Impossible to get public transport needs past capital’s road-builders

English: An ADL class DMU at Platform 4 at Bri...
Image via Wikipedia

Someone still stuck 50-years Behind?

Apparently so according to New Zealand Herald, Brian Rudman‘s article. Look can you read the article yourself although I will provide the links below to the respective reports – but it seems we have a long way to go.

Just caught this though:

Report author and recently appointed principal transport planner Josh Arbury concedes that redesigning the proposed upgrades to accommodate a busway at this stage “would be very challenging”.

For those who keep up with the blogging world – in particular Auckland‘s Transport, Josh Arbury was the founder and administrator of Auckland Transport Blog. Although he no longer have involvement in the blog (writing posts) due to him taking on his dream job as Auckland Council Principle Transport Planner (nothing to do with Auckland Transport CCO).

Interesting to see his name get trotted out today in Rudman’s piece though. I do feel for Arbury though – a great visionary on getting Auckland’s Transport situation improved yet – resigned to often some dinosaur thinking from Wellington?

In any-case get submitting on the Draft Long Term Plan folks – if we squeak loud enough I am sure Wellington might hear us [insert Tui ad here]

Link to Auckland Council -Transport Committee Agenda with the attached report by J. Arbury.

Ok where Next with POAL

Back to the Drawing Board with Port Of Auckland?

After reading the letter from the CEO of Auckland Council Investment Limited in reply to a letter I sent to Auckland Council last month (every single councillor, the mayor and I think the CEO – Doug McKay got the letter) I was having a review and a think  on the Port situation. A side note, the Mayor’s Office and a couple of councillors have personally replied to my letter via email – however I consider that private correspondence unless otherwise stated by the message sender. Needless to say they are aware of the issues (and hence referred me to ACIL which where the “reply” came back to) and have stated where they stand (whether I personally agree is another matter entirely). Thank you to the Mayor’s Office, the councillors who replied and ACIL for your replies – very much appreciated.

Just a recap quickly on where things are at.

All my postings on Port of Auckland can be found at the Port of Auckland Index tab at the top of every VOAKL page – the index is updated regularly when I post a new item on POAL. So for a comprehensive look at VOAKL commentary on POAL, check out the Index over your morning breakfast or your lunch break at work.

From the Auckland Council side there are two particular objectives running at the moment:

The first being the issue around the Return On Investment. According to ACIL and Auckland Council the current ROI is at 6%, Council have asked (I am being polite here) that POAL give a ROI of 12%. It can be widely assumed that the increased ROI in the form of dividends back to Council would be used to pay for mega projects such as the City Rail Link under the CBD and possibly the East-West link down at Onehunga/Southdown/Mt Wellington/Penrose. It can also be assumed that this demand for an increased ROI has been a catalyst for the current industrial relations dispute between Port of Auckland and Maritime Union New Zealand. No particular comment on that one as VOAKL has not been truly interested in the IR debate at POAL. However there are comments floating around that the true ROI on POAL is around 1% if the Books were reflecting accurately so they say.

The second issue being POAL growth. In the Draft Auckland Plan and Waterfront Plan there has been mention that the port will expand into the Waitemata Harbour, block view lines, upset the tidal flow of the harbour and disconnect the public from the waterfront even further. In saying that, the mention of the expansion program was buried in technical documents which one would have to fish out to go find it (in 800 pages of Draft Plans)  – so I say someone wanted it buried away from the average person’s eye and attention.

From the other side there has been numerous debates and calls against the two issues mentioned above.

With the ROI issue: this comment seems to be floating around quite a bit.

Residential land one kilometre from the Auckland central business district is valued at ~$22 million/ha…. compared with the $3 million/ha the POAL are using to value their 77ha. The valuation is justified as being taken “by reference to its highest and best use subject to current zoning” – which happens to be as a port. It then gets its figure on the basis of “industrial land values within the wider Auckland area.”
Any halfwit can see that the “highest and best use” of the land would be in mixed residential, commercial, retail, or public space. 
Once the real value of the land is inserted in the balance sheets, then the ROI is closer to 1%, unlike the 6% they claim, and the 12% they require. In economic terms, it’s not meeting the cost of capital so is losing money. 
They should immediately shut down the port and sell of the land and take pressure off housing prices in residential Auckland.

