New report shows major downsides to Ports of Auckland privatisation scheme

A new report com­mis­sioned by the Mari­time Uni­on of New Zea­l­and shows major down­sides to any privat­isa­tion of oper­a­tions at the Ports of Auck­land.

The report entitled “The costs and risks of privat­ising Ports of Auck­land oper­a­tions” draws on inter­na­tion­al research includ­ing the exper­i­ence of Aus­trali­an ports in recent years.

Auck­land Coun­cil is review­ing options to sell an oper­at­ing lease for the Ports to a glob­al net­work ter­min­al oper­at­or, and has com­mis­sioned con­sult­ants to seek expres­sions of interest.

Mari­time Uni­on of New Zea­l­and Nation­al Sec­ret­ary Craig Har­ris­on says a key con­cern com­ing out of the report is the poten­tial for price hikes hit­ting port users – then being passed on to loc­al industry and con­sumers.

Mr Har­ris­on says privat­isa­tion of oper­a­tions at Ports of Auck­land is estim­ated to hit loc­al port users with NZ$70 mil­lion in extra costs annu­ally.

“Any private oper­at­or in Auck­land would be in a mono­poly pos­i­tion and would seek returns on its invest­ment, on top of the lease cost – the profit has to come from some­where.”

He says privat­ised port oper­a­tions in Aus­tralia have seen sur­charges of over AU$100 per con­tain­er imposed on port users, who have no oth­er options.

“The failed auto­ma­tion exper­i­ment at Ports of Auck­land shows there is no fat to be cut at the Port, and private profit through privat­iz­a­tion would be extrac­ted from port users and the loc­al eco­nomy.”

Mr Har­ris­on says the primary value of the Ports of Auck­land is how it facil­it­ates trade.

He says there is grow­ing con­cern there is no clear strategy for the Ports and decision mak­ing is being driv­en on a short term, ad hoc basis.

“The Ports of Auck­land is going through the a peri­od of growth and sta­bil­ity under new lead­er­ship with improv­ing returns, and should be left to get on with the job and not meddled with.”