Sapere report says there’s no need for haste on Auckland port freight decision

By Barrie Saunders (who chaired the Port CEO Group from 2002-2015, and has his own blogsite www.barriesaunders.wordpress.com

The most interesting thing about the Ministry of Transport-commissioned Sapere report on the future of POAL’s freight operations is that, compared with the status quo, all options will add costs to the economy.

However Sapere’s terms of reference required it to assume POAL’s freight operations would have to move sometime, so the question was when does this have to happen and where is best?

A new port at Manukau is assessed as the least expensive option, producing net benefits of -$1,982 million net present value, and the Firth of Thames is the most expensive at -$7,294 million.  Moving the entire freight operation to Northport was estimated to be a net -$6,252 million, Port of Tauranga (POT) a net -$3,703 million and a shared Northport – POT a net -$6,847 million.

Sapere helpfully provides an explanation as to why its conclusions materially differ from those of the Wayne Brown-led Working Group.   A key point is that they took a 60-year perspective rather than Brown’s 30-year.   (See page 15 of the executive summary – Sapere “Analysis of the Upper North island Supply Chain Strategy Working Group Options for moving freight from the Ports of Auckland”.

The good news for the Auckland City Council and the Government is that the decision does not have to be made in a rush.  Sapere thinks we have 10-15 years to make the decision.  Provided it can get the necessary consents, the container terminal may have sufficient capacity for around 30 years.  After that a substantial amount of reclamation will be necessary.

Both the Manukau Harbour and Firth of Thames sites have not yet been rigorously investigated in sufficient depth to be confident that the indicative costs will prove to be realistic.

And it is clear from their report that neither option could likely be consented under the RMA and thus would require special legislation.  This flows from the Supreme Court decision regarding King Salmon (2014) and how the New Zealand Coastal Policy statement affects RMA applications in the coastal marine area.

Significantly, Sapere rejected the argument that Manukau would not work because of its harbour and the dredging that would be required.   They took expert advice which did not agree with this widely held view.  Most ports require some maintenance dredging.  They also said that while the international lines preferred a new port to be in the Firth of Thames, they would make a Manukau harbour port work.

Sapere also rejected the claim that moving the freight operations out of the current site would materially improve Auckland transport problems, because the new activity on the port land would generate its own traffic and the diverted freight would mostly enter the city through other routes.

And they rejected the claim made by the Wayne Brown report that Auckland City would be better off financially by using the land for other activities .

The politics of POAL’s future are extraordinarily complex.  NZ First desperately wants to be seen as a great advocate for Northland to win a seat, while many in the affluent suburbs of Auckland would like to see the port relocated, presumably not to be replaced by high rise office blocks or apartments.

The National Party has not said much.   A majority of its supporters in Auckland want the port moved, but they have not yet seen a definitive cost.   Given POAL is owned solely by Auckland City, the rational response should be to say “go and lobby Phil Goff and co if you want a change”.  The Government should not trample on the City’s property rights.

The Labour Party and Auckland Mayor Phil Goff have many major transport projects under way.  The last thing they need is an extra very complex and expensive freight transport project to deal with.  Auckland City is not able to fund an entirely new port anytime soon, so that cost would fall on the taxpayer.  In that respect Sapere has done them a favour by kicking decision time down the road.

The option not considered is that POAL remains on most of its current site and the marketplace takes care of the freight growth by either greater efficiency at POAL, and or more freight going through POT and Northport.  Maybe given time this option will be seen as practical and affordable.

2 thoughts on “Sapere report says there’s no need for haste on Auckland port freight decision

  1. Ports of Auckland, Auckland Council and their vested interests have successfully made the costs of relocation the issue.

    There is no legislative requirement for Auckland Council to own or provide international port services. Auckland Council could just tell its subsidiary, Ports of Auckland, that it requires $x in dividends. Given its poor business profile and limited options the immediate action would be to cease unprofitable services (eg container handling) and sell surplus plant – cranes, straddle carriers etc. The port is not making money now and next summer when the full effect of limited cruise calls due to Covid-19 hits the results will be disastrous. All the warehousing and distribution jobs and businesses that service Aucklanders will remain – just getting more containers via Tauranga. Why Goff and Co are desperate to hold onto a losing operation and have it inhabit valuable land is beyond explanation in the absence of a legislative requirement to provide a service.

    Moreover Auckland cannot handle the largest ships to call in NZ – game over.

    Close the thing down and leave the market to sort out the options. If there is demand for a new port somewhere it will surface and can be addressed then.

    Ports around the world have found their use by date in downtown – that’s how it is.

    Like

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