Boards upset about proposed share gift

Press, 21 May 1987, Page 9

Boards upset about proposed share gift

Harbour boards are upset that the Government proposes to give half the shares in the new port company to territorial local authorities. Harbour board reorganisation plans were announced by the Minister of Transport, Mr Prebble, in March. “Harbour boards will own 50 per cent of their companies with the other 50 per cent to be distributed among their constituent local authorities,” he told the Harbours Association annual meeting in Greymouth.

Chief executive of the association, Mr Joe Murray, said there was no reason why the authorities should receive this gift.

The Government had said the local communities had contributed to the development of harbour boards. “But that is not the case in the majority of ports. It is port users who have paid for port development, not the ratepayers,” he said. The extent to which the local community had an interest was reflected in the fact that harbour boards were elected by the community.

The Harbours Association did not object to the formation of port companies in order to func-

tion in a more commercial manner, Mr Murray said.

"It is the shareholding control of port companies that is the basic issue.” To make things worse, the local authorities could sell their shares to anyone, including overseas interests. “At the present time the proposals do not include any restriction on the sale of shares, including those owned by the harbour board. It is a step towards true privatisation.” Mr Prebble said last evening that the issue of shares and control over the sale of them was still not decided. However, in his March announcement he said, “It would be inappropriate to force any harbour board or local authority to retain shares if they thought that this capital might be put to better use elsewhere. “Provision will therefore be made for the sale of the shares at the discretion of the shareholder. Put simply, the public, as shareholder, will be given the choice of whether they wish to dispose of their assets.” Mr Murray said the shareholders could even sell to other harbour boards, with smaller boards losing autonomy

altogether. Another problem with the proposed reorganisation of harbour boards was the Minister’s requirement that the new port companies pay a dividend. “This must mean an increase in port charges,” he said. He quoted the chairman of the Wellington-Harbour Board who said tliat if the port were conservatively valued at $5O million, the company would need to make $5 million profit to pay a 10 per cent dividend to shareholders. Mr Murray said this also raised the problem of valuation of assets. “How do you value a breakwater?” he said. “Who will pay for the community activities which will not come under the new port companies?” The Harbours Association was not opposed to the greater degree of commercialisation, but was seriously concerned about some of the Minister’s proposals. Discussions were continuing with Mr Prebble. “We nope we can change some of these proposals before they are set in legislative concrete,” Mr Murray said.