Auckland Council is seeking a review of decisions made by the former chief executive and Board of Directors of the Ports of Auckland (POAL) to commence a now-cancelled project to automate its Fergusson Container Terminal.

Mayor Phil Goff and Auckland Council chief executive Jim Stabback say the decision to cancel the project, which was announced today by POAL, is appropriate in the circumstances, but a review is needed to ensure proper processes were followed by the Port’s former leadership, and that similar failures cannot occur again in the future.

“The decision by POAL’s previous chief executive and former board is of deep concern to council, as the sole shareholder of the Ports,” Mayor Goff says.

“While a significant portion of the investment made by POAL has gone towards valuable infrastructure such as container cranes and a new third wharf that will provide ongoing value, the decision by POAL’s former leadership to embark on the project has resulted in wasted expenditure of around $65 million.

“Under the Port Companies Act, the board of directors is responsible for running the Port Company and the shareholder has limited ability to intervene in operational matters. At the time of the decision, an intermediary body – Auckland Council Investments Limited (ACIL) – further kept the Port at arm’s length from council oversight. It has since been abolished,” he says.

A substantive shakeup of the Port’s leadership has also been instituted over the past 12 months and moves taken to strengthen council oversight of POAL.

“I have consistently expressed the view that when it comes to implementing new technology, being at the cutting edge of implementing that tech carries a high level of risk. I am concerned that the former chief executive and board did not do sufficient due diligence to determine how those risks would be managed before committing to significant capital expenditure.

“The new board and chief executive have made an appropriate decision in the circumstances and are not to blame for the losses that have been incurred. However, along with council’s chief executive, I have asked the POAL board to review the processes that led to the decision to undertake the project, to ensure that proper process was followed and to determine whether the decisions were made based on adequate information and advice.”

Auckland Council chief executive Jim Stabback says it is important that a review takes place as soon as possible.

“The performance of POAL is important to Auckland, our communities and businesses,” he says.

“Following recent changes to the POAL leadership, including a new chief executive and board chair, POAL has the skills and expertise needed to help address its challenges and lift its performance.

“The new board and chief executive are clear on the council’s expectations around improving performance and ensuring POAL is able to deliver effectively for Auckland and New Zealand.”

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