Gren Christie: Port should be publicly owned

"The port needs to be in 100 per cent public ownership."

Is there a chance our port could slip from the control and ownership of the HB people and should we care?

The answer is yes.

The port needs to be in 100 per cent public ownership for the following reasons:

1. As the port dividend helps pay our Regional Council's rates, any profits diverted to private shareholders would have to be made up by rate increases, a reduction of council services or more port debt.

2. The port is in a genuine win/win situation.

It makes money on exports and on imports, 99 per cent of which go across the wharf.

If the dollar's down, exports are up. If the dollar's up, imports are up. It is not reliant on one trade so risks are spread. It is a very profitable enterprise to own.

3. It is a strategic asset because it's the farmgate for Hawke's Bay.

For that reason alone, it is too important not to be in total public ownership. Whoever controls the port controls what goes over the wharf and at what price.

4. Private shareholders will demand more profit.

This is achieved by increased cargo-handling charges, more casualisation of the workforce and greater flexibilities with split shifts and reduced full-time staffing. More and more workers would be living off the end of their mobile phone hoping for work, or worse, be replaced by Third World ships' crews or "suitcase stevedores".

A dangerous job would become a lot less safe and less healthy. It is unlikely that port workers would take this lying down so disruptions to trade would undoubtedly occur.

Could we lose control and ownership of the port?

This risk is always there as it is always seen as a juicy chunk of infrastructure for private investors.

Within HBRIC voices have spoken for a selldown of port shares. I imagine similar but unspoken thoughts occur within the ranks of the sitting and prospective regional councillors who have closely aligned themselves with HBRIC.

One way to arm-twist the public is to load the port with debt and then offer up the choice of ever-increasing rate rises or flogging off our last piece of family silver.

Debt is mounting. In 2007 it was $11.5m. In 2016, $84m. Much of that has gone into infrastructure and some maintenance. A new wharf is expected to add $50m plus to that debt.

The dividend to HBRIC still rolls in as an alternative to paying down this debt.

This may be economically sustainable but when HBRIC uses the port to underwrite the dam, things could go sideways.

How this could happen?

1. Most large dams have an average 96 per cent cost overrun.

Since the first RWSS cost estimates, the now estimated cost has almost doubled.

HBRIC says it has this covered with a fixed cost contract.

It would be unlikely that there isn't some wriggle room for the contractor to cover extra costs due to unforeseen circumstances, eg, site problems or necessary design changes.

This loophole in fixed cost contracts is often where the contractor makes their real profit.

2. If the dam profitability predicted by HBRIC fails to materialise that would mean ongoing increased debt.

3. If profit is based on pollution of our water, it will only take a change in Parliament to have effective environmental protections enforced nationally.

This will be driven by the ever-mounting frustration and anger at the current abuse of our waterways. The Tukituki already has nitrates too high to prevent algae blooms which have led to dog deaths.

The new irrigation zone added to the scheme in an attempt to make the project economically viable has waterways considered over-allocated in terms of nutrient concentrations.

4. Two major investors have walked away from this project. That indicates high risk. I imagine the shark cruising the economic waters is only there because our port backs this new deal

If the RWSS is to be foisted on to us, $80m is enough of public money invested and we should carry no more liabilities.

We run the risk of the dam becoming a dead albatross round the neck of the port.

Regional Council elections are upon us and those standing need to let us know where they stand on this issue

- Gren Christie was a worker and union rep for 20 years at the Port of Lyttelton and more recently on the RWSS stakeholders Group representing an environment non-government organisation.

- Views expressed here are the writer's opinion and not the newspaper's. Email: editor@hbtoday.co.nz