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AucklandSeptember 30, 2017

Winston Peters might be right: is the future of the Auckland port up north?

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Are Winston Peters and the big party negotiators going to do a smart deal on the future of the Auckland port, or will they succumb to reckless nonsense? Simon Wilson explains the biggest issue for Auckland in the talks to form a government.

When a ship leaves the harbour, port is left (geddit). Except if it’s the good ship Winston Peters: he intends to take the port with him. Should we let him?

Northport is a deep-water port at Marsden Point, 35km away from Whangarei. It’s also 165km from Auckland. Specifically, 165km from the heart of New Zealand’s freight processing zone, the inland port at Wiri, just west of Manukau.

Winston Peters wants to move most of the functions of the Auckland port – in particular, handling vehicle imports and inbound containers – to Northport. He says it’s a natural deep-water port with enormous scope for expansion, and he’s right about that.

He says the costs of moving the port and establishing the necessary transport links have been vastly overstated, but he has point-blank refused to produce any evidence to show he is right about that.

He says the cost of transporting freight from Northport to the golden triangle bound by Auckland, Hamilton and Tauranga is minor. He is wrong about that.

He says the savings from moving the port will run into the billions, and that’s just nonsense.

He says Auckland could use the waterfront land far better – to earn more money and to create a better waterfront for all – and he is absolutely right about that.

He says the port and associated railways would help immeasurably in the economic development of Northland. He’s right about that, too.

Winston Peters speaking at a NZ First rally on the Auckland waterfront shortly before the election. (Photo Simon Wilson)

The proposal to move the port to Marsden Point is serious and achievable. If Winston Peters wants a legacy project we can all point to and say, he did that, this is the one. It would benefit Northland enormously, with very little downside – for Northland. It would benefit Auckland enormously too, although there would also be a large downside for the city.

What’s the balance of good and bad for Auckland? We don’t know. The analysis is not available. And all of that means it would be crazy not to investigate the proposal properly, and even more crazy to say yes to it right now.

The easiest thing and the hardest thing

Giving Peters the port is the easiest thing for Labour and National to agree to. And it’s the hardest thing.

It’s easy because they don’t actually have to agree to shift the port. All they need to do right now – all they possibly can do – is agree to commission a proper feasibility study. That should definitely be done. Auckland itself has recently had a go at doing it, and failed miserably. Now the government has to step in.

Here’s why. In 2015 Auckland Council established a “consensus working party” to consider the future of the Auckland port. No politicians, central or local, were involved, but the main defenders of the port on its current site were represented and so were the main proponents of the campaign to shift the port. Ports of Auckland Ltd (POAL), which is wholly owned by Auckland Council, was on the working party too.

It took them a year to reach their consensus, in the middle of 2016. That consensus was historic in several ways. They agreed the port did not need to expand on its current site (bar a couple of minor developments happening now). POAL had previously always argued it needed to expand. They agreed it was likely that in time the port would need to shift, and that the best options were probably in the Firth of Thames and the Manukau harbour. POAL had not previously accepted that either. And they agreed the scoping work on those options should be done.

Since then, little has happened, although the work is expected to burst back into life in October.

Northport: Right now, it mainly handles export logs. (Photo Simon Wilson)

The working party claimed to have looked at the option of shifting some or all of the port to Marsden Point (and also to Tauranga), but its report is strikingly light on detail. My sources suggest they did little more than discard those options.

Why? Because this was an Auckland group. They were looking to decide the best future for Auckland and its port. Their role, as they saw it, was to factor Auckland’s environmental and other needs into a plan that would ensure the growth of Auckland’s economy.

Giving the port to someone else was simply not an acceptable part of that plan.

Some people say it’s parochial for Winston Peters to want the port in Northland. In fact, almost every politician acts parochially on matters like this. It’s parochial of Aucklanders to want to keep their port.

