Merger of Auckland and Tauranga ports 'logical'

Will the ports at Auckland (left) and Tauranga merge?

A merger of the ports of Auckland and Tauranga has the potential to reduce port costs while remaining independent from the dominant international port and shipping companies, the Employers & Manufacturers Association (EMA) said today.

New Zealand's two biggest export and import ports said earlier today they were in talks about ways to work together, including the possibility of a merger of their operations.

Port of Tauranga chairman John Parker today confirmed the talks were well advanced and a decision was expected before Christmas.

>> Background: Facts and figures about the two ports

"Though Auckland and Tauranga have respectively the largest bulk and container ports in New Zealand, both are small by international standards, so the proposal makes sense," said Alasdair Thompson, EMA's chief executive.

"However, port customers ought to be allowed to share in the development and investment savings that should flow from the merger, and from the port monopoly it would create in the top half of the North Island.

"The regulatory framework to ensure this can take place will be challenging, but is imperative for the protection of port customers", he said.

"While the issue of competition is important, most port customers realise the dominant shipping companies are currently capturing substantial benefits at present by playing the two ports off against each other", said Mr Thompson.

"New Zealand arguably needs one port of international scale as ship sizes continue to increase; otherwise the risk is our containers will be shipped via Australia at some future point."

He said the merger would also allow Auckland and Bay of Plenty regional councils to rationalise their dominant ownership of both ports.

"For example, they could retain ownership of surplus port land for redevelopment, such as the Tank Farm, and of operating port land, but publicly float the combined port company allowing a solid investment opportunity for New Zealanders savings while freeing up ratepayers' capital for investment in other infrastructure."

Geoff Vazey, Chief Executive of Ports of Auckland also confirmed the discussion rumours today.

"We are having constructive talks covering a range of issues and options. We are mindful of the responsibilities both companies have to our shareholders and stakeholders and we are looking at areas where there might be benefits that we can readily achieve, reflecting the complementary nature of our operations and skills", said Mr Vazey.

- NZHERALD STAFF