This will usually kick off to the second issue about the Port expanding in its current spot.

Multiple media articles touch on the expansion issue with the NZH running two particular pieces here and here, Metro Magazine running an article just recently, and The NBR running an excellent piece here. Beyond that there are other groups such as the Auckland Architecture Association, Your Port, Your Call Facebook campaign, and Heart of the City running various campaigns, lobbying and commentary on the POAL program.

For myself at VOAKL I have been running commentary along two main issues: ownership model and port location options. As I have said else where I personally believe the port should be relocated away from Down-town and to south-east Auckland to make use of open land, upcoming Greenfield urban development and upcoming Brownfield redevelopment including Down-Town at the waterfront itself.

However the letter from ACIL in its response was not unsurprising was still disturbing – particularly to the call for the enquiry and questions four and five.

Lets recap with excerpts from my letter to Auckland Council.

This letter and the request of enquiry are not interested in the current industrial relations dispute between Port of Auckland Limited management and the Maritime Union of New Zealand. This letter and request of enquiry looks at five fundamental questions into the state of affairs at Port of Auckland and how steps can be taken to return the port back to optimum health and productivity.

In setting up the enquiry, these five questions would be answered – they are:

4) For the sake of optimal Return on Investment and Productivity in benefit to the wider economy and social environment: Which ownership model would be considered best for Port of Auckland Limited.

  • 100% Council Owned
  • 75% Council Owned, 25% Private owned
  • Mixed Model: 51% Council Owned, 49% Private Owned
  • Minority Holding: 75% Private, 25% Council Owned
  • Full Privatisation

5) For the sake of optimal Return on Investment and Productivity in benefit to the wider economy and social environment: What location would be most suited for Port of Auckland:

  • Port stays where it is and infrastructure upgrades are committed
  • Port gets relocated to somewhere INSIDE Auckland, example south-east Auckland
  • Port is relocated somewhere OUTSIDE Auckland. That would mean Port of Tauranga, and Marsden Point in Northland – which would also give way to subsequent infrastructure upgrades as well.

These five above questions need to be answered sooner rather than later – especially as these questions and possible outcomes would have major bearing on The Draft Auckland Spatial Plan and The Draft Long Term Plan. Enough of a major bearing that no matter which way the enquiry recommends in questions four and five – it could basically force a total re-write of both draft plans.

The excerpt from the reply from ACIL

4. The  ownership  model  currently  in  place  is  100%  Council  owned  through  ACIL. The Auckland Council believes that this is the best ownership model and no plans to change that. 

5.   There are no plans to relocate the Port.  The cost of doing is estimated to be in the billions of dollars,  which  would  significantly  jeopardise  the Return  on  Equity  objective. It is  also important to note that to cater for future growth, both the Auckland and Tauranga ports will be needed, and both will need to expand to the full extent of their current plans, to prevent the upper North Island facing a future deficit in port infrastructure.

Ok with the answer to Question Four – that was entirely expected as Mayor Len Brown has from the outset said that POAL will remain 100% in public hands. However I never said the sell down was to occur NOW, I said the enquiry would look at the various ownership models so Auckland Council, the ratepayer and public, businesses, and associations can both give their opinions to (the enquiry), and have a comprehensive document to read to assist in making an informed decision especially with The Draft Long Term Plan calling for submissions and 2013 local government elections coming up. Without that enquiry I can safely say Auckland is blind to the benefits and costs of each mode of ownership for POAL. Not very good for a public institution when its constituents can not make informed decisions from full and open information – especially to a critical asset such as POAL.

