KEY POINTS:
New Zealand needs to establish a ports hierarchy and fast, says Port of Tauranga chief executive Mark Cairns.
Recent analysis by an investment bank shows free cash flow (operating cash flow minus capital expenditures) for the country's ports sector has been negative since 2006.
"That really is a disgrace, that there are literally billions of dollars of assets tied up in regional government ownership, and the sector as a whole is performing negatively..."
Cairns says we have 16 commercial ports in a small island trading nation that is a huge distance from its markets.
Nine of those are investing to be international container ports.
"Really, unless we get a ports hierarchy sorted out, we can't invest optimally in our road and rail connections to the port - we continue to invest sub-optimally, trying to spend our available infrastructure spend across too many nodes in the country."
Unless New Zealand gets its act together it risks its trade being trans-shipped through Australia, and losing its direct connections to North America and Europe, Cairns says.
He says we need to consolidate in order to be able to invest and cater for the next generation of vessels.
The Port of Tauranga boss says heavy-handed regulation or direct government intervention is not required, as the answer already lies in the Port Companies Act.
The act says port companies must be operated as successful businesses. "Negative free cash flow is not a defining term for a successful business."
