Bruce Bisset: Hold your friends close ...

Bruce Bisset,

Hawke's Bay Regional Council's meeting this week to decide to form a holding company to facilitate any public float of Port of Napier shares was notable more for the questions that weren't asked – or not answered – than the decision to begin consulting publicly on this arrangement.

One excellent one was why the council should defer to the Port board over what to call its new company. Discussion petered out without adequate answer; and thus was the underwhelming HoldCo created.

That aside, in the public interest I'm departing from my usual format to simply list in detail one aspect of the entire process I find fascinating. I leave it entirely in your hands, dear reader, as to what you make of it.

A company called Flagstaff Partners Pty Ltd, a 100 per cent subsidiary of Flagstaff Partners Holdings (formerly called HoldKing), is a "mergers and acquisitions" corporate advisory firm based in Melbourne. Stephen Bradford has been a "senior adviser" with the firm for several years.

Bradford was CEO of Port of Melbourne Corporation from January 2004-December 2013.

He then became specialist adviser to Flagstaff on the Port of Melbourne "transaction" (2016), which resulted in that publicly-owned port being commercially leased out for a 50-year term.

He was also involved (2015) in a scoping study for the Northern Territory Government examining the future of Darwin's port – which was ultimately leased out to Chinese interests on a 99-year term, causing a stir with the US over its strategic value.

Bradford is currently chairman of Tasports, which runs all major ports in Tasmania.

His involvement with Napier Port began in November 2014 with his appointment (by HBRC) to the port's board for a three-year term commencing December 15 that year. He remained based in Melbourne, commuting for meetings.

The port board and the council began discussing a planned expansion and how to finance it at the beginning of 2016 (based on chairman Rex Graham's repeated statements mid-2018 that discussions had been ongoing for "more than two years").

Bradford – still employed as a senior adviser by Flagstaff - declared a (continuing) conflict of interest viz Flagstaff in 2016; he was reappointed to the board in 2017.

In April 2017 Flagstaff Partners was engaged by the Port to advise on funding options for the expansion; Bradford reportedly did not take part in any decisions made by the Port board on this issue.

Flagstaff, on the Port's behalf, presented options for funding Napier Port infrastructure development to HBRC at workshops in October 2017 and May 2018, as well as meeting with HBRIC's board.

Bradford resigned from the port board in July 2018, saying while he had a "minor role" with Flagstaff he was resigning on account of a "public perception" of conflict of interest, rather than an actual one. He returned to Melbourne, still holding a senior advisor role in Flagstaff.

Also in July, the council moved to consult the community on options to fund the port development, and later consulted on four options, including a long-term lease arrangement.

This (lease) was apparently the preferred option of the consultants, but the council decided a partial public sale was its preference; it formally adopted this, post-consultation.

Now, ahead of the decision to create HoldCo to handle the "mechanics" of the share float on behalf of council and the port, HBRC agreed to engage Flagstaff Partners as the "independent commercial advisor to the process" of arranging an IPO.

There's nothing unusual in using one company and its advisers in several capacities for a project of this scale.

However I believe the closeness of this relationship needs to be publicly transparent - hence this column.

* Bruce Bisset is a freelance writer and poet. Views expressed are the writer's opinion and not the newspaper's.