Can candidates for the Auckland mayoralty next year find a way to move the Ports of Auckland? If so, where to and at what cost?

On a recent Sunday I was at dinner in the restaurant in the old Seafarers' building on Quay St, Auckland. Through big picture windows we looked out over the Waitemata harbour on a beautiful spring day. We could see the boats on the water, the houses sprinkled around the North Shore... but the entire foreground was dominated by hundreds of cars parked on Marsden Wharf, flanked by massive container cranes.

What a waste of one of the great harbours of the world.

In less than 12 month, we will be choosing a new Auckland Council and Mayor. What vision of the city will the candidates have? Or will the whole campaign revolve around rates, debt and the numbers of council staff?

Let’s hope not. I am sure that there must be many like me who want to hear about a broader vision for Auckland. Are we prepared to do the things that will indisputably make Auckland the region's third city after Sydney and Melbourne?

To attract world class events, to be the home of world class companies, to ensure that we are among the most attractive cities in the world. At the moment we barely cut the mustard on any one of these criteria, certainly not compared to the possibilities for our city. What happened to our ambition to host Formula One? Where is our world class stadium? What happened to the second runway?

And what about our waterfront?

At the moment the entrance to our harbour is a massive container terminal, hardly what one expects of a world class city. Other cities including Sydney, London, and San Francisco have all shifted their major container port activity out of the city centre. Such a shift will still mean that cruise ships will continue to use the downtown terminals. And it will be easier to expand the ferry terminal. It is already reaching capacity at peak times.

We could do the same as these other cities, and we don’t need to wait 30 years to do so. It could be done in the next five to ten years, provided the city leaders had the ambition and gumption to do so.

There are 61 hectares in the Bledisloe Fergusson port precinct. It has a 2014 valuation of $365 million, which is $6 million per hectare. There are market valuations closer to $1.5 billion, based on the uses that the land could be put to as the prime entrance to the city.

Imagine a waterfront with some spectacular commercial buildings, a stadium located at the back of the precinct to tie in with the Vector Arena, and some of the most desirable residential real estate in New Zealand. And perhaps something unique to showcase Auckland right at the entrance to Waitemata harbour.

Of course a new container terminal will be required, and they don’t come cheap; maybe $4-5 billion.

Both Tauranga and Marsden Port are too far away. A sea city like Auckland, growing to as many as 3 million people by 2050, needs its own port. There are realistic alternatives. Manukau Harbour, if the issues of the bar can be dealt with, or the Firth of Thames perhaps near Orere Point are options. There has to be enough land for expansion, and motorway and rail connections are required.

How do we pay the $5 billion that will be required? Well, nearly 30% would come from the sale of land at the existing container terminal. No doubt quite a lot of the existing infrastructure, cranes, etc. can be disassembled and shifted.

Does the City Council have to stump up with the additional $3 billion? The answer is no.

Just as other New Zealand ports have private capital, so can the new Port of Auckland. Some of the capital can be raised locally, there could an international shareholder with expertise in ports, and some of the funds can be borrowed.

What is required is political will. This need not be something that is deferred to our children. The next political leaders in Auckland can make this decision. We will find out whether they are up to it over the next few months.

Comments (9)

by Rich on October 28, 2015
Rich

Alternatively, why not build a new CBD somewhere that it isn't fronting the wharfs and has a nice view over the ocean: Devonport, Mangere or Waiheke maybe?

Sydney, London, and San Francisco didn't shift their ports because they were an ugly blight on a city whose economy was now based on property inflation, incidentally. They shifted them because the waters were to shallow and confined for larger ships and/or there was no room onshore to move and store containers.

It seems silly to spend 5 billion on a new container port just to make room for more waterfront cafes. And interesting what this says about modern capitalism - it requires the government to mandate and underwrite an enormous chunk of public spending in order to facilitate private profit.

 

by Tom Semmens on October 28, 2015
Tom Semmens

"... and some of the most desirable residential real estate in New Zealand...."

Spoken like a true Tory! How about we just put back a nice beach and a reserve down the bottom of Queen street for everyone to enjoy? What other city could then boast a main street that terminated at a glorious stretch of tree shaded grass and a 2km long beach of golden sand?

by Alan Johnstone on October 28, 2015
Alan Johnstone

Fine in theory, not one of the top ten things needed in Auckland though.

Way down the list behind productive infrastructure like the City Rail Loop

by DeepRed on October 28, 2015
DeepRed

Son of Think Big, much?

by Wayne Mapp on October 29, 2015
Wayne Mapp

Tom,

The project has to be economic, or else it won't work. While I am sure that there would be a public reserve, the precinct is large enough for a wide range of commercial activity. New Zealand could readily host the RWC in 2027 or 2030. A new global class stadium could be built on the precinct back near the road. It would tie in with the Vector arena.

Alan,

This is not in competition to the City rail loop. But it would be much more trans-formative. In fact it will be much easier to fund than the City rail loop, with land sales and new capital in the new container port.

A major public building literally at the entrance to the harbour would be much more dramatic than it would be if located at Wynard Point.

So it is not an "either or."

If Sydney, London and San Francisco can all establish their container ports away from the CBD, why can't Auckland?

by Rich on October 29, 2015
Rich

Wayne: if it's such a good idea, why don't you get some of your mates together, raise $5billion and do the deal? Why do you need to bludge a subsidy from the taxpayer.

by Wayne Mapp on October 29, 2015
Wayne Mapp

Rich,

I am not asking for a taxpayer subsidy. Only the City Council as owner of POA can make the decision to shift. hence my appeal to candidates.

Land sales of the existing port precinct would pay for at least one third of the cost, maybe a lot more. The balance would come from private equity and a prudent level of borrowing.

Would it actually cost $4 billion? It seems a very large sum for what is essentially dredging, hardstand formation and container handling. Presumably all the existing gear can be re-located. However, I am simply repeating cost estimates that are in the public domain. As part of the port study that is currently being done, some proper costing of a new container terminal should be done.

 

by Rich on October 29, 2015
Rich

<q>The balance would come from private equity and a prudent level of borrowing.</q>

Where would the money to repay this and the associated dividends/interest come from? The port would have an extra amount of capital to service, say around $3bln after the sale of the city centre land. Presumably their customers wouldn't pay extra to have their freight go through the new port - given they could always use Tauranga (how much difference does a 3 hour truck trip at the end of a 3 week sea voyage make anyway?) 

 

 

by Tom Semmens on October 30, 2015
Tom Semmens

"...The project has to be economic, or else it won't work. .."

What's the point of changing the ownership if it just goes from being owned by a company to being owned by a collection of the one percenters who can afford the astronomical prices that will be charged? Net gain for the 99% of the population: Zero. Restoring the downtown foreshore would have a net benefit for everyone, so spend government money to get it. Your right wing obsession with the idea that a beach and reserve is somehow a waste of valuable land exposes your elitist and classist 19th century world view of the place of people and of nature.

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