Tom Belford: Port financing needs study, not slogans

Tom Belford

"Shallow and shallower."

That's how I'd describe the superficial and disappointing politicising of the Napier Port's future development by MP candidates Anna Lorck and Stuart Nash. You can decide which is which.

Both have chosen, probably in concert, to pander to their electorates, attempting to whip them into a frenzy over an imagined threat that the people of Hawke's Bay will be somehow robbed of our precious regional asset, the port.

From their public comments, neither seems even modestly acquainted with the competitive challenges facing the port, but shallowness has the virtue of simplifying their sloganeering.

The port must invest in infrastructure - very substantially - simply to remain a competitive port-of-call in the ocean shipping marketplace. Invest, for example, in off-site storage, capacity to dock more and larger ships, equipment to load and unload wider ships. Add to this "competitive" challenge the need to handle steadily increasing export cargo from our region's growers and manufacturers.

However this additional required investment in one asset carries serious risk to the port's owners, the people of Hawke's Bay, represented by the HB Regional Council as ultimately the 100 per cent shareholder.

If we need a reminder of this, consider the fact that Wellington's port will lose at least two years of revenue due to the recent earthquake there. In this case, Wellington's bad luck is Napier Port's good fortune. The situation could be reversed.

And from a purely financial risk management perspective, it becomes increasingly unsound for the regional council, steward of the people's investment, to lock a larger and larger percentage of the public's investment into this one asset.

At the same time, the success of Napier Port yields direct benefit to ratepayers, helping to reduce regional council rates that otherwise would need to be charged to ratepayers to meet the public's increasing demands for more energetic protection of the region's environment. Against a backlog of environmental restoration needs, these demands will grow, not diminish.

The port's dividend contribution to the regional council is a quite tangible ratepayer value, arguably surpassing the symbolic importance of 100 per cent ownership.

So consider that there are several objectives to be achieved here:

1. Grow the competitive standing, capacity and value of the port, creating a bigger pie supplying larger dividends;

2. Lessen the risk of concentrating the public's investment in one vulnerable asset;

3. Secure future - and hopefully growing - dividends to help fund the regional council's environmental mission; and,

4. Accomplish these goals while maintaining full, local strategic and management control over the direction of the port.

A range of options for achieving all of these goals, in tandem with one another, must be examined.

The options to consider are complex and not all immediately obvious, but - at the investigative stage - should include issuing new shares, selling a minority interest, additional borrowing, and/or entering strategic alliances with other transport entities (including other ports). And various combinations and permutations of these.

Any path that involves dilution of public ownership can be caveated by controls on who can participate (for example, to ensure local control) and by mandating a minimum "control" level of public ownership remaining in regional council hands (ie, in the hands of your elected representatives).

These are challenging issues requiring careful consideration, including full and open public debate before any action is decided upon by the shareholder, your elected regional council. That's the path to which I am committed, and I am confident my fellow councillors are equally so committed.

The path will be thoughtful and inclusive, irrespective of hysterical red signs littering the roadway.

• Tom Belford is a Hawke's Bay regional councillor.