Auckland Misses the Boat
Rather apt cartoon from the NZ Herald yesterday. But it also highlights a point as well.
Before this whole port saga blew up prior to Christmas, it was being toyed around that Auckland Council should sell down its share in the Port of Auckland. Since 2005, POAL is 100% owned by Auckland Council through various investment arms under the former Auckland Regional Council and the current Auckland Council. Dividends would then be paid to the council which in turn would be used (well should have) for capital projects like transport.
However since 2005, efficiency at the port has dropped and the value of POAL slipped. Thus it was toyed to return efficiency, value and dividends to the POAL and shareholder(s) that the port should take one of two options.
1) Mix Model where Auckland Council retains 51% and the private sector 49% – much like what Central Govt. is doing at the moment with the power companies and Solid Energy
2) Full privatisation with Auckland Council on a 25% minority shareholding
It is believed which ever of the two options taken, commercial discipline would be instilled into POAL and the value, efficiency and rate of return (the dividend) would increase while the cash gained from the slim down could have been used for the Eastern Highway and/or the City Rail Link (think of it as a nice deposit).
However with this crap with MUNZ (yep I am going to stick my boot into the union now as I have had enough)going on and two big “boats” pulling out (Fonterra and Maersk)the value of POAL to fall and dividends to Auckland Council has and will continue to fall.
What the major issue will be is that any sell down now is literally buggered thanks to this industrial relations saga.
Any sell down or privatisation will be basically on the cheap if the private sector takes the risk and some pretty big balls to invest in POAL. On the flip side the Council gets reduced to bugger all proceeds from the sale than what it would have when the port was at its prime. Reduced proceeds mean less money for the CRL, Eastern Highway or that nice park upgrade the North Shore is looking for.