Some water has passed under the bridge since the Auckland Council first considered the report at a meeting of its Regional Development and Operations Ctte on the 6th of December which I attended along with a number of others - including Alex Swney and Greg McKeown who made representations on behalf of Heart of the City. You can see the agenda item here.
You can also download the actual PWC report in chunks of about 8 meg apiece - parts 1, 2 and 3.
I hadn't read the PWC report before attending, but have since thoroughly digested its analysis of where we are today, and its Exec Summary of how to plan for next 30 years.
This posting contains my reflections under these headings: what the PWC report recommends in a nutshell; quoted extracts from the PWC report; what the mayor and councillors said at their meeting.....
What the PWC report recommends in a nutshell
This is the crucial finding in my opinion:PWC expect any requirements for future infrastructure development at Ports of Auckland to be "smaller in scale than the preferred reclamation options in the 2008 Port Development Plan."
So. This piece of advice calls for the Ports of Auckland expansion plans that caused such an uproar earlier this year to be shelved. It goes on to suggest ways and means whereby increases in demand can be met by incremental changes over the 30 year planning period, including increased efficiencies in the use of existing reclaimed land, and "the uptake of consented berth developments, reclamations, and channel and berth deepening...". (As I write down that quote I wonder whether the adjective "consented" applies to all of the nouns that follow it, or just the first....)
Extracts from the PWC report
These extracts from the PWC report provide an independent view of the state of Ports of Auckland vs Ports of Tauranga, and more importantly explain supply chain logistics and what motivates exporters or importers to chose POT over POA - even when they might be based in South Auckland. It also explains well the role of inland ports (like Wiri and Metroport).
Pg 44: Central government and councils have set strategies for driving economic development through export growth (see eg the Government's Business Griwth Agenda and the Auckland Plan). The analysis in this report does not reflect upon these policy objectives for four reasons:
1. our analysis is based on weight not value
2. we exclude all exports through airports, which accounted for 17% of export value in 2012
3. we consider merchandise trade only and exclude service exports, which accounted for 21% of exports in 2011 according to World Bank statistics
4. we expect the relationship between trade weights and trade values to change over time, as trade in high-value/low weight products is likely to grow.
Pg 72: New Zealand ports, including the UNI ports, are not at the forefront of technology or efficiency.... this suggests that the UNI ports have scope to manage demand growth by increasing efficiency rather than increasing in size or undertaking expensive infrastructure upgrades... There are a number of areas where significant investments can be made. They include upgrading harbours and berths to accommodate larger ships, deploying automated container stacking... and developing inland ports to allow cargo to be consolidated and cleared through customs at a cheaper location....
Pg 72: Ports of Tauranga performs better on most measures of port efficiency and productivity than Ports of Auckland. For example its crane rates are comparable with all but the most efficient international ports, while Ports of Auckland's performance is significantly lower...
Pg 72: Another common, more comparable measure of container port efficiency is the crane rate, or number of containers moved per crane per hour... this indicates that POT is the only New Zealand port in the upper tier of efficiency, while POA is below the NZ average...
Pg 74: Ports of Tauranga remains New Zealand's best performing port on most measures.
Pg 75: In many cases, it is cheaper to move freight between Auckland and Southeast Asia than it is to move it between locations within New Zealand...
Pg 76: These calculations suggest that for many imports and exports, a large share of total supply chain costs are incurred within New Zealand rather than for sea freight...
Pg 77: ...because domestic freight costs are large relative to sea freight costs, changes to the NZ port sector that require increased domestic cargo movements may have a large impact on importers and exporters from more distant region.... transport costs from Whangerei to Auckland and other UIN locations are likely to make it uneconomic to develop Northport to handle containerised cargo unless significant investments were made in land transport infrastructure and inland ports.... one important caveat to this analysis is that consolidating freight volumes on rail may increase cost-effectiveness of moving freight domestically. Rail provides increasing returns to scale for large volumes of freight. For example (an expert) estimated that two-way container traffic of 35,000 TEUs per year would reduce per -container rail costs by almost 70% relative to the prices for a single container. Consequently, inland ports or other means of consolidating freight from high volume shippers may reduce the costs to distance significantly. This is apparent in the case of Metroport, which,.... has enabled Ports of Tauranga to compete for freight in the Auckland region.
