The debate around the Port of Auckland was certainly lopsided. For the record I agree with Councillors Christine Fletcher and Efeso Collins in delaying ANY talk about Port relocation talks until the Government has formed as we have no idea which way that will go. However, Fletcher and Collins lost a motion 9-8 to have the debate deferred until next month so we are facing a debate that is entirely one sided.
From the Planning Committee Digests published last week:
Decision digest | Planning Committee – 10 October 2017
Council considers Port Future Study recommendations
The recommendations of the Port Future Study Consensus Working Group, completed in July 2016, were presented to the Planning Committee today.
The committee decided to continue investigations by scoping a process for investigating alternative port locations and for identifying and monitoring constraints and triggers to inform any future relocation.
The process would include engagement and advocacy to central government to investigate an Upper North Island Port Strategy.
The Port Future Study was as an independent study with the objective of making recommendations to Auckland Council for a long-term strategy to accommodate Auckland’s demand for sea-based freight and cruise.
The Consensus Working Group recommendations were received by the then Auckland Development Committee in July 2016 and referred to the incoming council. TheConsensus Working Group recommendations are available in the Planning Committee agenda here.
With recent work completed on a Central Wharves Strategy, staged delivery of additional waterfront public space and new ferry infrastructure, considering the Port Future Study now is the next step in a review of the City Centre and Waterfront areas.
Planning Committee Chair, Councillor Chris Darby, spoke about the urgent need for the council to progress this work now.
“The Port Future Study was made up of 17 self-selected members from a diverse group of Mana whenua, community and business members informed by expert technical advice from a range of leading consultants.
“Today’s decision holds faith with the considered and thorough work completed by that broad family of people and now it’s entirely Auckland’s responsibility to progress further work.
“The lead in timeframe to make changes on large infrastructure is enormous. We need to start this work now so we can look out for future generations and for the social well-being of all Aucklanders who will be living in this city”, says Councillor Darby.
The following is a digest of other decisions made at today’s meeting. The agenda is available on Auckland Council’s website and minutes will be added once confirmed. This meeting was also webcast on the council’s website and items are available on demand.
Items 1-8 were administrative and input items (excluding public and local board input items covered below). Item 15 covers information memos and briefings, which are available online.
Note: A motion to have the matter deferred to next month while we await a new Government was defeated 9-8. Also of note the watched the debate and the Committee failed to address two questions:
- How will the freight move from a new port location
- Consequences on the Southern Line and the Southern Auckland industrial complexes such as Wiri and the Airport that employ thousands of Aucklanders especially from the South.
I remind Councillors of this next time they discuss the Port.
No where in the debate was the downstream consequences of moving the Port discussed. That is how you move the freight from the port to the major logistics and heavy industrial complexes in Southern Auckland. Wiri, Airport, Highbrook, Drury South, and Southdown (on the Isthmus) are the big heavy industrial complexes of Auckland that have direct or indirect tie in with Port of Auckland. The Port of Auckland Inland facility (rail to truck) is also located in Wiri and a second facility can easily be established in Drury in the medium term.
A universal rule of thumb is that a port is no further than 100 kilometres from its primary market. The current port is about 20km away from Wiri by train while Tauranga and North Port are both over 160km away from Wiri – well outside the accepted rule of thumb. 60% of all imported goods from the Port of Auckland also stays within the Golden Triangle area of Auckland, Bay of Plenty and the Waikato with most of the 40% going south of the Golden Triangle not north. This is why the industrial complexes are in Southern Auckland and are continuing to expand in Southern Auckland and eventually the northern Waikato.
Manukau City Centre is also strategically placed servicing the industrial complexes in Auckland as well as the Waikato and Tauranga. The Southern Line (rail) is also set up to take the Third and Fourth Mains from Otahuhu to Papakura with the Third Main able to be extended north-east to the Port via the Eastern Line and south via the Southern Line to Pukekohe. The Western Line is not set up for this as it was never envisaged the heavy industrial complexes would be north of the City.
