Local Govt | National News Video | Parliament Headlines | Politics Headlines | Search

 

Greater returns from investments, achievable and essential


Media Statement

Greater returns from investments, achievable and essential: Auckland Council Investments


Following up on comments regarding the forecast rate of return on equity of ACIL owned Ports of Auckland, ACIL Chief Executive Gary Swift today said that the anticipated rate of return of 12% was realistic.

“ACIL has an obligation under the establishing legislation to bring a strong commercial focus to the business, and POAL has an obligation under the Port Companies Act to be a successful business,” he said.

“Suggestions that the shareholder and the Auckland Council should accept a lower return on an asset as large as the port, is business nonsense. We need to provide a good return to the Council to help fund essential infrastructure in Auckland. To do anything less, results in ratepayers subsidising the activities of POAL”.

Mr Swift confirmed that a benchmarking report showing a comparative analysis of returns by similar companies operating in different countries indicated that the current rate of return on equity by the Port was not satisfactory. The return on equity by other ports averaged 13.6% and the range was between 5.4% and 22.2%. “However different companies and countries have different accounting policies, structures and operating models, which makes benchmarking difficult,” Mr Swift cautioned.

“The results of the POAL Board developing a long term strategy to achieve an improved rate of return showed that a return on equity of 12% was realistic and achievable by 30 June 2016. This is the minimum return the shareholder expects,” he said.

“To achieve this return, the company undertook an in-depth review of its structure and business, of which labour productivity is but one aspect. An increase in labour productivity is equivalent to a 20% increase in the availability of berth space and defers the future need for the port to expand. Changes are being made across the organisation to implement the other strategies.”

Mr Swift said that comments made about these strategies being designed to privatise the port are incorrect. “There are no plans to privatise the port,” he said.

ENDS


Background: Auckland Council Investments Limited is a Council controlled organisation, owned by Auckland Council. ACIL owns the shares in Ports of Auckland Limited, Auckland Film Studios Limited and 22.4% of the shares in Auckland International Airport Limited.

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Environment Commission: Time For Historic Step For Climate Change

Dr Wright has recommended a new Act that is similar to the UK Climate Change Act...

A similar law in New Zealand would put emissions targets into law, and require the setting of carbon budgets that would act as stepping stones towards the targets. It would also establish a high-powered independent expert group that would crunch the numbers and provide objective advice. More>>

 

Gordon Campbell: On Act, The Centre-Right’s Perennial Ugly Duckling

Act endures, despite its thoroughly fossilized views: it is the only lighthouse still shining the beams of 1980s market fundamentalism out into the electoral darkness. More>>

ALSO:

Immigration: Changes To Temporary Work Visas Confirmed

“The consultation process resulted in around 170 submissions and today’s announcement shows the Government has listened to the feedback raised by employers and industry, particularly in the regions,” Mr Woodhouse says. More>>

ALSO:

Rental WOF Passes 2nd Reading: Little Bill Goes A Long Way

The strong call from the public for warm, dry, healthy rentals has helped the Healthy Homes Guarantee Bill to pass its second reading, says Leader of the Opposition Andrew Little. More>>

ALSO:

Incomes & Housing Costs: No Signs Of Real Improvement For Poorest Families

CPAG: The latest Household Incomes Survey report shows that not everyone is better off, despite that income poverty seems to have lessened since the Global Financial Crisis in 2008. More>>

ALSO:

Turei To Be Interviewed By MSD: Gordon Campbell On The Real Truth Deficit In Welfare

It has been astonishing to see the amount of time and energy being spent on what Greens co-leader Metiria Turei did or didn’t do properly as a beneficiary back in the early 1990s – as compared to how little time and energy is being put into the point of her personal example. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election