Ratepayers should be alarmed at ARC ports bid
Media statement Thursday, May 5th, 2005
Ratepayers should be highly alarmed at ARC ports bid
The Employers & Manufacturers Association (Northern) says the Auckland Regional Council bid for all the Ports of Auckland shares (via ARH):
· ignores the need for public consultation,
· is unnecessary for planning purposes, and
· represents an extremely poor use of public funds.
“The logic of the 100 per cent ARC ownership of the Port demands full public explanation,” said EMA’s chief executive Alasdair Thompson.
“The ARC is buying the 20 per cent shares it doesn’t already own without consulting its ratepayer constituents.
“If not illegal under the provisions of the Local Government Act 2003, it shows a remarkable contempt for ratepayers.
“We cannot understand how the council can make such a bid without giving an indication of the intention in its Long Term Council Community Plan, or Annual Plan.
“The purchase also makes no sense in terms of addressing Auckland’s desperate need of more infrastructure development, including public transport.
“It was never intended that Infrastructure Auckland money be used for this.
“The 80 per cent stake ARC has in the port is part of the former ‘Infrastructure Auckland’ fund set up by government to fund the provision of Auckland infrastructure, mainly land transport and storm water.
“We are at a loss to understand what the Council gains from buying these shares that it does not already have.
“Every financial analyst’s view we have seen says the ARC/ARH for 100% of the Ports of Auckland represents an extremely poor use of public funds.
“Whether 80 per cent or 100 per cent owners of the port, the ARC cannot interfere in the company’s commercial decisions, including what property the port holds or sells.
“Besides, since local authorities control the RMA consent processes, the ARC doesn’t need to own 100 per cent of the port.
“The benefits to Auckland of investing in infrastructure far and away exceed the 4.25% net dividend yield from owning the extra port shares. The Allen Report shows examples of this. For example the completion of the Avondale extension of SH20 to the North Western motorway shows a return of $4.60 for every dollar invested, or 460%!
“If the ARC’s holding company intends to convert some parts of the wharf area to other uses it should seek to buy that area from the port, not buy more shares.
“Buying the shares to control port assets in this manner is ethically dubious.
“We have asked the government to investigate the legality and the propriety of the ARC’s actions.”