As we can see the South is tied into Port of Auckland extensively. Moving the Port north resulting in it being 160km away from Wiri as well as freight trundling through Auckland does no one especially the South any favours what so ever.
I have written on freight verse tourism in regards to the port before in 2015. Much of what was written then still applies in 2017, you just allow for increase tonnage and value of that tonnage coming through:
A Look Again At Port Dynamics
Seeming Radio Live’s Duncan Garner has brought the question up again and with it Ivory Tower Brigade I am going to repost my commentary backed with some facts on Port of Auckland and whether we go freight or tourists.
QUESTION FACING THE AUCKLAND
Again Auckland is facing is what to do with the Central Wharves at Port of Auckland.
Bob Dey of Property Report has a piece on the conflicting situation which you can read here: Council gets second of competing reports on wharf use
The Port of Auckland report I have embedded at the bottom of this post. But minus the Committee muddling itself as per normal the question comes down to what does Auckland Council want with the Central Wharves: People or Freight.
The question is that simple especially when it comes the pure economics of the situation.
- Cruise Industry: $160m/year to the economy and some 3,000 jobs
- Bulk/General: For cars and machinery: At least $380 million and some 3,500 jobs mostly in South Auckland. Note this is for two sectors of general and bulk and there are plenty of others that come through the port.
BOB DID PICK UP THESE CONCLUSIONS IF COUNCIL GOES FOR THE PEOPLE OPTION:
- Ferry development plans will result in a 50% growth in patronage by 2026. This growth is limited by the availability of ferry berths at the Downtown terminal and the inefficiency of the terminal facilities. The proposed option allows growth in ferry berths to meet demands
- Cruiseship visits currently contribute $160 million to the Auckland economy, delivering nearly 3000 jobs. Cruise ship visits are projected to grow from 100 to about 150/year by 2030, and passenger numbers from 200,000 to 350,000. Cruise ships are getting larger, but the new larger ships are not able to berth in Auckland. Cruise lines are indicating that these ships will come to Auckland within 5 years. The projected increase in annual value to the Auckland economy to $300 million will not occur without additional infrastructure. It is noted that other New Zealand cruise ports need Auckland to be able to accommodate these ships, otherwise they will not come to the country and hence a lost benefit nationally
- Tourist services on the harbour and in the gulf are increasing. Anticipated growth in the range of tours offered will add to Auckland’s visitor attractiveness, but these services are spread across the waterfront. Consolidation in a ‘tourism hub’ will enable visitors to readily access these services
- Superyachtvisits are restricted by limited infrastructure both for larger vessels and for the growing demand. Superyachts contribute about $30 million/year to the Auckland economy, three-quarters of which is spent with the marine sector.
WHILE FROM THE PORT OF AUCKLAND REPORT:
VALUE OF CRUISE SHIP VISITS AND VEHICLE IMPORTS/WHOLESALING
Cruise ship industry
The 2013-14 season had 88 cruise ships visits which brought 186,200 visitors and 63,900 crew to New Zealand. Market Economics (ME) spatial estimate this resulted in over 1.08 million passenger port days and 455,100 crew port days across the country. They estimate the total value added by the industry across all New Zealand regions was $365.3 million, with Auckland accounting for over $159 million (44%) of the total. The ME spatial estimate is equivalent to a value added of $1.8 million per ship visit in Auckland. At the time of writing this report, 92 cruise ship visits were booked for the 2014-15 season.
