Auckland Port move: Import costs would rise by up to $600m says new study
Wednesday, 4 December 2019
The latest volley over a proposal to move Auckland's port to Northland says the cost of imports could rise by more than $600 million a year.
The Ports of Auckland-commissioned report said the city's economy would also have been $158m a year smaller over the past five years without the downtown port.
The release of the report is part of a flurry of arguments as a cabinet committee meets on Wednesday to consider the report of a working group which has recommended closing Auckland's port and expanding Northport, south of Whangarei.
Proponents of the relocation have published an open letter to the Prime Minister, urging cabinet to press on with the policy advocated by New Zealand First.
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The 31-page report by consultants NZIER argued the value of Auckland having a port in its current location. While first released by the port's owner Auckland Council last week, it was circulated directly by the company on Wednesday.
The report said part of the port's value was the $58m it pays annually to it staff.
Seventy per cent of Auckland's imported goods arrive across the city's wharves, and NZIER said that proximity reduced costs.
'If the imported goods were transported by rail from either Northport or Tauranga back to Auckland, national GDP would fall by approximately $1.3 billion. Auckland region's GDP would fall by approximately $1.1b,' it said.
The working group has argued that the current cost of goods arriving in Auckland via Ports of Tauranga, is no different despite the extra land distance travelled.
Ports of Auckland said that would change if the city's operation was not there to provide competition and keep port costs low in Tauranga.
'Just as opening a Gull petrol station lowers prices at stations nearby, having a port in Auckland keeps import prices low,' said Tony Gibson, POAL's chief executive.
The NZIER study put the additional cost on goods coming into Auckland if the city had no port at between $533m and $626m.
The 2017 election policy of New Zealand First to close and relocate Auckland's port was recognised in the coalition agreement with Labour, which provided for a Government-funded working party to produce a detailed report.
The third and final report recommended the shift within 15 years, but preferably within 10 years, and an economic analysis said the extra cost would be only $1.8b more than what would be spent if the upper North Island's three ports continued on their current paths.
That figure has been contested in two analyses commissioned by Ports of Auckland, with one by consultant Castalia estimating the true cost could be nearly four times higher.
The full cabinet is expected to consider the working party report before Christmas, and decide whether further work on the proposal should proceed.