With Question Five a more interesting situation arises. ACIL’s answer seems to be indicative of few things which should be of CRITICAL INTEREST to every single Aucklander, business and institution in this city and beyond. The letter from ACIL has said in response to Question Five that “both the Auckland and Tauranga ports will be needed, and both will need to expand to the full extent of their current plans, to prevent the upper North Island facing a future deficit in port infrastructure.” Well that effectively rules out “Port is relocated somewhere OUTSIDE Auckland. That would mean Port of Tauranga, and Marsden Point in Northland – which would also give way to subsequent infrastructure upgrades as well” – so for those vying for that option – it is truly dead in the water – so to speak as ACIL have said both POAL and POT are both needed. As for this: “Port gets relocated to somewhere INSIDE Auckland, example south-east Auckland;” that has also been ruled out – to a point  – for now. However in saying it leads to the next inductive point about investment.

  “There are no plans to relocate the Port.  The cost of doing is estimated to be in the billions of dollars,  which  would  significantly  jeopardise  the Return  on  Equity  objective. It is  also important to note that to cater for future growth, both the Auckland and Tauranga ports will be needed, and both will need to expand to the full extent of their current plans, to prevent the upper North Island facing a future deficit in port infrastructure.” Oh my there seems to be an investment pickle here folks – on a rather grand scale. To cater for future growth both POAL and POT (Port of Tauranga) both need to grow and expand – ok that is a given – businesses grow to cater for future growth, that is easy to understand. However POT can expand easy – it has the land and water at its current location to do. As for Auckland – not so. Where POAL currently sits at the waterfront all the available land is taken, thus the proposal to extend into harbour to allow this catering for growth. Thus the reason why some of us want the port relocated (granted in different locations) – to allow the port to expand without consuming precious waterfront real estate both on land and the water (as well as environmental reasons).

But what is really confusing me is this Return on Equity jeopardy from the billions of dollars spent on port relocation. Expanding the port 250 metres into the harbour, upgrading the road and rail links, upgrading the Wiri Inland Port alone is going to cost at least $6 billion (or $3 billion minimum without the Eastern Highway) so I would say your RoE (ROI) would be in serious jeopardy as well as ACIL will be asked to stump up with some if not most of the cash for the POAL expansion program (although who am I kidding here – the tax and ratepayer will) 😛 . Look you have to spend money to make money pure and simple (cost cutting has its uses too) so ACIL and Auckland Council are really going to need to think super hard here on this POAL equation. The ROI (which is pathetically low any way (1% I believe)) might need a short-term hit for a long-term gain  – but can people see that. So the bit about no plans to relocate the port because of ROI/ROE jeopardy does not wash with VOAKL. It is also the reason why I called for an INDEPENDENT enquiry – to look at all the options available with POAL without interference.

And another thing that seems indicative that in response to Question Five, ACIL, POAL and Auckland Council are pretty much pursuing expanding POAL into the harbour even if submissions to the Waterfront Plan and Draft Long Term Plan say otherwise – so much for democracy there folks (and where is the cash coming from by the way?). Thus can Auckland really have a truly connected, vibrant waterfront and Down-town with a hulking huge port down at the mid and eastern ends of OUR waterfront? And is ACIL and council blowing an opportunity to relocate the port WITHIN Auckland on land and surroundings more suited (virgin bare land with good sheltered water access) to allow a potential billion dollar investment along the waterfront with new housing, commercial and public space precincts that could help “fund” other investments in the long-term while giving a decent shot in the arm in dealing with Auckland’s housing crisis. Remembering:

Residential land one kilometre from the Auckland central business district is valued at ~$22 million/ha…. compared with the $3 million/ha the POAL are using to value their 77ha. The valuation is justified as being taken “by reference to its highest and best use subject to current zoning” – which happens to be as a port. It then gets its figure on the basis of “industrial land values within the wider Auckland area.”

