Politicising port investments

26 Mar 2016

COMMENT: Should local politicians be made accountable for the decisions made by their regional ports? It is an interesting question which is currently being debated in New Zealand, where all ports have either majority or 100% regional council ownership, often through a holding company, writes Dave MacIntyre.

The NZ Shipping Federation (representing domestic shipping lines) is intending to mount a political campaign before the local body elections in October, forcing local politicians to front up for the results of investment decisions by their ports.

Since port privatisation in the late 1980s, most ports have been seen as ‘cash cows’ by local bodies, returning handsome dividends year after year. The governance structure, with ports having their own boards, and reporting to holdings\companies at arm’s length from the councils which are the ultimate owner, was never questioned by politicians.

Now however, as the size of ships calling in New Zealand edges ever upwards, several ports have to make decisions on whether to remain in the game for prime deepwater services.

For some, such as Tauranga and Port Chalmers in Otago, the choice is a no-brainer. They want to retain their front-line container market share and are already well down the track. Others however now have to make that call.

Two – Napier and CentrePort (Wellington) – are considering dredging plans, with Napier also planning a new berth for larger ships.

The Federation’s argument is that the business cases for any such investments need to be examined by local politicians because the cost of the increased capital investment will have to be funded by higher port charges or higher property rates, or both. Hence roping the election candidates into the debate later in the year.

There is an axe to grind, of course. The reason the federation doesn’t want to see unfettered port expansion is because its members have an interest in providing feeder services from these ports to the hub ports. Dredging to allow larger ships to make direct calls challenges that scenario.

Axe to grind or not, the Federation has laid down the gauntlet to local politicians – make the port directors prove their business case, or face political consequences.

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