The question is how to best serve the interests of the country as a whole, and of each of its relevant constituent parts. Because of that, the decision on the future of the port should not be an Auckland decision – nor one for a Northland politician, for that matter.

The process of deciding needs to be initiated by central government and it needs to be as free as possible from parochial politicians.

That’s why promising Winston the port is the hardest thing to do. To make such a promise, now, without doing the feasibility work, would be extremely reckless.

But while we wait to see if the negotiators of National and Labour, and of NZ First, have the skills to do a deal that isn’t reckless, here are some of the issues they need to wrestle with…

Peters at his Auckland waterfront rally. (Photo Simon Wilson)

The most important site is not even on the water

The most important site in this debate is not on the Waitematā or at Marsden Point. It’s not in the Firth of Thames or the Manukau, either. It’s in Wiri.

Wiri is the site of POAL’s vast inland port. It’s where much of what arrives at the Waitematā port gets taken for storage and distribution. (Auckland port is overwhelmingly an import centre. Our exports, mostly off the land, tend to leave from their closest port: Tauranga, Wellington, Lyttelton, Port Chalmers, Northport too).

Wiri is right by state highway one and the main trunk line and it’s close to the airport. With ready access to the Auckland market, to the rest of the golden triangle and to the rest of the country, it’s the one part of this equation that is sited exactly where it should be. That POAL facility, surrounded by the major depots of the freight companies, is the heart of New Zealand’s import trade.

So, wherever the port goes, it has to be easy to get goods from it to Wiri.

For a port on the Manukau harbour, that would be easy: it’s just a few kilometres of flat land away. If it moves to the Firth of Thames they will have to build a railway and highway through the Hunua Ranges. It’s not all that far – about 40km – but there would be a lot of tunnelling.

But to Northport? Even more tunnelling (none of the existing tunnels on the current route is large enough). The 165km distance is well outside what’s often quoted as a rule of thumb: don’t site your port more than 100km from the population it serves.

This is not about the port. It’s about the railways

Expanding Northport to become New Zealand’s major port would not be difficult, although there is work to do. Currently it’s a logging export operation and little more. The channels aren’t deep enough, there aren’t enough docks and there is no sophisticated port operation in place.

However, the land is flat and there’s a lot of it. It’s on the right (safer waterways) side of the island, and very accessible from Asia and Australia.

But the issue is, then what? Kiwirail says it would cost $200 million to establish a railway from Marsden Point to Whangarei, and $300 million to run that railway down to the northern boundary of Auckland. Those are the easy bits. It will then be necessary to run a new railway around Auckland and down to Wiri. That is expected to cost $2-3 billion.

When Winston Peters says the cars could be moved off Captain Cook Wharf within a couple of years, he’s right that Northport could accommodate them. But they’ll be stuck there until that railway is built.

It’s a massive operation, those cars. In the financial year just reported, POAL imported 297,383 cars and light vehicles. Northland has 3.6% of the New Zealand population, so let’s say 285,000 cars would have to come south each year. If they were all put on car transporters, which carry seven cars each, that would mean 111 articulated trucks on the road, both ways, every day of the year. One every 15 minutes, all day and all night.

And that’s before we start talking about container freight. The reality is that wherever the port is, from the start of its operation it will need extremely good rail service. Which has to be built.

Peters has disputed the rail cost figures, but I’ve challenged him on two occasions now to point to better data, and he has declined.

Winston Peters at the NZ First Party’s conference in July. (Photo Simon Wilson)

The business powerbrokers of Auckland will move mountains to stop this

The Chamber of Commerce, the Employers and Manufacturers Association, the importers, the exporters, the freight companies, POAL itself, the Auckland Council… almost no one speaking for the Auckland business community is going to sit back and let the port be taken from the city. Are they influential with the National Party? Yes they are. Are they influential with the Labour Party? Well, probably yes to that too.

Why does it mean so much to them? Because they live in a city state.

But this issue should be decided by the balance of the argument, not parochial interest.

