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Cost of the Ports of Auckland fiasco

Written By: - Date published: 11:03 am, March 29th, 2012 - 6 comments
Categories: accountability, auckland supercity, business, transport - Tags: , , ,

Bloggers seem to be asking the best questions on the cost of the POAL fiasco. Here’s NRT:

Asleep at the wheel

How much has the Ports of Auckland dispute cost Auckland’s ratepayers? As the ultimate owners of the port, you’d expect the Auckland Council to take a strong interest in this. However, you’d be wrong. According to an OIA request lodged through the fyi.org.nz website,

Auckland Council and Auckland Council Investments Limited do not hold any information in connection with the cost of the dispute.

Think about that for a moment. Auckland Council is relying on the dividend stream from a profitable port to help pay for Auckland’s rail network. And yet they claim to have no idea of the cost of this dispute, and therefore how it will affect their plans. Its even worse in the case of ACIL; they’re paid big bucks for governance and oversight of the Auckland Council’s investments, including the port. But apparently they don’t have any idea either. Which invites the question: what exactly are they doing to earn that money? Because it sure as hell isn’t “taking an active interest so as to maximise their shareholder’s profits”.

This is an appalling revelation. It shows both the Auckland Council and ACIL are asleep at the wheel and failing to exercise the degree of oversight and governance we would expect. The people of Auckland deserve better than this. And they should demand it at the ballot box.

Unbelievable. Stepping in to the void left by the Council, Robert Winter has a go at estimating the cost:

Cost of the Ports Dispute?

No Right Turn shows, astonishingly, that neither the Council nor ACIL are keeping track of the costs of the management-driven POAL dispute. It is baffling that no such data are available, so here’s my rough estimate:

2011 Operational revenue  $175.4 million

divided by 365 days

approx. $480,000 daily operational revenue

Let’s assume (generously) that the port is working at 15% of capacity as a result of the dispute:

approx. $408,000 daily operational revenue loss

Additional costs as an effect of the dispute (legal fees, consultancy advice, extra security, research charges, PR costs), guessed at $20,000 daily:

immediate losses about $430,000 daily (lost operational revenues plus extra costs). The real figure is probably higher.

So, let’s assume that the dispute will go on at least until May 16th (unless the management strtaegy folds, which is likely):

49 days (from today) at $$430,000 daily = $21.1 million losses

Management would want to off-set salary and other  savings, of course.

Then one would want to add added costs for the economy e.g. training in supplies from Tauranga, disruptions to producers and consumers as a result of materials stuck on the wharves or waiting elsewhere to be sent, the cost to the Council of Alan Galbraith etc. (and the costs to MUNZ and its members!)

Any suggestions about how to improve this very rough calculation?

No wonder the Council doesn’t want to know.

6 comments on “Cost of the Ports of Auckland fiasco”

  1. KeepOurAssetsDon'tSell. 1


    “Sack the Board | John Minto (Mana VP)”

    ““Auckland Council has no option but to sack the Ports of Auckland’s Board of Directors” says Mana Vice President John Minto following yesterday’s Employment Court decision.

    The Court has upheld and extended an injunction to prevent the Board taking action to sack the workers for another two months. The Court has also said that the Board has a case to answer regarding the legality of their decision to contract out work at the port and their failure to act in good faith”.

    “The court decision is a solid win for the workers”.

    “It’s obvious to everyone the Port has contempt for its employees and their right to decent employment conditions. It’s a long time since we’ve seen such naked nastiness from an employer”.”

    ““This contempt has overridden their responsibilities to the people of Auckland. They are prepared to sacrifice consumers to increased costs and even allow a negative impact on New Zealand’s GDP in their irrational pursuit of the union”.

    “How many more millions of dollars can Auckland lose because a pack of capitalist arseholes are hell-bent on sacking blue collar workers who are standing up for their rights?”

    “Board Directors Richard Pearson, Graeme Scott, Andrew Bonner, Rob Campbell, Liz Coutts and Wayne Walden must go”.

    Mana supporters will be attending a 10am protest at the Auckland City Council meeting at Manukau City Centre tomorrow to demand the board be sacked.”

  2. In breaking news the Employment Court decision is out.  I have not seen a copy but reports are the Court has found the Union has a “seriously arguable case” that Port had breached ERA and undermined barganing.

    Time for saner heads to prevail.

  3. Some aspects of the Judgement;

    [1] These are my reasons for issuing interim injunctions on 27 March 2012 in the following terms:

    (i) The defendant will take no further steps to advance or implement the proposal to make the plaintiff’s members redundant.

    (ii) The defendant will not dismiss the plaintiff’s members.

    (iii) The defendant will not employ or engage Drake New
    Zealand Ltd or Allied Workforce Ltd or any other person to
    perform the work of striking or locked-out employees in
    breach of s 97 of the Employment Relations Act 2000.

    (iv) The defendant will instruct Drake New Zealand Ltd and
    Allied Workforce Ltd and any other contractor employed or
    engaged by the defendant to cease any form of advertising,
    training or recruitment or any form of preparation for those
    activities on behalf of the defendant or otherwise.

    (v) The defendant will not make any statement to, or which
    could, encourage any union member to seek or accept
    employment with the contractors identified in (iv) above.

    (vi) In the event that the defendant intends to employ or engage
    any other person to perform work covered by the collective
    agreement in dispute, it will give the plaintiff 48 hours’
    notice to enable the plaintiff to apply for relief.

    [8] The defendant will not take any further steps in relation to
    applications for voluntary redundancy until 5pm on Friday 30 March 2012 orfurther order of the Court.

    [24] I find that there is a seriously arguable case that the actions of the defendant in allegedly threatening to and then deciding to contract out the work on which the union employees were engaged under the expired collective agreement whilst collective bargaining was on foot for a new collective agreement was likely to undermine and arguably has undermined the bargaining. It will also, arguably, undermine the bargaining in the future. It is therefore seriously arguable that those actions have breached s 32(1)(d)(iii) of the Act. This section provides that the duty of good faith in s 4 of the Act requires a union and an employer bargaining for a collective agreement to do a number of things. These include the requirement in subsection (d)(iii) that the union and the employer:
    must not undermine or do anything that is likely to undermine the bargaining or the authority of the other in the bargaining.

    27] Mr Carruthers submitted that, even under the Employment Contracts Act 1991, mass dismissals for bargaining purposes had been found to be unlawful in McCulloch v New Zealand Fire Service Commission3 and New Zealand Seafarers’ Union Inc v Silver Fern Shipping Ltd (No 2).4

    • Craig Glen Eden 3.1

      Thats a spanking in anyones language, holy heck. Its well deserved though and certainly paints a very clear picture of a an employer acting in very bad faith. Time for Len to stand up and take some action before this port starts producing a big loss.

  4. Mel 4

    Yes it’s time for the Auckland Council to stand up and deal with the dysfunctional POA board.

    It’s also time for all those self-serving individuals who blamed the union for the Port’s problems to eat a little humble pie.

    They never seemed to understand the irony in their blaming of the port workers for the POA board’s actions. 😉

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