Conflicting claims about who can and cannot say what happens between the Auckland City Council and the Ports of Auckland Ltd can be explained for Tauranga ratepayers by calling PoAL a giant CCO.

PoAL is just like the Tauranga City Council CCOs; Tauranga City Aquatics Ltd and Tauranga City Venues Ltd.

And similarly, the Ports of Auckland Ltd is owned at arm's length by Auckland Council Investments Ltd.

Recent calls for Auckland's mayor, Len Brown, to step into the political argument between the port company and the union are prompting ACIL chief executive Gary Swift to clarify the roles.

'It's ACIL, not Auckland Council, which has the obligation for the governance of PoAL,” says Gary.

'The council's role is to appoint a board of directors for ACIL and establish a yearly Statement of Intent.

'ACIL is then responsible for establishing a Statement of Corporate Intent for PoAL and for appointing its board of directors.

'The mayor, Auckland Council or ACIL does not manage the operations of PoAL and that includes its employee relations.

'Those decisions are wholly a matter for PoAL's management and board.”

ACIL's legislative obligation is to bring a strong commercial focus to the ownership and governance of PoAL – in other words, to deliver a commercial return, says Gary.

Since new appointments were made to the PoAL board in 2010, the board at the direction of ACIL has put in place new strategies to increase profitability, designed to provide an adequate financial return.

These strategies include labour flexibility, increasing revenue per container, freezing non-essential capital spending and completing a review of PoAL operating processes to ensure PoAL is operating effectively and efficiently.

By implementing the new strategies, the profitability of PoAL would be equivalent to a 12 per cent return on shareholders' funds by 30 June 2016.

Current return is six per cent.

'The 12 per cent over five years was agreed to in order to achieve a better return for Auckland ratepayers and ensure PoAL is as successful as it can be,” says Gary.

'It is a measure we've set, which is actually its net profit after tax as a percentage of their shareholder funds, not a dividend or return on investment of that level.”

The target was set prior to the commencement of collective bargaining and was incorporated into the thinking that informed PoAL initial offer, which excluded the full contracting out model.

Greater labour utilisation forms only part of PoAL's strategy for achieving a better return, and it's wrong to assign blame for the current situation on the target, says Gary.

If the target hadn't been put in the SOI the PoAL board would still be implementing the same strategies.

In addition to the investment in POAL, ACIL owns 22.4 per cent of the shares in Auckland International Airport Limited and 100 per cent of the shares in Auckland Film Studios Limited.

It also manages a diversified financial assets portfolio for the council.

The value of investments that ACIL owns and/or manages is about $1.7billion.