Bruce Bisset: Time to bring HBRC councillors on board

Bruce Bisset

Apart from the haste with which the proposal to sell Napier Port has moved into and through the public eye, the Hawke's Bay Regional Council itself appears to be sleepwalking through the process.

Almost as if they're just there to rubber-stamp what's put in front of them. Such as the creation of HoldCo, a new council-controlled organisation (CCO) to own and sell shares in the port.

See, at first look there appears no special reason why the council's investment company, HBRIC, can't handle the listing and initial public offer (IPO) of shares itself. After all, it's already a CCO with its own liability protections separate from council, and Napier Port is effectively a 100 per cent-owned subsidiary company of HBRIC.

Certainly the suggestion in the consultative material that without HoldCo both HBRIC and the port company would have to have shares to offer the public is bizarre; HBRIC would have to give shares to the port in order for the port to then on sell them, and why would they?

However on the back of independent advice around contingent liabilities and the need to be a cleanly-defined corporate entity when doing an IPO, setting up HoldCo is probably the best commercial approach. Probably.

Even so, the real devil in the detail is that the Port of Napier's directors will be HoldCo's directors. Pardon?

Think about it: HoldCo is given 100 per cent of the port shares, all of which are under the control not of its parent company nor the council, but of the people who are in effect the beneficiaries of the subsequent sell-off of 49 per cent of those shares to the public.

And as soon as the IPO takes place HBRC loses all control over who the directors of HoldCo are, for a publicly listed company is subject to a completely separate set of rules around directorships. And, doubtless, significant minority shareholders will want their own people on the board.

At which point, despite they'll still nominally own at least 51 per cent of it, all vestige of even the idea of the council maintaining any sort of "control" over the port goes out the window.

Remember, a year ago the council chairman admitted even he did not know the names of all Napier Port's directors!

Yet at last month's meeting to set this process in motion, no one so much as blinked when passing the motion to appoint those directors as the founding board of HoldCo.

Fortunately councillors seem to be waking up and having second thoughts. Rumour has it the public-excluded part of a meeting last week discussed putting some direct council representation into HoldCo. If it didn't, it certainly should have.

Consultation on the HoldCo proposal and sale process closes on Monday. If you do nothing else this weekend, a one sentence online submission urging HBRC to stack HoldCo's board with councillors, and not port directors, might help ensure ratepayers actually retain some measure of control of our most valuable public asset.

* Following on from last week's column on the fishing quota management system's shortcomings, the Ministry of Fisheries is currently reviewing parts of that system.

An important proposed change would see commercial finfish size-limits scrapped and all fish caught measured against quota – as opposed to the current system, where under-size fish (generally dead or dying) are "returned" to the sea, and not counted.

This change would significantly improve sustainable management of all fisheries by more fully accounting what is and isn't there and help drastically reduce illegal practices. Submissions close Sunday, March 17.

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