After six years and delays and heavy costs, the Ports of Auckland has ditched its plans to automate its container terminal - and will write-off $65 million on the failed project.
The Auckland Council-owned port company said on Wednesday that "in the best interests of the company, its stakeholders, and the New Zealand supply chain", it had decided to end the automation of the Fergusson Container Terminal.
Ports of Auckland Board Chair Jan Dawson said the decision was made "after careful consideration of the current status of the project, advice from independent experts, and the work required to achieve full terminal automation".
"Our review indicated that despite the best efforts of our team and our supplier, the project is experiencing continuing delays to full terminal roll out, the system is not performing to expectations, and we do not have confidence in the projected timeline or cost to completion.
"With these uncertainties and the need to transform the Port's performance, the Board has determined the best course of action is to cease automation of the Container Terminal."
Chief Executive Roger Gray described it as "a positive decision" that would "come as a relief" to many at Ports of Auckland and in the wider supply chain.
"It gives us certainty about the future and allows us to focus on our core job: safely providing a great service to New Zealand importers and exporters. It will also help us get the business back to the level of profitability we have delivered in the past."
Gray said the end of automation does not mean the loss of all the investment and work that went into it.
"The new infrastructure built as part of the project – for example the new wharf and cranes – provides extra capacity which is essential for future growth."
However, the port would have to write-off approximately $65 million in investments that will no longer be used, "mainly the automation software and guidance system".
"Ports of Auckland attempted automation for the right reasons: to lift capacity, productivity and profitability without further port expansion or reclamation. I am confident we can still meet those aims; we will just take a different path. It was a bold and innovative project, but one that – despite the hard work of many - was unable to be delivered."
According to Ports of Auckland background material the capacity and automation project commenced in 2016 with the goal of "future proofing" the capacity of the port. The targeted delivery date for both the infrastructure and the automation projects was late 2019 / early 2020. The project included automation of some of the straddle operation to achieve significant capacity upgrades.
The automation involved a complex integration project involving multiple vendors, equipment, and software applications to design and implement an operation with targeted productivity levels and the necessary level of system safety assurance.
The infrastructure capacity upgrade work was delivered as planned. This included the new Fergusson North wharf and cranes as well as major pavement upgrades, a new truck loading area, new refrigerated container capacity and other upgrades.
The automation project is now two years over the initial delivery date and is continuing to be unable to meet operational targets.
As part of its review of automation the board commissioned two independent assessments from qualified experts. Both advised that a lot more money and time was needed to make the system fit for purpose, although neither could say with confidence how long or how much investment that would take. In addition, there was an expectation of ongoing disruption to our customers throughout this development and implementation period.
Based on the analysis and options available, the Board had determined that it is in the best interests of the company, its people, customers, and shareholder to discontinue the current automation project and return the Fergusson Container Terminal to a fully manual operation.
28 Comments
In the stuff article:
https://www.stuff.co.nz/business/128896212/ports-of-auckland-scraps-aut…
“I have consistently expressed the view that when it comes to implementing new technology, being at the cutting edge of implementing that tech carries a high level of risk,” Goff said.
Haha. Goff. Him and the previous Brown presided over the absolutely hugely expensive Council IT project.
Notice how he "consistently expresses" such views. Meaning that he was is and always will be very wise about such things..... In hindsight.
Also from the article, the union wasn't keen. I wonder if it got "helped" to fail.
"MUNZ national secretary Craig Harrison said the union had maintained for years that the automated system was not going to work."
Pretty hard to get something like that done successfully without workforce buy in.
Hard to get buy in when you are going to get rid of some cruisey jobs... https://www.poal.co.nz/media-publications/Pages/Stevedore-Remuneration-…
43 on over $100k, and 26hours of actual work in a 40 hour week, and that was in 2012.
Especially that Panuku and its chair P Majurey and his legal bills! In excess of $1m for losses in court for the TMA tree felling fiasco. And JT in the Human Rights Tribunal. That'll be over $1m by the time that is all over. Then there's the Kennedy Bay Marina Development on Waiheke to going sideways. All the issues are consent related and arbitrary decision making by unelected council officials.
OMFG. This was an unmitigated disaster. Over $140 million in port congestion fees levied on importers and exporters by the shipping lines using Ports of Auckland since October 2020. Multiple vessel diversions to Northport and Tauranga causing additional costs and delays. It just goes on and on. Blaming Covid for project delays while all along they knew the automation would probably never work as planned. Is the supplier of the equipment and software taking any hit? Or were POAL so incompetent with there part of the project the supplier could absolve themselves of any blame.
You can't really blame the Akl Council,this entity is run as a separate corporate arm with a CEO & Board of Directors.What it does show is what a load of rubbish that corporate types (Luxon & co) are the types we need to run the country.They are just as capable of wasting money with sometimes less accountability than Govt depts.
The real crime is the loss of life on the Port with their drive to incentivise movements over safety.
Let me try.
Seemingly devolve a part of your organisation off as a separate entity for which you own all the shares and appoint all the board of directors. All you have to do is take massive profit dividends each year and not ask questions of the board. Then everything magically is the fault of the board and not yours?
Think this report was posted on interest dot co before. Anyway, Auckland port is ranked as in the bottom 10% of container ports across a range of different factors.
https://thedocs.worldbank.org/en/doc/66e3aa5c3be4647addd01845ce353992-0…
Cynically that is the beauty of the proposed co-governance model. The state will own and/or control the assets. The state will appoint the boards. The state will take the profits. But Maori have co-governance.
And pretty easy to see who will be blamed for a fiasco.
Most IT/automation projects are still regarded as a big bang fixed cost exercise whereas they're not.
If you're trying to innovate / re-invent how you do things there comes a certain level of risk more akin to a research project.
It's the way these projects are managed (no incremental business value delivered until the big bang go-live) that make them fail ultimately.
If POA would have run this project in a truely agile fashion (I don't mean agile ceremonies + big bang top-down planning!) they would have achieved some business value for the 65mln they're now writing off.
It's the binary thinking of full-automation vs nothing at all that breaks the camels back.
Looking at the capability of TEAM sw , its clear the POA is a cut down version of the TEAM sw. How cutdown is hard to see. I guess the straddles are semi autonomous vehicles. I couldnt see any smaller drone vehicles in the normal TEAM approach. Ironing out the issues would take a very co-operative effort by the PA and the TBA engineeers. If there was a lack of co-operation it would make comissioning a live system potentially impossible.
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