Len Brown, Ports of Auckland boss at odds over whether crucial briefing took place

Ports of Auckland CEO Tony Gibson says he kept Auckland Council in the loop over wharf expansion plans, as mandated, with a 2013 presentation.

But Auckland mayor Len Brown says the briefing never took place.

TVNZ Q+A host Simon Dallow highlighted the Ports of Auckland statement of intent that says any significant proposed capital expenditure impacting on the port’s footprint and its connection to Auckland will be discussed with the shareholder.  “Len Brown has told me this morning that those discussions never took place … He says you absolutely did not do that,” Mr Dallow said.

Mr Gibson responded, “Well, that’s not true. At the end of the day, in 2011 we inherited 23 hectares of reclamation. We’ve listened. We’ve actually reduced that by 90%.”

The chief executive said Ports of Auckland is not arrogant as a company. 

“I don’t think we’re arrogant as a company. That’s not part of our values. I think we’ve really engaged with the public."

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RAW DATA: Q+A transcript: Ports of Auckland chief executive Tony Gibson

Watch the interview here

TONY Well, I’m passionate about it as well, but I think you have to frame this discussion. When I came on board in 2011, I inherited a 23 hectare reclamation, a 279 extension, and, quite rightly so, Aucklanders got somewhat annoyed at that development, so we stood back. We have re-evaluated. We’ve engaged with Dutch consultants Best of Class-

SIMON But you haven’t engaged with the public. This has been the problem, hasn’t it? The Council - why didn’t you keep the Council and the people in the loop?

TONY Well, we have engaged with the public, and I think right from the very start when we got pushed back, we’ve actually gone back, we’ve presented the Council in 2013 the options that we saw around our growth and development plan, which we felt had been socialised, and they were socialised with the public. And, in fact, there was a poll done, and 60% of Aucklanders that were polled said that they were in favour of the port development.

SIMON Len Brown has told me this morning that those discussions never took place. The discussions that you’re mandated for. That your Statement of Intent says any significant proposed capital expenditure impacting on the port’s footprint and its connection to Auckland will be discussed with the shareholder. He says you absolutely did not do that.

TONY Well, that’s not true. At the end of the day, 2011, we inherited 23 hectares of reclamation. We’ve listened. We’ve actually reduced that by 90%. That was what was put forward in the Unitary Plan Proposal. Two options, which included one option of relinquishing Captain Cook and extending Bledisloe. So, in terms of our engagement, we’ve also had NZIER recently and also PWC confirm that, actually, based on our current growth projections, we are short of berth space.

SIMON Yeah, I’ll get to that. But you sought consent without notifying. The public weren’t informed that the consent for the extensions was going to be sought.

TONY But it was a non-notifiable issue and-

SIMON Did you not perceive that there would be some kickback here?

TONY Well, the real issue is that this is a wharf extension. The real issues were around reclamation. You know, if we want to continue to have bananas and coffee and cars and yachts and what have you, then obviously we have to grow.

SIMON You say the issue is about reclamation, though, but people are upset about the extension, the finger wharf extensions themselves. That’s where the opposition’s come from already.

TONY Well, certainly if you look back, again, it’s around reclamation, and I think what’s happening, and this is led by The Herald, is that every time there is an article about the extension, it includes reclamation. Let’s be very clear about where reclamation stands. That’s a discussion that we will have with the public when the Unitary Plan is rubber stamped, and that starts at the end of 2016.

SIMON I understand where you’re coming from, but reclamation is not the only issue. The fact is once you put those two finger port extensions out there, the water in between is effectively lost to the public. The sight lines are already gone at that point. You say The Herald’s leading the attack against you. They’ve called you arrogant. Various politicians have called you arrogant. Are you okay with that?

TONY I don’t think we’re arrogant as a company. That’s not part of our values. I think we’ve really engaged with the public. I mean, we’ve done a lot in terms of engaging the community. Our port development day or our open day, we had 65,000 people. We opened the front door.

SIMON You have to grow. As you said, you’ve had to expand because bigger ships; greater freight growth, right?

TONY Yes.

SIMON At some point, though, that ends, doesn’t it? At some point, you can’t continue to accommodate greater freight growth without ending up with the Auckland Harbour being a canal.

TONY There is a limit to it, but I think just in terms of the way ships are getting bigger - if you take the North Asia trade, we’ve had an upgrade of ships there to 4500 TEUs. Those ships used to call at the Pacific Islands. They’re too small now, so they call here and trans-ship all their cargo. Now, you know, the Pacific Islands is a very important gateway for us. It’s part of our family, so you’ve got to accommodate that freight.

SIMON But it’s not sustainable to keep expanding the port over and over, is it? At some point, you’re going to have to bite the bullet and a new port’s going to need to be built. Why isn’t that being considered at this point?

TONY I think if you considered building a new port 20 years ago, that probably would have been the time to do it. But we’ve looked at the options around building a new port. First of all, it’s going to cost upwards of $5 billion, and the two sites are Puhunui Island and the Firth of Thames. I think that from an environmental point of view, that wouldn’t be acceptable either. So if you’re talking about-

SIMON From the cost perspective, that’s doable, isn’t it, because you’re sitting on how many hectares of land? 50-odd?

TONY 75 hectares.

SIMON 75 hectares. And you extrapolate the value of that, and it’s-

TONY No. It comes nowhere near the-

SIMON That’s on a valuation that you guys have done.

TONY Well, we’ve got experts valuing it.

SIMON But ultimately we need another port. We’re going to need another port. When there’s 2.5 million people, when it just keeps expanding into the harbour-

TONY I don’t think we need another port.

SIMON Ever?

TONY No.

SIMON Can you rule that out long term?

TONY I believe that with the developments we’ve got around the container terminal, our plans there for improvements around technology, etc, we’ve got enough capacity probably until at least 2025 now. And with further developments, we could probably cope with 3.1 million containers. On the multi cargo-

SIMON What happens if the city grows to a certain level that that’s no longer enough? We’re going to need another port, aren’t we?

TONY Don’t forget there will be a paradigm shift in technology. The container terminal industry is way, way behind in technology. So there will be a paradigm shift at some stage.

SIMON What’s stopping a coordinated strategy with North Port and Tauranga in the interests of greater national-?

TONY Each have their own issues. Again, if you look at the PWC report and recently the NZIER report, each of them needs to cope with their own growth. There is a lot of talk about us relinquishing cargo in Auckland and providing it to Tauranga or Whangarei. That has significant impacts on the supply chain, cost of infrastructure. And one thing I think a lot of people don’t realise is that Ports of Auckland - 70% of the imports that come in through the gate here are distributed within a 20km radius. So it’s a very low cost, effective supply chain.

SIMON The New Zealand Herald’s reporting heads could roll. Are you concerned?

TONY Look, they’re entitled to their opinion. We’re doing our job. We’re trying to deliver the best we can for Auckland. We’re working for Auckland. We’ve made a lot of change, and we are a successful company with a good spirit, good people, and we want to continue to deliver.

SIMON And the widest possible interest of Auckland is at heart? As opposed to simple economic return?

TONY Absolutely. And I come back to the reclamation issue. That’s something which can only be considered after the Unitary Plan has been given a rubber stamp. Then the consultation starts with the public, and that’s very important.

SIMON Tony Gibson, thanks for your time.

TONY Thank you very much, Simon.