While borrowing the funds means the Regional Council retains ownership, it also continues to carry the full risk of both natural catastrophes or man made disasters including economic downturns and unfavourable commercial events such as shipping companies deciding to consolidate their operations elsewhere.
These risks which will be borne by the people of Hawke's Bay but can be reduced with some external shareholding. External equity might also bring in additional expertise to improve port operations.
The Port of Tauranga is a publicly-listed company and it seems to have done them no damage. Whatever we decide we must avoid creating an opportunity for another port to take control so as to concentrate trade elsewhere at our expense.
Of course allowing some outside shareholding must not result in loss of control. The port is much more than a few million dollars a year to help keep regional council rates down. It is our gateway to the world for a whole range of horticultural, viticultural, agricultural and wood products.
The additional cost if shippers had to truck their products through another port such Tauranga is estimated to be around $1600 per container. For a container load of apples worth say US$6500 this extra cost could seriously affect the viability of horticulture.
Additionally there would be a significant increase in the risk of damage to the cargo. When multiplied by the 22,000 containers of apples we currently export the additional cost of shipping to another port could cost us many tens of millions of dollars. If we add half a million tonnes of pulp, over a million tonnes of logs and as many containers again of meat and other products, the true value of our port becomes apparent.
So while the profit the port makes is useful, the true value of our port is the contribution it makes keeping exporters and importers cost effective and competitive.
We can go further and ask ourselves whether Heinz Watties could remain here without the ability to directly import tinplate and other materials needed for their manufacturing, then export high volume relatively low value food products to markets around the world.
Even the $20 million estimated spend by cruise ship passengers is totally dependant on the port, plus the port is a major local employer of highly skilled, well paid workers.
We might even better secure the present income stream the port provides by reinvesting some of the capital now locked up in the business though I too share Stuart's concern over past decisions made by the Regional Council.
For now we have all our eggs in one basket and that can be a risky as both Lyttelton and Wellington have discovered.
We must consider our own vulnerability when deciding how to move forward. But whatever we decide we must do what is best for Hawke's Bay and not allow ideology to steer us in a direction that impedes the port's ability to provide the links that are essential for our prosperity.
Simon Nixon is a Hastings District councillor.
