Auckland Council ditched investment experts: Is that why port is causing a headache?

Questions just beginning over Ports of Auckland's abandoned container automation project. Photo / File

Costly problems at Auckland's port could have arisen because billions of dollars of public investment are now being monitored by "generalists" not specialists at owner Auckland Council, suggests councillor Chris Darby.

He wants that possibility investigated as part of the council-ordered investigation into the costly failure of the port's container terminal automation project, abandoned six years on and before implementation.

Darby, a senior councillor, said not having "professional eyes on the prize" resulted in the council being "blindsided" by Auckland International Airport when it did a capital raising two years ago and the council's shareholding was significantly reduced.

The port automation project will be written off for $65 million, but more capital expense is ahead to convert a large, $70m fleet of machines purchased as autonomous.

Harder to quantify is the cost to the Auckland economy and wider supply chain because the country's main imports gateway wasn't functioning at full capacity in the post-Covid shipping boom while it struggled to implement its choice of autonomous system.

Darby, who last year accused the council of being a "lazy" port owner, said he's asked mayor Phil Goff to include a review of several aspects of the council's role in the upcoming investigation into the failed project.

It was central to a wider terminal development programme, on which the port had, at October last year, spent $330m.

The probe will be done by the port's largely new board of directors, brought in by the council last year when automation project delays and systemic serious health and safety issues became evident. No details of timing or who exactly will conduct it are yet available.

Darby said he's asked Goff for the automation post-mortem to include a look at whether the council did its job, whether its structures were fit for purpose in overseeing the port company, and whether the absence of a specialist on the council payroll had contributed to the issue.

Darby said before Auckland Council Investments Ltd (Acil) was axed in 2018, it had such a person in chief executive John Crawford, ex-Treasury, a former top floor adviser in the Beehive, and currently an associate commissioner at competition watchdog the Commerce Commission.

Acil, established in 2010, held the council's shares in Ports of Auckland and Auckland airport, managing around $2.3 billion of public investment assets. Its chairman was former Financial Markets Authority chair and veteran company director Simon Allen.

Acil was dropped in 2018 by the council, which predicted savings of $500,000-$800,000 a year from its disestablishment.

"There is some suggestion the port company has been pulled closer [to the council] in the absence of Acil. That move might have merit but we have also lost our specialist eyes and replaced [them] with generalist officials," said Darby, who is seeking re-election this year in North Shore.

"You don't actively monitor several billion dollars of public investment - POAL [the port] and Auckland International Airport Ltd - with generalist officers.

"We were blindsided by AIAL when they raised capital in March 2020 and saw our shareholding drop under 20 per cent as a result of not having professional eyes on the prize."

The council's previous shareholding had been 22.3 per cent.