No smooth sailing for port
OPINION: No one close to the highly sensitive discussions about the future of Auckland’s port is happy that news of those discussions leaked to the media last week.
The port has a nasty habit of becoming a lightning rod for negative publicity and the leak shows just how many enemies it has.
At the heart of the enmity is the port’s handling last year of its need to extend berthing for large cruise ships, and its desire to push wharf space further out into the Waitemata Harbour.
The cruise ship industry is only just realising how serious this is. Aucklanders will soon hear much more about the lost opportunities that loom if larger ships can’t use Auckland as a major switching point for international passengers who leave and join cruises through the city’s international airport.
Last year’s report into possible relocations didn’t solve anything, since both the alternatives – the Manukau Harbour and the Firth of Thames – would be fraught with resource consent, user, iwi and community issues.
There’s another snag. Auckland’s cargoes are mainly imports, with most freight delivered in a 35 kilometre radius of the port. Relocation is inherently inefficient, adding cost, carbon emissions and requiring upgraded transport links.
However, Auckland mayor Phil Goff made shifting the port part of his election platform, to the delight of a vocal Auckland lobby that sees the current port as an eyesore on prime real estate for an expanding city.
He is stuck with the promise at a time when the city he leads is bursting at the seams and needs major infrastructure investment.
However, the city’s debt is hitting limits that would threaten its AA credit rating, constraining Goff’s ability to borrow.
When the Government offered $1 billion in infrastructure loans fund last year, Auckland didn’t bite because it didn’t want more debt on its books.
Its preferred fundraising options, meanwhile, fell on deaf ears. A regional fuel tax is opposed by the Government, while
Auckland mayor Phil Goff is stuck with his election promise.
sophisticated congestion charging that would raise money while better managing Auckland’s traffic snarls is years away.
Instead, the Government prefers a carrot and stick approach: it will help Auckland more directly, but only if Auckland shows it is willing to pay its share. Cue the port sale discussion.
For months now, both the port and the council’s finance staff have been working up proposals to split the port into two companies – one owning the land and the other owning the contracts to handle cargo. Auckland Council would keep the land but sell the operating company.
That solution’s appeal is that politicians could dangle the prospect of eventually moving the port elsewhere.
The problem is that for anyone to pay a decent price for the operating company, it will need a long lease on the land where the port sits.
The Port Futures Study suggested 35 years-plus. Australian ports that have done this already were sold with 99-year leases. Clearly, that’s longer than port move lobbyists will be willing to wait.
No clear solution presents itself, but the city’s need to release capital for other priorities is clear.
So, too, is the port’s desire to rebuild its fractured relationship with Aucklanders and, if at all possible, stay put. In that sense, the answer may lie more in the port’s than the mayor’s hands.
What can the port offer that would placate sufficiently its critics both to free up more waterfront and some handy loot for the city, while securing its future on at least most of the current site for the foreseeable future?
Watch this space. Michael O’Donnell’s column returns next week