Pg 79: ...inland ports can lower costs for importers and exporters by exploiting the cost efficiencies available when moving large volumes of containers by rail. The basic idea is to allow importers and exporters to avoid the costs of road freight (and, in particular, congestion in Auckland's road network) by consolidating freight at a closer location and moving it by rail to a port.... Ports of Tauranga developed Metroport in order to enable it to compete for a share of Auckland's international trade. As a result, POT has become a viable substitute for POA for many categories of cargo.... the development of Metroport in Auckland has made it easier for South Auckland manufacturers to export through Tauranga...
Pg 80: Metroport's annual throughput increased from 32,000 TEUs in its first year of operation to 138,000 TEUs in the year ending June 2011. This represents 55% capacity utilisation. 23% of POT's container throughput is currently routed through Metroport.... Wiri Inland Port is located 25 kms from POA, reportedly within a 10 km radius of the origin or destination of 70% of POA's container trade.... In the year ended 2010, Wiri handled 30,000 TEU, or 20% of its capacity. Only 3% of POA's total container throughput was routed through Wiri....
Pg 81: Inland ports... do have some public policy implications for land use and infrastructure planning. If inland ports provide a commercially viable proposition to shippers - ie they reduce supply chain costs by consolidating sufficient volumes of freight and moving it to and from a seaport by rail - they may have an impact on land uses in the surrounding area. For example, they may strengthen incentives for production or distribution facilities to locate close to the inland port.
What the mayor and councillors said
I won't report much of this here. A few Councillors had given the PWC report more than a skim. Council Economic Development staff - who wrote the accompanying report - tried to rescue something positive from the PWC report that supported their determination to hang on to the old POA reclamation plans. Come hell or high water. But it is hard to avoid PWC's statement that whatever happened at POA it should be: "smaller in scale than the preferred reclamation options in the 2008 Port Development Plan."
Interestingly, Mayor Len Brown fronted the debate. As usual he was feisty and in campaign mode. I took a few notes and bullit point them here:
- part of national framework
- will be here forever
- about competitiveness
- desire for economic outreach to near neighbours
- UNISA is about collaboration, mutual benefit, for economic reasons
- the debate in March was largely uninformed and emotional
- I didn't take part in it. I didn't like it.
- Was media led. We need an analytical platform.
- This report is a starting point. It is practical. Some say it is not bold enough. It is a good template.
- Port is necessary. So is Ports of Tauranga. So is Northport.
- We can't move it. Needs some common sense. Was never going to be all the way to Devonport.
- Clear pathway for discussion with POAL Board.
- Better discussion with POT and Northport and Government
- As we reflect on being competitive with rest of the world.
When I reflected on what the Mayor said, actually said, I couldn't think of a single fact or idea that was in the PWC report. After the PWC people summarised their report - under watchful eye of Council officers - there was a good question and answer session. Cllrs Coney and Lee - being ex-ARC - had a strong grounding already, and their questions and comments reflected that. Cllr George Wood was the most impressive of the rest. He had actually read the report and asked probing questions about Wiri - why was it so under-utilised.
However the guts of the discussion was what to do for/about the port reclamation plans in the Unitary Plan. The focus was the Unitary Plan. Not the Port.
Cllr Hulse asked, "what are you suggesting goes into the Unitary Plan?"
Officer Harvey Brookes replied, "we haven't done the work. Up to now its been handled as "discretionary" activity. A resource consent is all that's required. Could be almost prohibited. Or could be permissable...."
The upshot appeared to be not to make any decision at this meeting about that.
Leave it under review. Leave it for another day....