Typically, cruise ships visit multiple New Zealand ports as part of a wider circuit including the South Pacific and Australia. Together with other Australian major ports, Auckland uniquely within New Zealand functions as an exchange port where passengers and crew start or end their journeys. Exchange ports generate additional economic value by providing services that support the exchange of passengers and crew, and the resupplying of cruise ships. Services include bunkering, providoring, hotel stays, airline bookings, airport activity and transportation. If berth facilities are inadequate or unavailable in Auckland, the cruise ship industry will respond by either:
continuing visits but with smaller ships, resulting in Auckland receiving fewer passengers per visit or an increased frequency of visits
reducing ship visits as the size of ships increases by limiting visits to a port of call rather than an exchange of passengers or crew. There is also the possibility that, if Auckland cannot accommodate larger ships, visits might be reduced nationally. It is beyond the scope of this report to examine these potential impacts.
THE VALUE OF THE VEHICLE IMPORTS AND WHOLESALING INDUSTRY
Around 90% of light vehicle imports in New Zealand come through the Ports of Auckland Ltd. Import data from Statistics New Zealand suggest that these vehicles were worth around $3.2 billion in 2013/14.
Ownership rates relative to the population fell during the global financial crisis as people put off major purchases, but have begun to grow again. Vehicle ownership trends are a good indicator of demand for vehicle imports and for businesses that manage vehicle wholesaling, warehousing and distribution in Auckland.
Auckland’s motor vehicle wholesale industry stands to gain the most from the growing demand for vehicle imports. This industry employs about 3,500 people and accounts for 48% of total motor vehicle wholesale employment in New Zealand. Figure 8 shows that motor vehicle wholesale businesses (and jobs) are concentrated around the residential suburbs in South Auckland.
Job creation is significant for South Auckland because it suffers higher unemployment rates than other parts of Auckland and New Zealand. For example, the unemployment rate in the Otara-Papatoetoe local board area was 14% according to the 2013 Census. Unemployment in the Auckland Region as a whole was 8%.
Our estimates suggest that, during the financial year April 2013 to March 2014, the motor vehicle wholesale industry contributed $380 million dollars to the Auckland’s Regional Gross Value Added (RGVA).22 Of this amount, $200 million was paid as wages/salaries.
Other bulk cargo
As noted above, the non-homogeneous nature of the balance of the cargo landed at the Port renders an analysis of the precise economic contribution made by each of the cargoes fragmentary and less valuable than the discussion of the dominant cargo (vehicles). Nonetheless, some general observations can be made. The largest discrete cargoes after vehicles are cement, sand, road metal and gypsum. It is reasonable to conjecture that the bulk of the consumption of these items will take place in the expanding Auckland region. It follows that there is value in landing such items near where they will be used, and that diverting the landing of such items to other ports is inefficient in as much as extra costs will then be incurred in transporting them to the Auckland region.
SO THOSE ARE THE SIMPLE ECONOMICS – NOW FOR THE COMPLEX STUFFThe way I see it is flip Captain Cook Wharf over to Development Auckland (replaces Waterfront Auckland, and Auckland Council Property Limit), demolish Marsden Wharf, and extend Bledisole on piles by an extra 200 metres. If that is not possible then demolish Marsden, extend Captain Cooks Wharf but retain it for Port use and look towards Wynyard Quarter which still has a liquid bulk terminal there (although not for much longer).
This presents another question to Port of Auckland on whether they could shuttle general/bulk freight by rail economically to their Wiri site like they do with containers. If not then we risk more trucks on the road which presents other problems in itself.
Now to shift general and bulk to Northland or Tauranga while it might seem like a good idea it certainly isn’t. The rail lines to both ports are not in the best situation to handle the increased freight and some serious coin will be needed:
- Third Main from Pukekohe to Westfield on the Southern Line so the freighters do not mixed with the increasing amount of passenger trains
- East Coast Main Line from Hamilton to Tauranga needs the Kaimai Tunnel upgraded to removed a 25km/h restriction as well as more passing loops to the point of double tracking to handle the increased freight loads especially the Metro Ports (Port of Tauranga to Southdown)
- The North Auckland Line between Swanson and Whangarei is in very poor condition with the line threatened to be mothballed. The entire section of the NAL would need upgrading, the Marsden Point Line needing to be built, and the Avondale-Southdown Bypass needing to be built so the freighters can bypass the busy Mt Albert-Newmarket-Westfield sections of the Western and Southern Lines.
