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Despite early hopes of attracting 60,000 visitors a year, creating 555 jobs and opening up a market worth $21 million, council economic development unit manager Peter Harris said it had instead sparked sales of about $4.6 million, and helped create "around 34 jobs".
The project, the overall cost of which was released to the Otago Daily Times, has been criticised as a failure, but Cr John Bezett said that was not the case. The deputy chairman of the council's finance, strategy and development committee said the project's goals had instead "evolved", and the money spent had been used to help local businesses.
Mayor Dave Cull said the initiative "may have been successful at the time", but was less so of late, which was why it was being reviewed.
The project was set up in 1998 by Dunedin International Airport Ltd, a report from Mr Harris to a recent council finance, strategy and development committee said.
In 1999, the council adopted and expanded the initiative, in partnership with the airport, Tourism Dunedin, the Otago Chamber of Commerce and the University of Otago.
Questions were raised about the project's goals from early on in the process, with the Otago Daily Times asking in 2000 whether they were realistic.
Cr Lee Vandervis said at the committee meeting the project had been an "unqualified lack of success", with goals that were unattainable.
Mr Harris responded that despite best efforts, "some things work; some things don't".
His report said the project's goals had "morphed" from earlier goals.
Air freight possibilities had been pursued "without success, due to airline reluctance to detract from the Christchurch airfreight hub", while a Queenstown air link had been pursued through Mainland Air, "but the trial they ran did not attract sufficient demand to retain the service".
Detailing grants provided, he said 96 companies had been provided grants totalling $230,000 in the period 2001-08.
The percentage of visitors from Australia to Dunedin had risen 22% between 2004 and 2010.
"Some of the original goals have proven to be very challenging, and those issues that can be addressed are being dealt with on an ongoing basis by DIAL [the airport company] and Tourism Dunedin."
Asked what businesses used the funding for, he gave examples of those which: travelled to meet a client putting out a $1 million tender; exhibited at an industry conference in Queensland; hosted key Australian customers in Dunedin; and visited present and prospective Australian customers.
Cr Bezett said the idea of Project Gateway had been to engage with Australia's east coast, mainly Sydney.
"Over the years, it has evolved into something different."
Dealing with the "very, very volatile" airline industry had been "frustrating".
Freedom Air, at its height, had filled between 22,000 and 23,000 seats in one year, which was "very good for us".
There had been 14 or 15 flights a week, but "that has dwindled."