Any halfwit can see that the “highest and best use” of the land would be in mixed residential, commercial, retail, or public space. 
Once the real value of the land is inserted in the balance sheets, then the ROI is closer to 1%, unlike the 6% they claim, and the 12% they require. In economic terms, it’s not meeting the cost of capital so is losing money. 
They should immediately shut down the port and sell of the land and take pressure off housing prices in residential Auckland.

Which now brings me to the question – Where Next with POAL?

I have seem to come stuck at the moment as I watch a once in a lifetime opportunity have the real possibility get blown.

Time to consult that drawing board again.

A Reply to my Letter about POAL

Auckland Council Investment Limited Replies

In February I had composed a letter asking five questions (two were mine and three from Andy Cawston) about the Port of Auckland and the current situations facing the port.

Today in my mail I had received a letter from Gary Swift – Chief Executive of Auckland Council Investment Limited (the Council Controlled Organisation responsible for “looking after” Port of Auckland’s affairs in the name and “benefit” of Auckland Council – on behalf of the ratepayers of Auckland) answering the five questions outlined in the original letter.

Thank you Mr Swift for your reply to the letter, very much appreciated. 🙂

Below is the embedded document containing the letter.

The answer to question five is the most interesting one and would be a matter of interest to those who are concerned about the Port of Auckland’s planned expansion in its current site. 

[Edit from voakl admin]. As in my comment below, ACIL believe an independent enquiry is not needed to look into the five questions asked (especially the ones in the comment box below) in my original letter. While unsurprising – this is deeply disappointing. Seems it is back to the drawing board on POAL  folks. Time to have a rethink on where next – do I push on with relocation draft workings, or give up and concede the port is going to expand where it is. OR money where my mouth is and run for Auckland Council next year on a platform (well part of a comprehensive wider platform) of getting the enquiry under way into those five questions – which could see the port moved. Because the port is sick and hamstrung folks it really is – and I do deeply believe a “second-opinion” is needed through the enquiry on POAL. So time for some options and thoughts – any from the reader out there?

I will be forming follow-up questions in due time as I prepare my presentation to the City Centre Master Plan, Waterfront Plan and submission Draft Long Term Plan. It seems the Return on Investment could be “blinding” ACIL and Auckland Council to what could be viable alternatives to POAL – that being relocation to south-east Auckland OR Marsden Point/Port of Tauranga. Still need to hold that enquiry folks – now more so than ever.

The reply from ACIL

Straight Thinking Digest – March 2012

March Edition of Straight Thinking Digest

I have checked with author Owen McShane who writes his regular Straight Thinking Digests which are emailed to subscribers regularly and often form the basis of his National Business Review columns that appear in the NBR also on a regular basis. Owen has given me permission to “piggy-back” his digests (unless there is an embargo) onto VOAKL. The piggy backs will be under the Creative Commons Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0) portal and are not of the opinion of VOAKL unless otherwise stated by voakladmin.

Discussion and comments are fine – but please  remember all attributions should be to Owen McShane not VOAKL

And so for your Weather Bombed Weekend – I give you the first Straight Thinking Digest by Owen McShane – Centre for Resource Management Studies

Why The 12% on Port of Auckland

I have a Question – it is on Port of Auckland

 

A simple one – to Auckland Council

 

Why 12%?

Why is Auckland Council dictating to Port of Auckland via Auckland Council Investment Limited (The Council Controlled Organisation in charge of “looking after” POAL) that the Return on Investment (The Dividend) be 12%?

What is wrong with 6%? What is wrong trying to lift the ROI to 8% then 10% over a 5-10 year program? Or even forfeiting (now there is an evil word) the ROI for five years to allow POAL to conduct some very critical intensive capital investment that would get the ROI to double figures in the long run.

 

I ask this and I bet so does the majority of Auckland as this request for 12% ROI is plain and unitedly  insane to the point of suicidal for the port and down right criminal on Auckland Council –  to put in such a request in the first place.

 

Time for Auckland Council to reconsider – and get your money for transport projects from else where