The above needs to happen regardless but it will take serious coin as I mentioned and neither National and Labour are committed to such state building projects. So that means increased road traffic and already State Highway 1 in both directions is congested as is especially at Welsford-Puhoi in the north, and Drury and Mt Wellington in the south.
So as well extra costs of shipping the freight to Auckland you have inefficiencies as well owing to the road congestion and rail lines not in a state to handle the loads. Those costs come back to the consumer directly and of course JOBS! I should not need to point that South Auckland is acutely affected by any changes to Port of Auckland structure and handling.
I do know about you but I am in no mood for messing with some 3,500 jobs in the South where four of the five heavy industrial complexes are just so you can have some play space on a central wharf. Remember those 3,500 jobs are just dealing with cars let alone the rest of the bulk trade.
Weighing this all up I am inclined to be more pro freight with the central wharves for the next 20 years at least. If and when our inter regional rail freight can handle freight being moved seamlessly which out overt effects to our industrial bases then maybe I might go pro-people.
PORT OF AUCKLAND PART II STUDY
This study was not related to a Port of Auckland submission to the Unitary Plan that included a look at port relocations. You can see that submission and commentary on it here: PORT OF AUCKLAND – RELOCATION AND THE UNITARY PLAN
As for how will the Port move all that stuff from its main facility to South Auckland? Well this might help: PORT OF AUCKLAND INCREASE PORT RAIL SHUTTLE SERVICES
It seems people do not realise a few things:
- Cruise ships the world over dock at industrial ports with views of industry. This includes Tauranga, Napier, Sydney, New York and even London. So tourists are use to it and probably don’t mind seeing some industrial mechanics at work
- Industry is never sexy compared to drinking your latte on a wharf. But industry is what makes us money, commerce spends it. Also if the ever increasing amounts who visit the port every Auckland Anniversary Weekend are anything to go by, interest in industry would seem to be quite out there
- For the Ivory Tower toffs you have west of Queens Wharf, the Viaduct, Wynyard Quarter and Mission Bay. I think we can handle a small proportion for our industrial port that handles the bulk of NZ’s imports and growing amount of exports
- The Port from next year will be governed by more stringent rules under the Unitary Plan in terms of reclamation and wharf extensions. More so that the legacy rules currently in play. The Port if it wishes to reclaim would need to satisfy four strict conditions exhausting all other practical alternatives before a consent for reclamation was ever given
- Whether the Ivory Tower lot like it or not the Port generates with its bulk cargo over half a million dollars work of economic activity mainly in Southern Auckland (home of the industrial complexes). That activity includes wages for a section of Auckland that has an acute unemployment problem. So I am not going to go throw a spanner into port or industrial related activities when they are operating within the rules just so someone from the Isthmus or Lower North Shore can have a coffee at the end of some wharf. You want to do that go do it at Wynyard.
- And for the Councillors and Deputy Mayor who backed the Port on the reclamation issue will find a great deal of support from their Wards which are most affected by any change to Port operations.
Reference: Freight or Tourists?
In regards to an Upper North Island Port Strategy:
Without serious investment in rail the entire exercise could be considered fluff
Upper North Island Freight Accord identifies freight strategy
A shared vision for the efficient and safe movement of freight across the Upper North Island and beyond has been identified in the Upper North Island Freight Accord, developed by the NZ Transport Agency with the support of a number of industry organisations and local government.
The Accord delivers on the Government’s direction to improve the efficiency of freight movements in order to make the New Zealand’s economy more internationally competitive, grow our exports and ensure safety.
Transport Agency Freight Portfolio Director Harry Wilson says the organisations have developed the Accord as a shared view of the freight challenges and opportunities facing the upper North Island to ensure a collaborative approach to planning and investment decisions which affect the movement of freight.
