Port of Auckland future: Mayor Wayne Brown bins long-term lease, goes with $1.1 billion plan with management, unions

Auckland Mayor Wayne Brown has binned plans for a long-term lease for Port of Auckland after brokering a $1.1 billion deal with port bosses and the Maritime Union to maintain the status quo.

Brown today backed away from the lease he championed after failing to get sufficient support around the council table for a 35-year lease to a global port operator.

The mayor had said sticking with the status quo carried costly risks for ratepayers.

This morning Brown announced the new plan will see Port of Auckland contribute $1.1b in profits to its council owner over the next 10 years, exceeding the returns from investing the projected $172 million proceeds from a port lease.

The plan was signed by Brown, Port of Auckland board chairwoman Jan Dawson and Maritime Union general secretary Grant Williams.

The plan is expected to be formalized next week by councilors and Port of Auckland in their annual statement of corporate intent.

“By trade, I’m an engineer. I solve problems. We looked at a couple of options to improve returns and this is the best solution,” said Brown.

“This plan reflects my commitment to obtain better value and better returns from our strategic assets, and strengthen the council’s long-term financial position. These higher returns will require increased port charges and improvements in productivity, and all parties are supportive of this.”

Dawson said: “The port company welcomes the mayor’s plan, as it provides a clear direction and certainty for the port staff, our customers and the community. “We are pleased to enter into a tripartite arrangement with our owner and our unions, as together, we will continue to deliver for the people of Auckland.”

The new plan is based on a tripartite relationship agreement between Auckland Council, Port of Auckland, and the unions, represented by the Maritime Union of New Zealand, and provides a foundation for good faith, co-operation, and long-term strategic alignment.

It provides for Captain Cook Wharf and Marsden Wharf, nearest the city end of the port, being released for public use within two to five years, and public access being gained to parts of Bledisloe Wharf. The port company also plans to raise container costs from $95 to more than $200 over the next few years.

Brown’s response to higher charges for businesses to land goods in Auckland was: “Another $100 on a container with $20,000 of stuff on board is bugger all.”

Williams said the union was worried about the port lease, but really happy with the tripartite agreement and what it means for workers and keeping the port for the benefit of Aucklanders.

Until today, Brown has been promoting the port lease as a cornerstone for a $3b to $4b regional wealth fund to secure the council’s financial position and respond to natural disasters, like last year’s storms.

The Auckland Future Fund, as it is called, had been proposed in the council’s Long-Term Plan (LTP) to be made up of the lease on the port land and selling most, if not all, of the council’s remaining airport shares, worth about $1b.

Brown had previously said the fund was a smart way of diversifying its assets and not being over-exposed when “the manure hits the fan,” as happened when the airport flooded during last year’s weather events and with the port being the city’s number one tsunami risk.

Brown envisaged the Auckland Future Fund would go ahead with the airport shares but not the dividends from the port company.

Submissions on the LTP found slightly more people and organizations favored maintaining the status quo at Port of Auckland.

The lease was also opposed by Stop Stealing Our Harbour, a lobby group comprising prominent figures including Lady Pippa Blake, Sir Stephen Tindall, Sir Ralph Norris, Green Party co-leader Chlöe Swarbrick, former National Party deputy leader Nikki Kaye and celebrated writer CK Stead .

Last month, the group signed an open letter to the council saying a 35-year lease would continue the industrialization of Auckland’s waterfront for nearly four decades.

Economist Craig Renney also raised sticking with the status quo in a council-commissioned report seeking independent advice on the Auckland Future Fund.

Renney did, however, say the status quo should not be considered a risk-free approach, citing the sharp fall in profitability at the port from the impact of Covid-19.

Diversifying away from the port and airport shares would reduce the risk from things such as significant weather events, he said.