Trans Tasman's Political Pulse - July 04, 2017

Ports Rationalisation –
Is Competition A Waste Of Money?

INSIGHTS ABOUT THE NEWS - The decades old debate over whether there is a need for centralised decision making over rationalising NZ’s ports is back in focus again as the sector contemplates the possibility of wasting large amounts of money on capital.

As reported in the trans-Tasman’s sister publication, NZ Transport Intelligence Business Alert, the development of regional ports and their rivalry have long been a debating point. On one hand, the argument is competition will sort the issue out and bring rationalisation with the right roles for the right ports. Others argue NZ is too small and there should be centralised decision making about which ports handle the big ships.

It’s an issue which has been tossed around for decades, but has become more sharply focused as some local authority-owned ports press ahead with plans to be “big-ship capable.”

The capital’s Centreport wants to dredge Wellington Harbour. Port of Napier has plans for a $100m upgrade. Lyttelton has a $56m project to upgrade its facilities for cruise ships, which Mayor Lianne Dalziel says will not return its cost of capital but will provide economic benefits for the region. Port Otago has also won resource consent for dredging to make it big-ship capable.

Also, to complicate the issue, there is the ongoing argument about the Port of Auckland, with a strong lobby resenting the use of central city waterfront for a port and its storage usage. They are at odds with PoAL who want to expand.

Port of Tauranga chairman David Pilkington says the arrival of larger vessels means it is inevitable there will be fewer hub ports as it isn’t feasible to replicate 13 regional container ports with the freight volumes available.

Pilkington argues ports in general sit in local govt ownership and are viewed emotionally as essential to regional development. Pilkington says duplicating a whole lot of big ship-capable ports is clearly going to be a financial disaster.

At a time when investment capital for infrastructure is in short supply, the question must be asked: does NZ need half a dozen big-ship capable ports?

Trans Tasman’s sister publication, The New Zealand Transport Intelligence Business Alert, is a weekly source providing you with in-depth news, analysis and opinion on NZ’s transport and logistics sectors.

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