“The Upper North Island Freight Accord gives us a common understanding of ways to lift freight efficiency and improve safety, something that will benefit all of New Zealand,” Harry says.
Around 56 per cent of New Zealand’s freight is moved within the upper North Island meaning that freight efficiency in the region affects the prosperity of the whole country.
“The size of the national freight task is expected to grow by 50 per cent over the next few decades, so developing strategies to make the freight system as efficient as possible will reduce the cost of goods and increase the competitiveness of our importers and exporters,” Harry says.
The Accord identifies principles, actions and success factors that will deliver a better freight system which delivers certainty for investors.
“As an exporting nation with a focus on the primary sector, freight is the lifeblood of our economy and so it is critical that all the groups across the freight sector work together to make this system as good as it can be,” Harry says.
There are 21 organisations who support the Upper North Island Freight Accord;
- The Upper North Island Strategic Alliance which is made up of Northland, Waikato and Bay of Plenty regional councils, Whangarei District Council, Auckland Council and Hamilton and Tauranga city councils.
- Ports of Auckland and Port of Tauranga
- Auckland Transport
- The Transport Agency
- Road Transport Forum
- Transport firms HW Richardson, TR Group, Hall’s Group, Mainfreight, NZL Group, Toll and TIL Freight.
The Upper North Island Freight Accord follows on from the Upper North Island Freight Story (external link)which was a process of high level conversations to develop a summary of critical issues constraining the efficient movement of freight and outlining a share approach to decision making among the partners.
The Accord is part of a national freight planning process undertaken by the Transport Agency which has seen the preparation of a draft South Island Freight Plan (external link)while work continues on a Central Freight Plan. Once work on freight planning in all three regions is further advanced, work will begin on a national freight plan which will look at how the nationwide freight system can be planned and developed with a ‘one network’ approach.
The report or rather accord can be seen here:
Well unless we see serious policy and funding changes towards rail that includes splitting up Kiwi Rail so that it runs as a freight company (and a profitable one at that too) while the tracks join the roads under NZTA’s control then we might be getting somewhere with moving freight around the upper North Island.
And if Government got out of its ideological fetish against rail and allowed companies like Mainfreight to participate in investing in rail even further then having the State Highways clogged with trucks hauling freight over 100km might just be avoided. Because as we know heavy rail is the most efficient land transport form for moving large amounts of freight over medium and long distances (coastal shipping is most efficient for long distance like Auckland to Christchurch).
Reference: An Upper North Island Freight Strategy?
And finally in regards to rail verse road for moving freight:
The business case for greater freight efficiency in South Auckland has finally been released, and it turns out that a new “Third Main” rail line is the best of 10 options. Guess what’s worst? Putting greater reliance on road freight. So why, asks Ben Ross, does the government still insist on favouring trucks instead of funding the rail option?
Back in June, KiwiRail refused to release the full business case for building the “Third Main” – a rail track from Otahuhu to Wiri beside the existing two tracks. Instead, it released a heavily redacted version. Now the unredacted version has been released – and its contents are a shocking indictment of government policy.
The purpose of the proposed Third Main is to allow freight trains to have a dedicated track separating them from passenger services on the most congested part of the Auckland rail corridor. For a cost of $65 million, KiwiRail would be able to run six extra freight trains a day and Auckland Transport would be able to move towards getting frequencies for passenger services up to every 10-15 minutes all day. The Third Main would, in theory, also enable better express passenger services between Pukekohe and Britomart once the City Rail Link becomes operable.
The heavily redacted business case was analysed by The Spinoff, The Nation, Greater Aucklandand my own site Talking Southern Auckland. We speculated on what the redacted parts were and why they were redacted in the first place. One theory was that ‘Option Five’ (which was fully redacted) might have been the Metroport facility in Southdown moving, throwing freight movements up into the air. Metroport is owned by Port of Tauranga.
