NZ government closes in on Auckland

Port of Auckland The final report by the Upper North Island Supply Chain Strategy working group has been released. Image: NZIER

The New Zealand government has confirmed its next step in light of Cabinet’s position that freight operations in Auckland are no longer viable.

Associate Transport Minister Shane Jones said the government will now embark on a short work programme to enable decision-making in the first half of next year. The final report by the Upper North Island Supply Chain Strategy working group was released on 12 December.

“Shifting Auckland’s Port will be a huge undertaking and, if done right, will have benefits for all of New Zealand, not just Auckland and Northland,” said Mr Jones.

The Upper North Island Supply Chain Strategy Working Group’s second report, published in October, recommended the closure of the Port of Auckland, development of Northport to capacity equivalent to POAL and continued operation of the Port of Tauranga.

The report was accompanied by a heavily criticised economic analysis of supply chain scenarios by a consortium of advisors led by EY.

EY's report was labelled inadequate by economic consultancies the New Zealand Institute of Economic Research (NZIER) and international firm Castalia.

"Our initial review suggests that the financial (and consequentially fiscal) costs of the proposed relocation are materially under-estimated," said Castalia said.

It said that net benefit of full relocation of the port to Northland is "likely to be negative”, while NZIER said it is “extremely unclear” whether it is feasible to move Auckland’s operations to Northport.

Ports of Auckland (POAL) said that the reports by Castalia and NZIER showed that the idea of moving Auckland’s port to Northland is seriously flawed

A new study by NZIER has also found closing Auckland’s port will increase the cost of imports by between NZ$533m and NZ$626m a year.

Mr Jones added: “It remains my view that Northport is the most sensible relocation option but I accept this is a whole-of-government decision and the report has given us a range of economic, social and environmental factors to consider. I look forward to reporting back to Cabinet in May 2020.”

Port of Tauranga's chief executive, Mark Cairns, said: "A two port solution is workable, subject to land-side infrastructure investment, and would address concerns about economic land use in Auckland."

He added: "International experts have told us that Port of Tauranga can easily accommodate up to 2.8 million TEUs1 on our current footprint. We already have the next stage of capacity expansion under way."

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