100pc con­trol of ports needed for bal­ance

Hawke's Bay Today - - Opinion - By Gren Christie

"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.

Gren Christie says we need 100 per cent con­trol of the port.

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