Port of Tauranga handles near-record import surges but red tape is slowing progress with expansion plans

As New Zealand’s largest port, Port of Tauranga is  playing a vital  role in keeping cargo moving throughout the global disruption and local upheavals caused by the Covid-19 pandemic.  And  it  has  ambitious  plans, which  would  strengthen   its  key  place  in  NZ’s  transport  system.

Fortunately  for our export industries,  the  port  overcame the  effects  of  the pandemic’s impact on the international supply chain which  included extensive shipping delays, service cancellations, scarcity of supply and volume volatility.  This has led to congestion in the container terminal and at its MetroPort facility in Auckland.

The situation was at times exacerbated at times by operational challenges at Ports of Auckland, particularly in the first half of the financial year.

While  there  were 106 fewer container vessel visits between September 2020 and June 2021, the average cargo exchange per container vessel increased 21.7% due to the reduced vessel frequency and shippers maximising available capacity. Continue reading “Port of Tauranga handles near-record import surges but red tape is slowing progress with expansion plans”

Ports of Tauranga deserves plaudits for its performance in Covid-troubled times

The  latest Covid lockdown  has   delivered  a sharp  jab  to   many  NZ businesses, but  not what they had  been encouraged to think our wellbeing-focused government  was  planning  for them.   It  has  taken  the  gloss  off  what  might   otherwise have been regarded   as a  strong  reporting  season  for NZX-listed  companies.

The spike in coronavirus cases has led to NZ falling 26 places in Bloomberg’s Covid Resilience Rank.

We  had been the longest-running first-ranked country on the Bloomberg watch-list, since the inception   of the ranking  in November 2020. The plunge follows the spread of the Delta variant in Auckland and Wellington, which (when we checked yesterday) has resulted in 347 people testing positive for the virus across Auckland and Wellington.

Prime Minister Jacinda Ardern says lockdown is starting to work  and  she   insists   she is  acting   on  the  “best advice”  in  keeping  the  whole country  locked  down until  Wednesday,  when  there  will  be  a  slight  easing  with the  rest of  the  country  south of  Auckland moving  to level  3.

NZ is now ranked 29th on the Bloomberg ladder, two places above Australia which announced 1000 new cases on Thursday – Australia’s worst day of cases since the pandemic began. Continue reading “Ports of Tauranga deserves plaudits for its performance in Covid-troubled times”

While we wait for Jones to further curry favours with our money, let’s check out this $40m investment in the Waikato’s wellbeing

We are sure we haven’t heard the last of Shane Jones and what remains of the $3 billion Provincial Growth Fund from which he distributes big bucks to boost regional economies while hoping (we are sure) to be remembered fondly when people cast their votes.

But it wasn’t Jones who announced the Government is investing $40 million to develop an inland port at Ruakura.    This news was delivered by Urban Development and Transport Minister Phil Twyford and (doing good things with public money for her home patch) Māori Development Minister Nanaia Mahuta.  No doubt both ministers will be hoping this largess is translated into votes, particularly the Maori vote.

The inland port – a project in which Tainui Group Holdings is deeply immersed – will become a freight super-hub and a future business, research and residential development for the Waikato.

This development has been in the works for years, but access to both road and rail was crucial and the project is dependent on completion of the Waikato Expressway.

A big step forward was taken in February this year when Tainui Group Holdings and Port of Tauranga announced a 50:50 joint venture to establish the port, which was set to open by late 2021 at the same time as the final section of the Waikato Expressway. Continue reading “While we wait for Jones to further curry favours with our money, let’s check out this $40m investment in the Waikato’s wellbeing”

A Tale of Two Ports

Port of Tauranga has cracked the $100M net profit mark for the first time, underlining how efficient it has become as NZ’s largest port. The NZX-listed Mount Maunganui-based company also reported this week its long-term credit rating had been elevated from ‘BBB+’ to ‘A-‘ by credit rating agency Standard & Poors. The short-term rating was affirmed at ‘A-2’.

PoT’s market capitalisation hit $4.3bn in the wake of its latest result, a huge leap from the $78m at the time of its IPO in 1992. The company has provided a river of gold for the Bay of Plenty Regional Council, which retains 56% of the shares.

So why have other local bodies, which own ports, been so slow to follow the example of the BOP Council in partially privatising their port businesses and reaping the rewards?

Continue reading “A Tale of Two Ports”

Economic health of NZ’s port sector is being brought into question

Significant questions are being raised about the economic efficiency and competitiveness of the port sector.

Reports this week of the  Commerce Commission receiving complaints  about  anti-competitive conduct   by  NZ   port companies  follow the  Office of the Auditor-General   writing to port company chairs and  CEOs to raise a raft of issues identified  in its annual audit of the  sector.

The  OAG  had  found  considerable  variation in port companies’ approach to valuations.

Others  involved in the industry are convinced  many ports  are  making  uneconomic  investment  decisions,  some  companies earning  less  than  2%   return on  equity.  They  back  the OAG   who  advised  port companies  to use   fair value, based on expected  cash flows to be  generated.

The  complaints to the Commerce  Commission have spurred  it to start a preliminary assessment of the conduct that is being questioned but it hasn’t embarked on a formal investigation. The  report  said a number of these complaints raised potential issues about various ports taking advantage of their market power in markets for the supply of services.

The national port network is also under review from legislators with the upper North Island supply chain study underpinning the government’s desire to integrate port, rail and road transport infrastructure.

Continue reading “Economic health of NZ’s port sector is being brought into question”