Should the council sell its port shares?
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.