Port of Tauranga chairman Pilkington slams 'super-port' idea for Auckland relocation

Port of Tauranga [NZX: POT] chairman David Pilkington says his company's shareholders would take some convincing that building a new "super-port" at the Firth of Thames or Manukau Harbour to serve the upper North Island would be a good move.

The super-port suggestion was included in the Port Future Study released last week, which found that Ports of Auckland is likely to need to move from its current Auckland waterfront site and in the interim needs to have extra berth space.

The council's Auckland Development Committee meets tomorrow to consider recommending the incoming council elected in October do more detailed technical analysis on two favoured relocation sites. In the interim,  Ports of Auckland is forging ahead with designing a planned extension to Bledisloe Wharf to allow extra berths despite public opposition to more incursions into the Waitemata Harbour.

The Consensus Working Group's report said another larger scale consideration was a super-port because Port of Tauranga's growth appears to be constrained in the long-term. "These wider transport, land use and upper North Island port strategy implications should be examined when deciding which of the port location options to develop," it said.

But Mr Pilkington said the report doesn't take into consideration that the Port of Tauranga's existing container site at Sulphur Point still has extra capacity and once that is constrained the company could look to extend operations to its Mt Maunganui site.

He questioned the need for a study that looks 50 years out, a horizon that makes it difficult to assess with any accuracy whether there will be sufficient capacity at that time. He also questioned the numbers used to assess predicted growth in container volumes.

"It's very conceptual and it's hard for me to assess what the purpose was other than to show there are no magic short-term solutions other than for Ports of Auckland to continue quietly expanding where it wants to," Pilkington said.

There had been no discussions with Port of Tauranga on the potential for a super-port and he said there would need to be detailed economic analysis before the rival ports company would consider whether it wanted any participation in one of the two favoured sites for relocation of the Auckland port.

"We have a fairly effective infrastructure capable of delivering imports to the Auckland market through KiwiRail and Metroport and, again, that option is far from fully utilised and the ability to expand that is significant," Pilkington said.

He said he was a "bit bewildered" by the council-owned Ports of Auckland strategy, given it bought 33 hectares of land in Hamilton for a freight hub earlier this year and last year opened an intermodal freight hub in Mt Maunganui.

"Why invest Auckland ratepayers' money in Hamilton to attract cargo into Auckland? Why do that if you're facing current capacity constraints to serve your existing market?"

Ports of Auckland said it had no comment to make on the super-port suggestion in the report.

Previous efforts over the years between the two port companies to consider a merger or ways to work together have failed despite issues such as the need to accommodate next generation container ships, shipping line rationalisation, and North Island overcapacity in container handling.

The EY consultants' study to the working group said a National Port Strategy for New Zealand's 14 major ports would drive greater supply chain efficiencies and better capital planning.

It said the latest Ministry of Transport data suggested there is a large number of intra-North Island empty container movements due to the current trade imbalance – Ports of Auckland is New Zealand's largest container import port while Port of Tauranga is the largest port for container exports. The imbalance requires a large movement of empty containers around the country, which is costly and inefficient.

Australia introduced a National Ports Strategy in 2011 covering container and bulk ports to improve governance, land planning and future infrastructure requirements. There have been many calls over the years to New Zealand to adopt a similar strategy.

But Mr Pilkington said it would be difficult to reach agreement on a national strategy between the council owners of the ports who see them as important for regional development, the shipping companies, and exporters.

"I do believe the market will ultimately drive rationalisation and sensible economic behaviour though there will be lots of ups and downs on the way. Once we get the big ships coming to New Zealand we will see what that does," Pilkington said. "My advice to ratepayers is to keep asking questions on what their return on capital is from putting money into these assets and what's the guaranteed return on it."

(BusinessDesk)