Opinion – Ports of New Zealand

It is gratifying but not surprising that shifting the Port of Auckland to Marsden Point ultimately did not become a non-negotiable condition of New Zealand First’s coalition with Labour and the Greens. Although Winston Peter’s concern for regional development is commendable, the proposal to shift the Port to the northern neighbour should be seen as simply made in the heat of the election.

Unfortunately, a huge amount of money has been spent needlessly on researching options for shifting the POA from its present location. These included the Manukau Harbour, the Firth of Thames, and a possible alternative West Coast site. It should have been obvious right from the start that none of these were worth any real consideration. The most publicised option apart from Marsden Point has been the Firth of Thames, but this proposal should never have seen the light of day. The cost of initial and ongoing dredging would be horrendously expensive, as would be the infrastructure for access to and from the port. The environmental and cultural cost would be incalculable.

Arguments supporting a move to Northport are equally unsustainable. The cost of upgrading the roads and extending the rail to that port would run into billions of dollars. The most obvious problem with Northport, however, is its location: it is far too distant from the main centres of population.

Over the past five years the greatest population and economic growth in New Zealand has occurred in “the golden triangle” of Auckland, Hamilton and Tauranga. Based upon long-term historical trends it is conceivable that the populations of the latter two cities will eclipse those of Christchurch and Wellington in due course. The bulk of New Zealand’s export cargoes originate in the central North Island and imports to this region are growing steadily.

Ideally a port will be situated in an area where both imports and exports will be maximised. It is uneconomic to have vessels departing with large export cargoes while arriving with next to no imports and vice versa. This underlines a fundamental weakness in the option of shifting the POA to Northport. It may have deep water, but it is simply too remote from the main centres of population and exports through that port would continue to be negligible (apart from forestry cargoes) in any event.

In reality, the answer to Ports of Auckland’s continued encroachment on its harbour is surprisingly obvious, but it has been given inadequate recognition by the so-called experts. The Port of Tauranga is New Zealand’s largest, fastest growing, and most productive port. The statistics speak for themselves: in the past financial year it handled 22,194,014 tonnes of cargo and almost 1.2 million containers. It is the hub port for New Zealand, handling a rapidly growing number of transhipped containers (transhipment to/from other New Zealand ports nearly quadrupling in the last 12 months). No other port has the capacity to handle ships carrying in excess of 9500 TEUs (twenty-foot equivalent units). It is considered to be one of the most efficient container terminals in the world.

Strategic planning by the Board and Management of the POT has been impeccable. Port of Tauranga Limited owns 50% of Northport, Timaru’s PrimePort and its container terminal, and Coda logistics. It has established one of New Zealand’s largest intermodal freight hubs in South Auckland and another in Rolleston. These give it ready access to and from the largest centres of population in both the North and South Islands.

Does POT have the ability to expand to cater for Auckland’s growth? This question has been well researched by the Board and Management of the port. Unlike POA which has strategic land holdings of only 75 ha., POT has 190.3 ha. adjoining its wharves. With comparatively little cost and environmental impact it can expand its terminal to handle 3 million containers a year, only a small proportion of which would be disposed of by road transport. KiwiRail has confirmed its ability to handle an increase of this magnitude.

For the past five years the impressive growth of the POT has been at the expense of POA. Import and export volumes have risen 50.9% as against Auckland’s 1.6% and it is expected that the gap will continue to widen year on year. Notwithstanding this, it is critical that POA continue to operate on its present site to help cater for long-term growth of trade in the region. The proximity of the Port to its customers needs to be recognised for the asset that it is. Moreover, while POT has huge capacity for growth, it simply cannot replace POA altogether.

The solution to the problem would appear to be to allow POA to limit its footprint to the present site without further encroachment on the harbour. This would allow for completion of the Fergusson Container Terminal and the provision of the accompanying cranes. No extension of the Bledisloe Container Terminal should be permitted. With increased efficiency and improved management POA can remain profitable while limiting its expansion.

Such a strategy requires a degree of co-operation between POT, POA, and Northport, involving dialogue between the port companies, the Auckland City Council, and possibly central government. In the medium term, extension of the rail to Marsden Point will probably be necessary. Between the three ports, catering for the growing volume of car imports should ease pressure on POA.

POA need not and should not move from its present site. At the same time, it must recognise that its previous ambition to be the dominant seaport in the region failed to appreciate its limitations, and rather than compete with the POT, it needs to co-operate with its neighbours.

Robert Keam is a Tauranga lawyer who has been pursuing an interest in New Zealand ports for the past 40 years.