The country needs a national ports strategy to co-ordinate development of infrastructure and stop wasteful investment, according to the head of the Port of Napier.
Port of Napier Photo: 123rf
Chief executive Todd Dawson singled out CentrePort's just released discussion document, with a suggestion it should substantially expand its container facilities in Wellington, as highlighting potential wasted investment, which could destroy more value than it creates.
He said the congestion at the Ports of Auckland highlights the need for a national ports strategy to avoid duplication that neither serves exporters, shareholders and ratepayers.
"Right now we're not doing the best job to move freight cost effectively and efficiently across the country, we're distorting the market and this is proving a drag on the whole of the economy."
Dawson said local bodies, which own and operate most of the country's ports, were acting as if they were running fiefdoms with ambitions of growth and development of facilities which could be justified given the regions they rely on.
"It's time for shareholders to hold some of the port management to account for their strategies and investments and financial performance."
Dawson said proposals that Wellington's CentrePort should invest in expanding its container operation, which was badly damaged during the Kaikoura earthquake in 2016, would not stack up and end up destroying value.
He said it would cost the best part of $200 million to expand the container operation, which has always been small scale and needed subsidies to attract ships and cargo volumes.
"It has the potential to destroy up to a further $150m in shareholder value over the next decade."
Dawson conceded his criticism of CentrePort's plans may be seen as protecting his own company and stifling potential competition for cargo volumes.
However, he said 80 percent of Napier's cargo volumes came from within 100 kilometres of the port and it had all the necessary road and rail links to service the central and southern parts of the North Island.
He said most ports had natural cargo custom such as logs, dairying, or horticulture.
Napier Port listed on the stock exchange in 2019 and is currently building a new wharf to handle more container traffic, as well as developing an inland freight hub between Napier and Hastings.
