Airport alliance under fire

Deal brokers (from left) Queenstown Airport Corporation chief executive Steve Sanderson,...
Deal brokers (from left) Queenstown Airport Corporation chief executive Steve Sanderson, corporation chairman Mark Taylor, Auckland International Airport chairman Tony Frankham and Queenstown Lakes Mayor Clive Geddes said new capital would allow Queenstown Airport to fund growth of its operating capacity without increasing financial risk through borrowing more extensively. Photo by James Beech.
A $27 million deal to sell a quarter-share in Queenstown Airport without consulting ratepayers first was criticised yesterday by former mayor Warren Cooper as "deeply disturbing" and mayoral aspirant Vanessa van Uden, who said the process "sucked".

They were reacting to yesterday's announcement the Queenstown Airport Corporation (QAC) directors had issued additional share capital of 24.99% to Auckland International Airport, creating a "strategic alliance".

Under the QAC's constitution, any proposed sale of 25% or more would have triggered a community consultation process.

Cr van Uden said while directors had acted in accordance with the constitution... "I think we need to be seriously looking at the constitution".

Councillors had been told on Wednesday night and she described the reaction as "shock".

The deal had happened without consulting the previous sole shareholder, the ratepayers of the Queenstown Lakes district.

"When you have been presented with something like that, until you've had time to go away and think about it, you don't know how you feel," she said.

"It might be legally right, but morally, as the sole shareholder, we should have been advised of it."

She said the deal had been presented as a "win-win on paper", but there was no way of knowing there was not another local party who might have been interested, because "it wasn't advertised".

"I'm sure that the directors have done the right thing ... but there's something wrong that enables that without the shareholders being consulted.

"I know it's tricky ... but this is one of our strategic assets ... for me, the shareholders should have been consulted."

Mr Cooper said the decision should not have been made without some form of transparency and consent of the full council and the community.

"The airport exists to effectively and economically bring as many visitors to the district as is possible. There was absolutely no need whatsoever to get into a form of partnership with Auckland Airport.

"It would have been in everyone's best interests down here if they had taken more notice of successful local business people, and this bombshell is deeply disturbing.

Mr Cooper said the airport had been run during his mayoralty on the basis "external forces did not contradict the local aspirations. That is a risk that will grow".

The former mayor said he would like to know how many councillors knew of "this clandestine operation".

"The suggestion by the mayor it was necessary to do this is certainly unacceptable to me, as it will be to many knowledgeable people about local government and its acute inability to run things as effectively as private enterprise."

Mr Cooper said he would have been happier if whatever collateral was required to continue the development of the airport was obtained through the private sector.

Mayor Clive Geddes, who is not seeking re-election in October, said he objected strongly to Cr van Uden's call for a review of the QAC constitution. He said the comment was "an unfair reflection on the integrity of the board" and he did not believe there was any need to alter relationships between the council, company and community.

People were entitled to their own opinions, but he believed it was a "win, win, win all around".

"I think it's a very good deal for [QAC] and the ratepayers, as shareholders.

"For the first time, the ratepayer is going to see a return on the investment they've had for the past 50 years.

"At the same time, the ratepayer is going to have a lot of the risk attached to the continuing development of the airport mitigated.

"The [QAC] board, I believe, has acted in the best interests of the community and shareholders ... by the power of their constitution."  - Additional reporting by James Beech.

 

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