Airport legal bill $567,000

The controversial alliance between Queenstown and Auckland airports has cost Queenstown ratepayers more than $560,000 so far, and the final cost in litigation costs and legal fees is still to be determined.

But Queenstown Lakes District Council finance general manager Stewart Burns said he was "confident" the council would be able to offset the costs through savings in other areas.

Council corporate and regulatory services general manager Roger Taylor told the Otago Daily Times the total cost of the legal bill should be known by the end of this month, as fees were incurred up until the High Court action was withdrawn by Air New Zealand and the Queenstown Community Strategic Asset Group on May 13, three days before the High Court judicial review into the strategic alliance was scheduled to be heard in Queenstown.

However, the council incurred more than $80,000 in legal fees during April, with the legal bill sitting at $401,065 at March 31 and rising to $482,098.25 a month later.

Additionally, the council has received the invoice for the 72-page report it commissioned from PricewaterhouseCoopers in December.

The report examined the fairness of the transaction in which Queenstown Airport Corporation created and sold 24.99% new shareholding to Auckland Airport for $27.7 million.

It was originally set for release in January, but delayed until February and then delayed further due to the February 22 earthquake, with the invoice only recently received by the council.

Mr Taylor told the ODT it cost $85,719.90 which was "where we expected it to be".

"I had thought somewhere between $75,000 and $100,000, so it's in the lower end of my expectation."

The total cost of the airport issue to ratepayers is $567,818.15, which will rise again.

"We were incurring costs until mid-May until notice of discontinuation [of the judicial review] was received." Mr Taylor said the council had been paying the bill along the way, but "we certainly didn't have it budgeted for in the 2010-11 annual plan".

Mr Burns said the council was prepared for the bill to increase, but did not expect it to rise substantially.

"[It won't rise] a lot more from where we are, but there were costs right up until the last day.

"A lot of work was done to finalise affidavits and that sort of thing.

"It is unfortunate that we got to that point before the action was withdrawn.

"Our hope and our ambition for dealing with that for this year will be ... to offset that in the savings in other areas."

Mr Burns said the council would first look to the administration budget, which to the end of March had been underspent by $640,000.

"We had savings in regard to the employment of staff and, in particular, in areas where we have not replaced vacancies ... Across the board they amount to a significant figure.

"Obviously, that's where we will look to first.

"We are confident that we'll be able to offset those airport costs in that fashion."

Mr Burns said the council's finance and corporate committee would next meet to discuss the matter on August 9.



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