 per cent ownership.
Current directors are under the same obligation to put the port’s commercial interests first but there is wriggle room.
This wriggle room is provided because HBRC can handpick who they choose to be a director.
The board of directors should have a strong make-up of all port stakeholders.
This would cement the argument that the health of our exporters is important for port profits.
This could be achieved by picking the directors with care and, by retaining 100 per cent ownership, the HBRC can quite legally replace directors at will [Port Companies Act 1988].
Only by the public ownership model can we find a balance between port users, our ratepayers’ desire for a fair return on their asset and ensuring the port has enough retained capital to go about its business and not be pressured into mistreating the people who keep the whole thing working.
We have also been told that the capital required to support some expansion will need to be paid off over 10 years. More fake news.
If ratepayers were to help port users out, our costs could be more affordably spread over the life of the infrastructure. Not just 10 years.
Chairman Rex may feel a little aggrieved at having his fake news pointed out.
I have some sympathy.
People have accused me of fake news when I stated that Lyttelton Port Company had an outstanding financial return the year of the Christchurch earthquake.
In the LPC Annual Report, the CEO describes “having one our best business years despite the severe damage caused by the seismic events 2010/2011”.
It seems hard to believe until you realise that the post-earthquake rebuild needed colossal amounts of bulk materials and ships were the best way to deliver them.
The port was up and running in 96 hours. In Napier, it was less than 10 days.
So not fake news in this case but then again I’m not trying to sell something that doesn’t belong to me.