Fixing the myriad problems at the Ports of Auckland isn't an easy task. Video / NZ Herald
Privatisation of the Ports of Auckland would be a disaster for Auckland, says the Maritime Union.
Responding to plans by Auckland Mayor Wayne Brown to clear the way for a possible sale of the port’s operating business, union general secretary Craig Harrison said relinquishing control of the strategic asset wouldbe a “lose-lose situation” for ratepayers, workers, and businesses.
“The Australian experience is privatisation of port operations creates another layer of management costs and profit-taking for no real benefits,” said Harrison, whose union represents most of the workers at the port.
Maritime Union of New Zealand general secretary Craig Harrison. Photo / Supplied.
A spokesperson for Brown said the Maritime Union, Aucklanders, and stakeholders would be involved before any decisions are made about the future of the port.
The mayor has no plans to sell the prime waterfront land, but the sale of an operating lease could lock up the land for port operations for decades.
Brown was elected as Mayor of Auckland last year, promising to free up port land for public use and improve financial returns to ratepayers. On the election hustings, he said the port land was worth $6 billion and a new board of directors would be told to deliver $200 million of rates plus $200m of dividends.
Three council-commissioned reviews into the future of the port are expected to land on Brown’s desk in the next fortnight before going to confidential workshops and a confidential governing body meeting for decisions on the next steps forward.
From there, future plans for the port are likely to be included in the new 10-year budget process starting later this year.
Harrison said potential outcomes could include customers facing higher terminal charges, infrastructure being run down, workers’ pay and conditions being attacked, and a lack of accountability by overseas equity investors.
“The risks of going down this path are massive, and the only beneficiaries in the long term would be the new owners.”
Auckland Mayor Wayne Brown has hung his hat on making changes at Ports of Auckland. Photo / Michael Craig
He said the “one-off sugar hit” of privatisation would soon wear off if the port was permitted to effectively become a private monopoly.
“Splitting off leased port operations from land ownership does not change the fact the ports would be privatised and the new owner would have huge leverage over Auckland,” Harrison said.
Ports chief executive Roger Gray said potential benefits of selling an operating lease are the opportunity for global best practice, digital integration, and potentially a linked-up network with Australian ports.
A lease sale could involve a lump sum payment, annual rental, profit share, or a combination of these. The biggest negotiating issue will be the term of a lease with port operators expected to want a long-term lease.
A source said Brown is “willing to compromise and do deals” on a lease but would not be interested in a long-term lease resulting in Aucklanders losing control of the land for decades.
The union said the new management and the union workforce are working in a constructive and positive way, and with the cancellation of the automation project, the ports are back on track to delivering to Auckland.
Harrison said there is no wide support for privatisation and most ratepayers do not want to see key assets sold off.
Secret plans to sell the port business got under way by former Mayor Phil Goff and senior council staff when global port operator DP World made an unsolicited $1 billion bid for the port in 2021.
The future of the Ports of Auckland is up in the air. Photo / Michael Craig
A mayoral spokesperson said the future of the port’s waterfront land and its operations is one of the mayor’s highest priorities.
To help inform the council’s options for Ports of Auckland, said the spokesperson, the council has canvassed the views of port operators and investors but has not received final advice.
Brown met with representatives of DP World on a tour of the Port of Busan during a visit to the World Climate Industry Expo in South Korea last month, the spokesperson said.
“He has allowed a process to continue that will enable the governing body to consider all other options including an operating lease before they make any decision.
“The mayor himself says he is open-minded about the best solution and is generally interested in reading the advice and seeing what councillors think about it,” the spokesperson said.
Brown has been open about selling council assets. Two weeks ago he achieved a partial sale of the council’s shareholding in Auckland airport to help address a $325 million budget hole.
