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A joint company involving the Waitaki and Mackenzie District Councils is being proposed as the best way to manage and operate the Alps 2 Ocean cycle trail.
The Waitaki District Council tomorrow will consider what option is the best to manage the 312km trail from Aoraki/Mt Cook to Oamaru in conjunction with its neighbour.
According to a report for the Waitaki council, if a company is established, it is projected to be making a $317,742 profit in its fifth year, generating income of $1.4 million with costs of just over $1 million.
The company would be a "council-controlled organisation" (CCO), which would require public consultation through a submissions process before a final decision was made to establish it.
It would operate, maintain and develop the Alps 2 Ocean trail.
The trail will use some existing trails, with others planned for construction, and is expected to start operating in the 2011-12 tourist season.
The Government has granted $3.25 million from New Zealand Cycle Trail Fund towards the $3.25 million estimated cost of the trail.
Waitaki chief executive Michael Ross said a range of options for operating the trail had been looked at, with the CCO structure selected as the best.
The trail had to be self-funding, with neither council providing long-term funding for it.
The company would have responsibility for trail development and maintenance, marketing and daily trail management and would liaise with key partners, including the Department of Conservation, the Waitaki Development Board's Tourism Waitaki, the Mackenzie Tourism Development Trust and Meridian Energy Ltd.
It would also communicate with stakeholders and the public to ensure the trail was meeting the needs of the market.
"The trail is heavily reliant on private sector support to trail users for accommodation, bike hire and transport.
"If the trail is not adequately serviced, visitor numbers will suffer and available funds to maintain and develop the trail will be limited," he said.
The Waitaki council tomorrow will consider whether to approve:
• Setting up a joint committee with the Mackenzie council to monitor the trail construction and look after the councils' interest in a joint-venture company.
• Subject to the outcome of consultation, establishing a company, with the Mackenzie council to operate the trail.
• Approving a statement of proposal to establish a joint company.
• Carrying out special consultation after the proposal is released.
• A summary of the statement of proposal be prepared for consultation.