Constraints see Auckland and its port head in different directions

Picture / Greg Bowker

The fortunes of Auckland and its port are inextricably linked - Auckland was founded where it is in large part due to the port.

But expansion constraints now mean the city and its port are about to head off in entirely different economic directions, their futures divided by widespread opposition, then a court decision, banning the port expanding into the harbour to cater for bigger ships.

As the port has pointed out, just as aeroplanes are getting bigger to carry far more passengers, so the shipping sector sees sense in operating much larger vessels and it is those larger vessels it needs to cater for.

The attempted port expansion is a topic that raises most people's ire and not a good one for dinner parties unless you're sure in advance that the room is with you, or you're spoiling for a battle.

But now that the dust has settled over this fight, and Auckland Council is conducting a new study, Auckland financiers are beginning to consider the next step.

How to advance the interests of this city, with a port tightly constrained, unable to meet the increasing demands for bigger ships, be they for cars, freight or cruise lines, unable to bring goods in for a rapidly-expanding population?

One area being focusing on, and which port officials are also talking about, is future ownership models.

"Opponents have been talking about new ownership models or structures, like Sydney's port which has been sold so there's a concession for operating container terminals," one insider said.

Others are seeking a national port strategy which could lead to rationalisation in some areas and expansion elsewhere.

One institutional investor said more information was needed.

"No over-arching analysis has been done as to what maximises the value of the Ports of Auckland to Auckland and the country. It seems ludicrous to park cars on extraordinarily valuable real estate which could potentially realise vast sums for the city if it was put to its highest and best-value use," the investor said.

"The costs of travel congestion from trucks and of reclamation and dredging also need to be considered from a national interest perspective. A piece of work needs to be done examining the role of Auckland vis a vis Tauranga and Marsden. The only party that would seem to be able to lead and take an overall view is the Government."

Is it time for intervention?