Should the coun­cil sell its port shares?

CHB Mail - - News -

Hawke’s Bay Re­gional Coun­cil is ask­ing the pub­lic whether it should sell al­most half its shares in Napier Port, with of­fi­cial con­sul­ta­tion doc­u­ments be­gin­ning to ar­rive in peo­ple’s let­ter­boxes.

It’s a ques­tion that’s cre­ated plenty of con­tro­versy, with a pe­ti­tion al­ready started for the fi­nal de­ci­sion to be made by pub­lic ref­er­en­dum, and two coun­cil­lors vot­ing against the HBRC pre­ferred op­tion of sell­ing 49 per cent of its shares in the port. A for­mer CEO of Port Taranaki says it is not an un­usual ques­tion for coun­cils to have to ask. Roy Weaver, now a New Ply­mouth coun­cil­lor, said ports tended to need large one-off pay­ments, the cat­a­lyst for coun­cils hav­ing to look at own­er­ship mod­els.

“You have your nor­mal in­come and oper­at­ing ex­pen­di­ture and that’s fine. But ev­ery so of­ten you’ve got to spend $15 mil­lion on a tug, or $70 mil­lion on a new wharf, or you’ve got to spend $150/$200 mil­lion on a wharf and break­wa­ters.”

“For re­gional ports in par­tic­u­lar, hav­ing that nar­row base of share­hold­ers can be a dis­in­cen­tive to ac­tu­ally rais­ing that money.”

Napier Port is go­ing through the con­sent process to build a new wharf be­cause it is now turn­ing away both cargo and cruise ships.

The new wharf has an es­ti­mated cost of $142 mil­lion.

Weaver said Hawke’s Bay had an ex­cel­lent ex­am­ple of how a mixed own­er­ship model could work, up the road in Tau­ranga.

“It is 55 per cent owned by the coun­cil and 45 per cent from list­ing on the share­mar­ket.

“It’s been a won­der­ful in­vest­ment for the coun­cil to sell its shares.”

For­mal con­sul­ta­tion on the Napier Port own­er­ship opened yes­ter­day , with con­sul­ta­tion doc­u­ments be­ing mailed to 70,000 house­holds across Hawke’s Bay .

HBRC’s chair­man Rex Gra­ham said the coun­cil had been work­ing on the pro­posal for the bet­ter part of two years, and now it was time for the pub­lic to have their say.

“We have an open mind. We’ve been very trans­par­ent about this process and the op­tions and we now need to hear from the peo­ple of Hawke’s Bay.”

The coun­cil has come up with four op­tions to con­sult the pub­lic on.

Its pre­ferred op­tion is Op­tion B, which would see up to 49 per cent of the port sold on the New Zealand Stock Ex­change.

The full con­sul­ta­tion doc­u­ment will start ar­riv­ing in ev­ery let­ter­box in Hawke’s Bay cov­er­ing the new wharf and the cap­i­tal rais­ing op­tions.

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