Auckland Ports owner fires independence flare

Graeme Kennedy

Friday 23rd April 2004

Regional fundraiser Infrastructure Auckland is questioning the independence of future Ports of Auckland directors, fearing political influence might undermine commercial interests.

Infrastructure Auckland owns 80% of the port company's shares, which will be transferred as part of the statutory body's $1.37 billion assets to a new organisation, Auckland Regional Holdings, on June 30 with the passage of the Local Government (Auckland) Amendment Bill.

Infrastructure Auckland chief executive Richard Maher said the organisation had the power to effectively appoint Ports of Auckland directors but left them to perform their duties under the Companies Act.

"We have refused to interfere in the affairs of a publicly listed company and the legislative provisions have been respected," Mr Maher said. "But with some of these provisions weakened, future owners of the majority shareholding of Ports of Auckland might find it more difficult to resist public pressure.

"Ports of Auckland plays a vital role in the regional and national economies and must operate to commercial imperatives."

Mr Maher said Infrastructure Auckland's independent board of directors was appointed by an Electoral College of local authority and Auckland regional council representatives. Its chairman is former National MP for Pakuranga John Robertson, who holds several directorships and is chairman of IT Capital.

Auckland Regional Holdings, unlike independent Infrastructure Auckland, will allow Auckland Regional Councillors and staff on its own and the port company boards. "If you have a board with elected representatives and council staff, there can be conflicting responsibilities," Mr Maher said. "Do they work to sound business practice or as elected representatives? Their accountabilities can be confused."

Mr Maher said several MPs, including a cabinet minister, had called for legislation to prevent Ports of Auckland selling Westhaven Marina, while a number of Auckland regional council councillors threatened to use their future majority shareholding in the port company to halt the sale.

Infrastructure Auckland, formed in 1998 from the Auckland Regional Services Trust, has grown and managed its assets for an 11% annually compounding return of about $550 million, which is given in grants to fund regional transport and storm-water projects.

Mr Maher said assets included a treasury fund of about $600 million, mostly in government stocks and cash, The America's Cup Village in the Viaduct and the cashed-up waste company Northern Disposals, which it operated jointly with the Fulton-Hogan group until selling its 50% interest 18 months ago.

He said the new Auckland Regional Holdings would be better able to manage co-ordination of large transport projects for the city.

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