Plan to sell airport shares to regional council ‘madness’

Friday, 21 June 2024

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Local Government Minister Simeon Brown has delivered a slap-down to Wellington’s regional council as it weighs up buying the city council’s shares in the capital’s airport.

The Post revealed on Thursday that regional councillors had met behind closed doors to discuss options to retain public ownership of Wellington City Council’s 34% stake in the asset.

The city council voted last month to sell the holdings, worth about $278 million and establish an investment fund for repairs in the event of a major earthquake.

That decision has divided mayor Tory Whanau’s left-leaning voting bloc and thrown into question support for the city’s long-term plan, which is subject to a final vote next week.

The National-led Government is watching that process intently, and sources say if the council fails to agree on its 10-year-budget that could trigger ministerial intervention, such as a Crown observer.

On hearing news of the buy-up discussions, Brown said: “Councils are very quick to cry poor, but now they're looking at literally trying to buy a stake in an airport.

“They need to be focused on the core business of making sure that we have roads…[and] critical infrastructure that ratepayers rely on, rather than looking at getting into shares.”

It’s the second rebuke Brown has directed at Wellington’s local body figures in as many days.

On Wednesday, he said he was “appalled” by a new code from WCC chief executive Barbara McKerrow which restricted information shared with councillors. She has since withdrawn the protocols.

The idea of regional ownership of the shares was first floated at a recent meeting of the Wellington Regional Leadership committee, of which nine local mayors and regional council chair Daran Ponter are members.

It was also discussed at a closed-door meeting of regional councillors, where it was agreed to look at options to “help out” the city council. Officials were tasked with preparing advice on options, a “desktop exercise”.

There is no appetite among councillors to use ratepayers’ money to buy the shares, The Post understands. The council recently approved a 20% rates hike.

Regional councillor Thomas Nash said the regional council purchasing the shares was unlikely.

Another said they believed the idea was “cooked up” as a bid to soothe tensions on the left.

Now the proposal will be on the table at an upcoming regional mayors’ forum. That follows a letter from Lower Hutt mayor Campbell Barry to Ponter on Thursday.

“While I understand the challenging financial position of Wellington City Council (like many councils across New Zealand) we would be remiss as a region not to fully explore the future of Wellington Airport as a strategic asset of regional significance and undertake an in-depth analysis of retaining public ownership,” Barry wrote.

Both men are currently in England on an infrastructure tour.

City councillor Diane Calvert questioned why the regional council would take on debt to buy an asset that was in public ownership

“If it’s seen to be such an important public asset, why are we selling?

“The only ones who will make money from selling to the regional council are banks and lawyers.

“The whole idea is madness. WCC ratepayers will end up paying for an asset they already own as they are half the ratepayers of Great Wellington. Imagine the interest costs alone.”

– Additional reporting by Erin Gourley