The Auckland Council will not lose money if the port disappears

The council gets a dividend of $50-$60 million a year from POAL, which is a pathetic return on 55 hectares of the most valuable land in the country. Even after you carve out heaps of it for beaches, parkland and other public use, its earning potential is far higher.

To insist we need the port where it is for the revenue it brings to council, as some involved with council do, is almost fraudulently misleading.

The loss of jobs argument is nonsense

What happens to all the jobs if the port is shifted to Marsden Point? Well, they go to Marsden Point. Along with many other jobs on the freight and rail infrastructure. Northland desperately needs jobs.

It’s probably true that if a major new port opens up north in, say, five years’ time, it will be more technologically advanced than the current port in Auckland, and will therefore employ fewer people. But it’s also true that in five years’ time the Auckland port itself will be more technologically advanced. The location doesn’t really come into it.

MP Tracey Martin (centre) at the NZ First waterfront rally in Auckland, with her big-headed friend. (Photo Simon Wilson)

The port can’t stay where it is

Leaving the port on the Waitematā is not an option, as the working party by-and-large accepted. The freight demands alone will require it to shift: there’s a limit to how many trucks and how much rolling stock you can send down the motorway and along the railway through Auckland’s eastern suburbs.

The debate is not Marsden Point or the Waitematā. It’s Marsden Point or somewhere else.

Ngāti Whātua has something to say

Ngāti Whātua supports the Northport proposal. For cultural, environmental and economic reasons, it sees a better future for the Waitematā with the containers and the cars gone, and it believes Northport is a better option than the Firth of Thames or Manukau.

But what about the environment?

Siting a major port in the Firth of Thames or the Manukau raises environmental challenges. Just for starters, the Firth is an internationally significant bird breeding sanctuary. In fact, the research to date suggests the issues on both sites are not as problematic as one might think. But that’s not going to stop a major debate flaring up, and that’s reasonable. We need to take great care with decisions like this.

Northport may turn out to be the preferable option, environmentally, although it may not. Just one more reason it would be rash to promise Winston Peters his port regardless.

It’s easier for Labour

Agreeing to a plan to move the port, even to investigate moving it, will be easier for Labour than National. Labour has stronger policy commitments to regional development and is also committed to revitalising regional rail. National has roading projects but is not interested in regional rail.

To grow Northport there will need to be an upper North Island freight strategy, incorporating port, road and rail planning. Labour is already committed to creating that strategy. National believes competition among the ports serves the economy better and has refused to contemplate such a strategy.

NZ First’s Shane Jones having a quiet moment with the leader at the party conference in July. (Photo Simon Wilson)

This is really about the life and death of the city and the regions

Hands up if you think Auckland’s growth is outstripping the ability of its facilities, services and infrastructure to cope. That would be everybody, right? Hands up if you think it would be wrong to let Auckland prosper but the regions die. Still almost everybody? And if you think we should strengthen the economic viability of the regions, thus encouraging more people to live and work in them? That would help Auckland as well as the regions, wouldn’t it?

We already have a nationwide consensus on this: the government needs to find ways to make regional development make sense. And every one of those ways will involve saying to Auckland, yes, with this industry, this facility, this project, this piece of infrstructure, we know Auckland could handle it, but we’re going to give it to someone else instead. For the good of the country.

It will be in Auckland’s interest too. Because the pace of growth has nearly broken this city, and we can’t keep pretending it’s going to sort itself out.

But really, Northport?

Well, not necessarily. I’m not convinced Northport should be New Zealand’s major port. And nor am I convinced it should not. We don’t know enough to form a conclusion and we should be wary of those who think we do. The work needs to be done and we need a proper, informed debate about it.

In good faith, the new government should make that happen. @simonbwilson 

The Spinoff Auckland is sponsored by Heart of the City, the business association dedicated to the growth of downtown Auckland as a vibrant centre for entertainment, retail, hospitality and business.

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