Troubled Auckland port caught between a rock and a hard place

OPINION: No one close to the highly sensitive discussions about the future of Auckland’s port is happy that news of those talks leaked to the media last week.

The port has a nasty habit of attracting 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.

However, Auckland mayor Phil Goff made shifting the port part of his election platform. He is stuck with the promise at a time when the city he leads needs major investment in both new and old public infrastructure.

However, the city’s debt is hitting limits that would threaten its AA credit rating, constraining Goff’s ability to borrow.

Its preferred fund-raising options have fallen on deaf ears. A regional fuel tax is opposed by the Government, while sophisticated congestion charging 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 talks.

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. 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 to release 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 is having a week off