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Risks in leaving rationalisation to ports - lobbyist

Fuseworks Media
Fuseworks Media

Wellington, Oct 13 NZPA - A northern business lobby has backed the industry-led approach to ports rationalisation recommended in a government-commissioned maritime freight report -- but warns ratepayer-owned ports may have problems with such decisions.

Employers and Manufacturers Association Northern (EMA) chief executive Alasdair Thompson welcomed the maritime freight report which the Transport Ministry commissioned from the NZ Institute of Economic Research, but warned of a risk in leaving it to port companies to react to future decisions by shipping lines about where they called.

"The necessary commercial decisions may not be easy to make for ports that are largely owned by councils -- or in Auckland's case -- where the port is wholly owned by the Auckland council from November 1."

The current owner of Ports of Auckland (POAL), the Auckland Regional Council (ARC), regarded the company as an investment from which to receive dividends, and the majority of the newly-elected Auckland councillors -- including the new mayor Len Brown -- seemed to think the same.

"They see no room for any private shareholding, which could release capital for investment in public transport," said Mr Thompson .

"Nor was the ARC willing to consider rationalisation when the Port of Tauranga and the POAL began discussing it some two to three years ago.

"Rationalisation could well see the likes of the Auckland Council having to stump up ratepayers money for development capital were it needed to meet the needs of becoming a hub port for the North Island, if not for New Zealand.

"If central and local government part-privatised ports and other important public infrastructure, they would need to commit less ratepayer or taxpayer capital for the development or the rationalisation of these assets."

The report released today suggested that the Government should be able to help smaller ports that want to exit the business do so.

That could include reducing exit costs associated with the Resource Management Act and perhaps even help in redundancies, said the report.

Once shut, guarantees should be sought to ensure the ports stayed shut.

Ports had adopted an approach that defended market share at all costs, but ship operators had used such fears to good effect in negotiating new schedules with ports. For smaller ports, losing ship operators did have a major impact on activities, and that was part of the risk taken for owning a port.

For bigger ports the long term solution was to involve more commercial operations. That did not mean that local government should sell ports and facilities, but it did mean that local politicians should have less say in running ports.

A possible option was to adopt the Australian model, which would require port companies to become landlord ports and allow competition between stevedores for both the break bulk and containerised trades.

Releasing the report, Transport Minister Steven Joyce said it proposed that the best approach for government is to leave final decisions in the hands of shippers and let ports react to those with their own investment decisions. That was consistent with the Government's view.

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