Of the $60 million left over from the dam, $50m was until very recently sitting in a term deposit account, and this is while we were paying interest on $86m loan.
Financially we would be far better if we used that $50m to reduce the debt to $36m and spread repayment over a longer period.
And $34m of that $86m was to buy two new cranes so some user pays could come into play.
The $50m is now in the hands of some financial people who will essentially gamble with it on the financial markets.
This is at a time when the international economic situation is looking very uncertain.
Trump verses China, Brexit, the rise of nationalism in Europe and in NZ, banks now demanding interest plus principal repayments of loans to dairy farmers and others.
Short-term interest rates in the US are paying higher than long-term interest rates — a recognised recession indicator as long-term prospects look bleak.
Ports like ours are sound investments and provide better recession-proofing than many other investments. This is because of their diverse income streams and we win whether the NZ dollar is up or down.
Post the 2008 global meltdown, our port continued to perform well.
HBRC has sown more confusion by first telling us we need to sell the port for port expansion to cater for very big ships BUT not megaships which are in fact very big ships.
We are then told the $350m for expansion can be paid for out of port income plus a dividend if only the port could get its $86m debt off the books.
Once that's off the books, it's plain sailing with ability to pay private investors a commercial return.
So after the port's part-sold, private investors will reap the benefit, not us.
Much of this benefit will come out of the port users' pockets.
In his verbal submission Xan Harding, speaking on behalf of the Wine Growers Association, indicated his enthusiasm for free-market forces .
He went to the extent of agreeing that if under privatisation port charges went up, that would be acceptable.
Free market rules and all that.
I would say here I'm good with his acceptance of paying raised charges if we keep port in 100 per cent ownership and we reap the benefits.
Good on ya, Xan and the winegrowers.
Their arguments keep shifting.
A new line is we have to sell off a chunk of the port to save the environment.
You can just about cut and paste that one from the dam propaganda.
Just substitute from "build a dam" to "sell the port".
The idea presented is we need a big cash fund for environmental reasons and we can get that by selling off part of the port.
But if you take say $80m out of the good safe investment in the port, where are you going to put it — what would be any better or safer?
It would be wiser in my opinion to pay off the debt as I and others have suggested and leave capital in the port. A percentage of dividend returns can be ring fenced to serve the environment.
Stuart Nash hasn't made things any more straightforward by inflating the supposed rate rise from HBRC's just under $100 to $143.
That is just adding to HBRC's scaremongering.
Maybe the man is too busy to also note that the port is saying it can pay a dividend and expand if we take its current debt away.
In fact, HBRC is saying we will still get the same dividend even if we give 49 per cent of it away. I haven't figured that one out yet. Perhaps they are going to print money or maybe it's just a tricky shell game.
Thanks Stuart and the HBRC, we needed the waters more muddied.
A clear point made in the submissions by the very qualified Clarence Jacobs stands out.
He basically said if the port could produce enough income to satisfy private investors it would then have enough income for bonds to be issued. With bonds we can retain 100 per cent ownership.
I think we should take note of this.
I also think that when financial times look risky we should look for a safe harbour. That would be our port.
