Auckland Mayor Wayne Brown has ‘lost confidence’ in Ports of Auckland board and plans changes

Auckland Mayor Wayne Brown says he has lost confidence in the board of Ports of Auckland – and is working on replacing it.

Brown has been critical and has called for heads to roll on
other council-controlled boards, but this is the first time he has publicly said he has “lost confidence” in a board.

Brown made his comments about the board of Ports of Auckland in a live question and answer session with Herald premium subscribers this morning.

Asked why he was not seeking Ports of Auckland to pay rent for the space it uses, Brown said: “I have made no such decision. I am currently working on replacing the board, in which I have lost confidence, with people who accept much higher returns are required from port operations than any that are forecast.

“We also need a clear plan and timeline to progressively cease car and container port operations at the CBD, starting soon, so that the private and public sectors have the certainty they need to invest in new transport and other infrastructure accordingly.”

His statement ups the ante with board chairwoman Jan Dawson, who in the past week has had a public spat with Brown over how much the company will pay its council owner next year.

Dawson took issue with an allegation by Brown that the port is being tardy in responding to his drive for council savings.

The Herald is seeking comment from Dawson.

In a media statement last Thursday on a $270 million hole in the council budget, Brown said the council had yet to hear from the port company about what savings, efficiencies and revenue enhancements it has planned to deliver a “significant cash dividend” of at least $30m.

In response the following day, Dawson said the board was “surprised by your statement as we have been taking a number of actions to assist with the management of the budget deficit”.

“We have been working closely with council staff over the past couple of weeks on a number of cost-saving opportunities around debt funding and insurance premiums. This work is well progressed and the initiatives will take effect this year,” Dawson said in the letter to Brown.

After making repeated assurances during the campaign that he would get the port company to deliver $200m in rates and $200m in dividends, Brown pulled back this month, saying he would get $400m from the land the company uses – but that wouldn’t be achievable via port operations.

“There is no scenario under which the port will deliver an economic return to the people of Auckland, even if it manages to resume dividends in the future,” he said.

“No matter how much POAL operations improve, it is never going to pay for where it is, and even the promised but yet-to-be-achieved financial returns would represent a woeful economic return on Aucklanders’ assets.”

Brown has given the port company until the end of March to come up with a plan and timetable to move its operations from the Ferry terminal to Bledisloe Wharf for an area to be enjoyed by Aucklanders.

Ports of Auckland has been under fire in recent years for a grim health and safety record, poor productivity, weak returns to the city’s ratepayers, and a costly and fruitless effort to implement an automation project with an associated write-off of $65m.

The board and executive leadership at Ports of Auckland have already had a big shake-up with former chief executive Tony Gibson and board chairman Bill Osborne quitting last year following a damning review that found systemic problems with health and safety.

Brown has the ability to replace board members through the performance and appointments committee on which he sits with a majority of like-minded councillors. Former Mayor Phil Goff used the same set-up during his six years in office to replace board members.

In another question from a Herald subscriber about Government plans for light rail in Auckland, Brown repeated his opposition to the $14 billion project.

“It is a project that has been imposed on Auckland by central government, with no clear business case. It would prevent Aucklanders from getting the maximum benefit from the multi-billion dollar City Rail Link project,” Brown said.