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Ports of Auckland takeover: Auckland Mayor Wayne Brown tells foreign port company business is not for sale

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Ports of Auckland has been under a dark cloud. Photo / Michael Craig

Auckland Mayor Wayne Brown has advised foreign port operators and their investment partners not to waste their investors’ funds on proposals to take control of Auckland’s waterfront port land, either by purchase or long-term lease.

Brown was responding to a story in today’s Herald that Dubai-based DP World and Montréal-based CDPQ were looking at a possible takeover of Auckland’s ailing port company.

One source said senior executives from DP World could be in Auckland as early as next week for talks on securing a lease to run Ports of Auckland.

Auckland Mayor Wayne Brown. Photo / Michael Craig
Auckland Mayor Wayne Brown. Photo / Michael Craig

This would be under the operator company/property company – “opco/propco” – model that would see ratepayers continue to own the CBD-based port land and DP World secure a long-term lease to run the port business.

Brown said there are no circumstances in which the Auckland Council governing body would ever agree to sell the port land or enter into a lease agreement that would lock it into used-car and container port operations for decades.

“It is well known I am utterly opposed as mayor,” he said.

A majority of the 20 Auckland councillors are also opposed to the sale of the port.

“My mandate from Aucklanders is to retain the port land in public ownership in perpetuity and return it to mixed-use for the people of Auckland as soon as practical, while maintaining cruise-ship and coastal shipping services in the city.

“This would take time and there would need to be a just transition for every port worker that might be affected, but we need to get on with it.

“I have had very constructive discussions on the future of the port land with incoming councillors, Prime Minister Jacinda Ardern, Local Government Nanaia Mahuta and Auckland Central MP Chlöe Swarbrick and expect to report progress in the coming months,” said Brown.

Last week, Brown set out his short- and medium-term expectations for Ports of Auckland in a letter to board chairwoman Jan Dawson.

Brown wrote: “I am not interested in any arrangement involving a long-term lease, which would lock the port into its current footprint for decades.”

Ports of Auckland has failed to implement an automation project. Photo / Michael Craig
Ports of Auckland has failed to implement an automation project. Photo / Michael Craig

Brown’s expectations included the port ceasing used-car import operations on Bledisloe Wharf as soon as possible and moving as quickly as possible to a 100 per cent rail solution for containers to reduce congestion and lower carbon emissions.

He asked the port to work over the next five months with mana whenua Ngāti Whātua Orakei and other stakeholders, including business and community groups, on a plan and timeline to develop the area from the Ferry Building to Bledisloe Wharf into an area that can be enjoyed by all Aucklanders, with better access to the harbour including a view-shaft to the sea.

Before commenting further, Brown said he is seeking advice from council chief executive Jim Stabback on what, if anything, council officers, former mayor Phil Goff and members of the former Governing Body knew about DP World and CDPQ’s aspirations to take control of Auckland’s waterfront land.

Last night, Stabback and chief finance officer Peter Gudsell refused to say if they had talked with anyone at DP World or knew about talks between staff and the port operator.

Council procurement general manager Jazz Singh said the council is aware of DP World and frequently gets approached by entities about buying or taking an interest in council assets.

“This includes recent interest in and speculation on the council’s shareholder relationship with Ports of Auckland.

“On these occasions we follow due process which typically comes with obligations of confidentiality, which we must honour,” said Singh.

The Maritime Union is concerned about “rumours of privatisation” at the Ports of Auckland with national secretary Craig Harrison saying there is no need for discussions, as the Ports have a great future as a public asset.

He said after a decade of mismanagement, the Ports are now back on track to deliver to the people of Auckland.

“The previous problems of the Ports were not caused by public ownership, but by lack of oversight by the owner and board of the previous management and their bad decisions.”

Harrison said it is not clear under whose authority council staff are engaging with DP World.

Wayne Brown is seeking answers from council chief executive Jim Stabback about the DP World bid. Photo / Michael Craig
Wayne Brown is seeking answers from council chief executive Jim Stabback about the DP World bid. Photo / Michael Craig

The union is one of many stakeholders discussing the role of the Ports with the new mayor, he said.

“There is already a constructive discussion about the best way forward for the Ports, and to have these extra distractions flying around is not helpful.”

A source said meetings have been scheduled next week in Auckland for senior executives from DP World, including Asia Pacific & Australasia CEO and managing director Glen Hilton, his business development manager Sean Barrett and senior Vice President for finance and business development Anil Mohta.

The source said the executives plan to meet with the NZ Super Fund, Ports of Auckland, and officers at Auckland Council, which owns the port company and its CBD-based waterfront land.

DP World is a global port operator based in Dubai with more than 70 marine and inland terminals in 40 countries, including four container terminals in Australia.

CDPQ is a Quebec-based pension fund, with funds of about $390 billion worldwide, that made an unsolicited bid through its infrastructure arm with the NZ Super Fund in 2018 to build light rail in Auckland.

Ports of Auckland has had a grim health and safety record. Photo / Dean Purcell
Ports of Auckland has had a grim health and safety record. Photo / Dean Purcell

Ports of Auckland has been under fire in recent years for a grim health and safety record, poor productivity, weak returns to the city’s ratepayers, and a costly and fruitless effort to implement an automation project with an associated write-off of $65 million.

Former chief executive Tony Gibson and board chairman Bill Osborne quit last year following a damning review that found systemic problems with health and safety.

A Super Fund spokesman said he could not comment on DP World’s and CDPQ’s travel plans and was unaware of any meetings planned with anyone from the fund.

A spokeswoman for Ports of Auckland said the company is unaware of anything involving DP World.

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