The unredacted business case was released on Tuesday in response to pressure from Harriet Gale of Greater Auckland. It reveals that Option Five was actually building a Third and Fourth Main (two new sets of tracks) at the same time. Here is the previously redacted Option Five:
The NZ Transport Agency (NZTA) uses a “Multi Criteria Analysis” (MCA) to assess funding projects. This was also previously redacted but is now visible. The report reveals that the Third Main had the second-best score in terms of benefits over costs. So what came out as the lead scorer? Here is the MCA:
Building a Third and Fourth Main together (P8 in the table), with a price tag of $200 million, came out first along all criteria lines. Building the Third Main on its own (P9), at a cost of $65 million, was second. Both were well ahead of any other options.
Shifting more freight by road (P3 in the table), which would require upgrading the Southern Motorway, came out worst.
NZTA’s modelling is not as effective in measuring wider benefits and costs as we would like it to be. Just look at the line “Cultural, Social and Environmental Effects”, where all the options are scored 0. That’s a neutral score and shows that cultural, social and environmental effects are not even assessed.
But we know that widening the Southern Motorway should have a negative score because it would result in houses being demolished, congestion getting worse and pollution also getting worse. We also know the two rail options, the Third and Fourth Mains, should have carried a positive score. Both would lead to more efficient freight train operations (economic), mitigated congestion on the motorways (economic and environmental) and more frequent passenger trains. That last one would have economic benefits, cultural benefits (via connectivity and accessibility) and environmental benefits (decongesting the motorway).
Without factoring in a proper analysis of cultural, social and environmental effects, the Fourth Main has a business case ratio (BCR) of +0.8 to +1.1. That’s the best of the 10 options, but it’s not great. But with those effects factored in, the BCR is likely to be +3.0 or more. That’s good.
Conversely, the BCR for relying more on roads (Option Three) is currently given as -1.5 to -2.2. With cultural, social and environmental effects included, those figures would be even worse.
In fact, if you look back at the Multi Criteria Analysis, the gulf between the Third and Fourth Mains and all other options is enormous. The new mains have double digit positive scores. All other options have negative scores.
So, two questions.
1. Why was the business case redacted – especially for the Fourth Main?
The answer is surely politics. It seems to come down to an attempt to protect the position taken by the government.
The redacted material wasn’t commercially sensitive and nor would its publication have harmed the free and frank debate between officials and the minister. Instead, it contains a clear-cut case to build the Third and Fourth Mains as quickly as possible, and definitely before the CRL opens (2023 on current estimates).
The redacted MCA also completely demolishes the roads-first argument, with clear implications for the future of the proposed East-West Link (currently before a Board of Inquiry, with no business case and a BCR of 0.96).
2. Why does the government persist with the option of more roads for more road freight?
This question has been asked repeatedly by all the media organisations and many analysts following the issue, including politicians at central and local level representing nearly all non-government parties. The report discussed here was jointly prepared for the government by the NZ Transport Agency, KiwiRail and Auckland Transport. It recommends – that is, they allrecommend – that the extra rail line or lines be built as quickly as possible.
The government’s continued support of the road freight industry in preference to expanding the role of rail, in the face of the data in this report, makes a complete mockery of its claim to prudent economic management. It makes, instead, a pretty good case for incompetence, or cronyism, or both.
Remember, it’s recently been announced we’re getting more passenger trains and more infrastructure to enable more housing in Southern Auckland. On top of the growing demand for freight trains, the case for building the Third and now Fourth Mains will soon be desperate.
By the way, the government’s infatuation with motorways and highways that look like motorways has produced a new set of drawings for that proposed East-West Link. NZTA wants it to look like this:
Instead of the best kind of rail, we’re currently on track to get this: the worst kind of road. And it’s going to cost around 10 times as much as the Third and Fourth Mains.
So my message to Deputy Mayor Bill Cashmore and Planning Committee Chris Darby: You can not discuss the Port without discussing the Southern Auckland heavy industrial complexes; so canwe and discuss both next time please – as a recommendation.