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Merger of Ports of Auckland, Tauranga logical

Wednesday, October 11th, 2006

Merger of Ports of Auckland, Tauranga logical

A merger of the ports of Auckland and Tauranga has the potential to reduce port costs while remaining independent from the dominant international port and shipping companies, the Employers & Manufacturers Association (Northern) says.

"Though Auckland and Tauranga have respectively the largest bulk and container ports in New Zealand, both are small by international standards, so the proposal makes sense," said Alasdair Thompson, EMA's chief executive.

"However, port customers ought to be allowed to share in the development and investment savings that should flow from the merger, and from the port monopoly it would create in the top half of the North Island.

"The regulatory framework to ensure this can take place will be challenging, but is imperative for the protection of port customers.

"While the issue of competition is important, most port customers realise the dominant shipping companies are currently capturing substantial benefits at present by playing the two ports off against each other.

"New Zealand arguably needs one port of international scale as ship sizes continue to increase; otherwise the risk is our containers will be shipped via Australia at some future point.

"The merger would also allow Auckland and Bay of Plenty regional councils to rationalise their dominant ownership of both ports. For example, they could retain ownership of surplus port land for redevelopment, such as the Tank Farm, and of operating port land, but publicly float the combined port company allowing a solid investment opportunity for New Zealanders savings while freeing up ratepayers' capital for investment in other infrastructure."

ENDS

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