Port Otago stopped dead the privatisation of Lyttelton Port of Christchurch in 2006, but the sale of its 15.8% stake to the Christchurch City Council is ringing alarm bells for the Maritime Union of New Zealand.
It appears selling some of the council-controlled assets - Christchurch's port, airport and electricity supplier Orion - are all options to be considered in coming months.
The council faces a $880 million shortfall in its share of the overall $40 billion rebuild of Canterbury, and has signalled it would like $400 million of capital released by Christchurch City Holdings Ltd (CCHL), whose assets include Lyttelton Port of Christchurch (LPC), Christchurch airport and electricity supplier Orion.
Port Otago's contentious stake initially put a stop to the council taking over and delisting LPC in 2005-06, which had intended to sell a large stake to offshore, port management company Hutchison.
However, the Christchurch council is now poised to complete its 100% takeover of LPC by September 23, having secured Port Otago's agreement to sell its 15.8% stake, for about $67 million, meaning the council will compulsorily mop up the remaining less than 10% of shares on issue.
Maritime Union of New Zealand president, Garry Parsloe who is travelling in Korea and was contacted yesterday, said the union was against any form of port sale.
''When there is a [port] sale the first thing done is restructuring. Jobs are threatened,'' he said.
Christchurch Mayor Lianne Dalziel was in China and not available for comment yesterday, but councillor and finance committee chairman Raf Manji said the buy-back would give the council ''flexibility and more options''.
Mr Manji, who is also a CCHL board member, declined to specifically discuss the LPC buy-back, given it was still in the process, but said that, in general, asset sales were an option, and consultation with the community had just opened on the future, ''strategic use'' of the assets.
When pressed about the council having a ''strategic stake'', in LPC, Christchurch airport or Orion, Mr Manji said that would be through maintaining a controlling 51% stake.
In response to the concerns raised by the union, and jobs, Mr Manji said, ''We want the port working as efficiently as possible, for everyone, all of the time.''
He said the ''strategic uses'' of assets were ''yet to be defined'', but following public consultation the council might be in a position to make a decision on the future of the assets by the first quarter of 2015.
Forays into New Zealand's waterfront during the past decade, by new domestic stevedoring companies through to port ownership, have, for the union, centred on job casualisation; the use of generally lower paid staff, as and when required.
Mr Parsloe said, ''They [Christchurch council] may well look at it, but my advice is don't sell it, because once it's gone there's no going back.''
The maritime union's monthly magazine The Maritimes said in its editorial the share buy-back ''looks like the first steps in a renewed bid for privatisation''.
''The current development of strategic [shipping, supplier and port] alliances, including the Port of Tauranga's buy-in to the Port of Timaru and nearby inland ports, will be renewing pressure on LPC to hook into a similar alliance; perhaps another GNT [global network terminal] operator.''
Craigs Investment partners broker Peter McIntyre said the Christchurch council had been ''stifled'' by the eight-year-old Port Otago stake in LPC, but for the council it was worth ''paying above the odds'', to regain control of LPC.
''The [100%] ownership now gives them plenty of options and flexibility in the long term,'' Mr McIntyre said. Port Otago will receive $4.20 per share, including a 20c special dividend, which equates to a premium between 23% and 14%, based on a recent range of independent valuations of LPC's shares.
