Decision not to pursue asset sales ‘short-sighted’, business leader says

Thursday, 14 December 2023

A Christchurch City Council decision not to pursue asset sales lacks leadership, courage and foresight, a business leader says.

But others are hailing the move as the right thing to do and have called for the board and chairperson of the council’s investment company, Christchurch City Holdings Ltd (CCHL) to resign.

The city council on Wednesday decided not to proceed down a path which could have paved the way for the partial or full sale of assets like Christchurch Airport and Lyttelton Port.

The decision followed a close vote and a fiery debate which featured regular interjections from the public gallery, which was packed with people opposed to asset sales.

CCHL had asked the council to let it take control of the assets in a bid to increase dividends for the city by an estimated $450 million over 10 years.

The council voted eight to seven not to develop a business case to cede control of assets to CCHL, which oversees $5.8b worth of city assets.

The decision was met with a standing ovation and cheers from the gallery.

Following the meeting, Business Canterbury chief executive Leeann Watson said she was disappointed at the council’s decision, which she labelled as “short-sighted”.

“To me it lacks leadership, it lacks courage and it lacks foresight. It’s incredibly disappointing. It does not take a long term view at all.”

Keep Our Assets Canterbury convenor Murray Horton congratulated the council for doing the right thing.

Former mayor Garry Moore, who spoke at the meeting in favour of keeping assets, called on CCHL chairperson Abby Foote, her board and acting chief executive Paul Silk to resign.

He said the city needed a chair and a board who understood the passion of the city’s residents, who were not committed to selling assets.

“The chair, the board and the acting CE should all resign and allow the council to appoint people who are more in tune with the People’s Republic of Christchurch.”

Foote, who would not be interviewed after the decision, did not want to comment on Moore’s call.

In a statement Foote said she was disappointed with the decision, but welcomed the clarity.

She said the decision left challenges that needed to be addressed and the board would work with the council on how best to approach those issues.

During the meeting, mayor Phil Mauger painted a dire picture.

He said if CCHL kept going with the status quo it would “hit the wall in 2028” and the council would have to have “a fire sale” of its assets.

He then criticised councillors’ lack of business experience, before being drowned out by the gallery.

“Sadly, we have got some people around here with little or no business sense making a decision. Some of them have never run a business, never hired a person. They have no idea on where we are heading.”

Councillor Victoria Henstock branded the decision as “undemocratic” and said it “defied logic” not to carry out full due diligence.

Her speech was met with boos and jeers from the crowd, with one person yelling out that she was “twisting things”.

Cr Aaron Keown echoed Henstock’s concerns.

He said he wanted to let democracy speak and let the other 400,000 people of Christchurch, who were not in the council chamber, have their say.

A decision to proceed with the business case would have led to public consultation next year, before any final council decision on the future of the assets was made.

Council interim chief executive Mary Richardson said the council and CCHL had already spent more than $1 million on the strategic review. The business case work had also already started.

Cr Mark Peters said he hoped the council had enough common sense and wisdom to finish the business case process.

He asked the public gallery if they wanted to keep paying higher rates.

Many called out “yes”.

The council is expecting a rates increase of 11.3% next year and 10.9% the following year, as it grapples with rising insurance, interest and inflation costs, while also paying for the $683 million stadium Te Kaha.

Deputy Mayor Pauline Cotter asked councillors not to continue to throw money and resources into something that would allow CCHL to “tinker, dilute, and sell off bits and pieces”.

Cr Melanie Coker said giving CCHL autonomy came with risk and asked how the council could be 100% sure that CCHL would always act in Christchurch’s best interests.

“We have already seen a fraudulent chief executive at CCHL in very recent times. This mistake could happen again.”

Councillors who voted in favour of progressing the business case were Aaron Keown, Victoria Henstock, Tim Scandrett, Mark Peters, Phil Mauger, Kelly Barber and James Gough.

Those against were Jake McLellan, Andrei Moore, Tyla Harrison-Hunt, Melanie Coker, Pauline Cotter, Tyrone Fields, Yani Johanson and Celeste Donovan.

Sam MacDonald and Sara Templeton did not take part in the discussion or vote due to a conflict of interest, as the pair are on the CCHL board.

Earlier in the meeting, Nathaniel Herz-Edinger, of the Living Wage Movement Aotearoa New Zealand, said people were deeply concerned about losing democratic control of assets, including the airport.

He said after the earthquake people just wanted its lines company Orion to get the power back on - people did not care about its balance sheet or dividends.