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.
In any case – Auckland has well entirely MISSED THE BOAT!
Debate is running read hot across the waves about the Port of Auckland and Fonterra pulling its business out of there. There are claims and counter-claims that the Maritime Union are either direct influences or at minimum catalysts to this sorry affair at the port. I would be more inclined to agree on the catalyst side in regard to MUNZ and their strikes.
Also there are claims that what Fonterra and Marsk did are normal standard operating procedures – also most likely true.
The issue is though is this loss of two pretty large customers to the port and the flow on effects such as revenue, dividends to Auckland Council (source of income for the Council) and port land utilisation. But we hear nothing or see no leadership on the issue and what can, should, would or could be done now and the future for the port, economy and the waterfront.
As I have been hammering on in my blog, Port changes will have an effect on the Draft Auckland (Spatial) Plan and now the Draft Long Term Plan (the Council Budget Instrument). In short this all affects you one way or another directly or indirectly!
Hopefully today or tomorrow I will draft up and publish what those effects are and possible consequences to Auckland in general and as a whole. I am also open to any one out there who wishes to post a contribution to this blog on the Port saga. If you wish to do so, contact me and will see what arrangements can be made.
But in any case there are three things that need to happen:
1) Arbitration by a Central Govt Body between the Port and the Union
2) Debate on what to do with OUR port over the next 30 years
3) The deafening silence to stop and our leaders to take a stand NOW. Forget the politics and technicalities, the people don’t care, they want to see a face and a face who is willing and able to sort this literal crap out NOW!
Since news broke about Fonterra dumping its $127m a week trade through the Port of Auckland and relocating to Port of Tauranga and Napier, debate across the Internet and conventional media waves has been running white-hot about the sorry saga that is the Port of Auckland.
In this post I won’t stick my boot into the Maritime Union (MUNZ) (I will leave that to Whale Oil), but what I will comment in is further developments in today’s story.
Check the link from TVNZ above, Port of Tauranga is doing very well and can only do better.
And by better I mean there is a certain amount whispers in the grapevine that Kiwi Rail COULD either be bringing forward upgrades to capacity on its very lucrative Tauranga to Southdown (home of Port of Tauranga’s Metro Port Base), Auckland Line via Hamilton (The Metro Port Runs as known by Kiwi Rail, Train Control Wellington and Veolia Transdev Auckland) AND/OR drawing up plans for more upgrades to the line to allow more and longer Metro Port Freight Trains.
Now here is the double edge sword. Go Port of Tauranga and Kiwi Rail – might as well cash in on increased business and invest on your capital to help nurture that growth (could result in the third rail line between Papakura and Westfield being accelerated) at the expense of Port of Auckland and in-part Auckland herself.The flip side of the sword, increased freight train traffic between Pukekohe and Westfield that can have a higher risk of interfering with Auckland Metro Passenger Services due to track congestion and/or those DL class locomotives hauling the Metro Port Trains breaking down (which they do to often for my liking) and causing havoc for rail passengers.
I will be drawing up a letter over the next four weeks to Auckland Council expressing my concern and ideas for this Port of Auckland Saga. As well as posting here in VOAKL commentary and discussion about Port of Auckland and its effects on the Spatial Plan.
In the mean time a poll for you (again comments will be moderated first)
I am reading at the moment that Port of Auckland has lost Fonterra as a customer. Whale Oil a blog I frequent is running pieces on the latest from Fontera‘s decision. Personally I do not care if you despise Whale Oil or not – not interested – what I do care is the second loss of major customer and the Union being idiots.
While I do not make it a habit of posting here at VOAKL on politics per se, my social liberal side is now boiling with rage and I have swung to the neo-conservative side in this sorry saga and am wanting more and more for that union to have its back broken.
Basically Central Government and Auckland Council – do something NOW – doing nothing is no longer an option…