The
suggestion by Napier MP Stuart Nash that Hawke’s Bay must retain
ownership of the Port of Napier may appealing but is not necessarily
the best way forward.
In
recent years two of this countries ports have been badly damaged by
earthquakes. Cruise ships are still bypassing the Port of Lyttelton
seven years after the 2010 Christchurch earthquake whilst container
and other cargoes destined for Wellington are being diverted to ports
including Napier as a result of damage following the Kaikoura
earthquake last year.
Hawkes
Bay is not immune from tectonic upheavals as we all know and
therefore there is always the possibility of our own port being
similarly affected.
The
Port of Napier needs a significant injection of new funds to finance
the expansion of facilities to provide for the expected growth in
export volumes. The financing options include increased borrowing or
attracting additional local or outside equity. Whilst borrowing the
funds means the Regional Council retains ownership it also continues
to carry the full risk of both natural catastrophes or manmade
disasters including economic downturns and unfavourable commercial
events such as shipping companies deciding to consolidate their
operations elsewhere.
These
risks which will be borne by the people of Hawke’s Bay can be
reduced with a some external shareholding. External equity might also
bring in additional expertise to improve port operations. The Port of
Tauranga is a publicly listed company and it seems to have done them
no damage. What ever we decide we must avoid creating an opportunity
for another port to take control so as to concentrate trade elsewhere
at our expense.
Of
course allowing some outside shareholding must not result loss of
control. The port is much more than a few million dollars a year to
help keep regional council rates down. It is our gateway to the world
for a whole range of horticultural, viticultural, agricultural and
wood products.
The
additional cost if shippers had to truck their products through
another port such Tauranga is estimated to be around $1600 per
container. For a container load of apples worth say $US6500 this
extra cost could seriously affect the viability of horticulture.
Additionally there would be a significant increase in the risk of
damage to the cargo. When multiplied by the 22 000 containers of
apples we currently export the additional cost of shipping to another
port could cost us many tens of millions of dollars. If we add half a
million tones of pulp, over a million tons of logs and as many
containers again of meat and other products, the true value of our
port becomes apparent.
So
whilst the profit the port makes is useful, the true value of our
port is the contribution it makes keeping exporters and importers
cost effective and competitive.
We
can go further and ask ourselves whether Heinz Watties could remain
here without the ability to directly import tinplate and other
materials needed for their manufacturing, then export high volume
relatively low value food products to markets around the world.
Even
the $20 million estimated spend by cruise ship passengers is totally
dependant on the port, plus the port is a major local employer of
highly skilled well paid workers.
We
might even better secure the present income stream the port provides
by reinvesting some of the capital now locked up in the business
though I too share Stuarts concern over past decisions made by the
Regional Council.
For
now we have all our eggs in one basket and that can be a risky as
both Lyttelton and Wellington have discovered. We must consider our
own vulnerability when deciding how to move forward but what ever we
decide we must do what is best for Hawke’s Bay and not allow
ideology to steer us in a direction that impedes the Ports ability to
provide the links that are essential for our prosperity.
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