Govt keeping clear of airports debate

The Government is standing well clear of the debate over the competing airport proposals at Tarras and Wanaka put up by companies majority-owned by two southern local authorities.

Finance Minister Grant Robertson this week declined to be drawn when asked his opinion on a conflict described by some critics as "madness".

The Government owns 25% of the Christchurch International Airport Company (CIAL), which is proposing to build an international airport at Tarras.

The other 75% is owned by the Christchurch City Council.

The council earlier this month voted down a motion calling for it to express climate change concerns over the CIAL’s Tarras plans.

And in response to Otago Daily Times questions, Mr Robertson also showed no sign the Government wants to be involved either.

"The Tarras airport project is not a Government project; the Government is not involved in the decision-making process of CIAL on this matter," Mr Robertson said.

The Government does, however, appoint two of the six members of the CIAL board.

One, Paul Reid, of Wellington, has just been reappointed for a second term, while the 10-year term of Christchurch businessman Justin Murray ended on April 30.

Mr Murray was chairman of the board’s property and commercial committee.

Part of the committee’s role is to "review and recommend to the board approval of significant property and commercial investment".

Mr Murray declined to discuss the CIAL’s affairs when approached by the ODT.

The Government has yet to announce his replacement.

While the Government is the minority shareholder of the CIAL, it does provide the board with a letter of expectation.

The current letter, signed on December 4, 2019, by then-minister for state-owned enterprises Winston Peters spells out the Government’s desire for "sustainable" economic development and "preserving our natural capital, particularly in view of climate change".

The effect on climate change of a new Tarras airport has been the main argument used by its opponents.

Mr Peters’ letter also sought good financial performance from the board, and noted the Government’s preference was for "dividends over new investment".

Last year, the CIAL announced the $45million Tarras land purchase, but also paid a $20 million dollar dividend.

The company has said the effects of Covid-19 were the reason, not the land purchase.

A new Crown letter of expectation, for the period from July 21 to June 30, 2022, has not yet been approved for public release by the Treasury.

The CIAL board did not need the approval of shareholders before buying the Tarras land.

CIAL communications manager Yvonne Densem said the company was a stand-alone commercial entity governed by an independent board, and it would only need to seek shareholder approval for a transaction greater than 50% of the company’s $1.8 billion asset value — "$45m is therefore well within the commercial authority of the board, and not out of step with the investment our company regularly makes developing property and capital projects."

Ms Densem said when a final decision was needed on developing an airport at Tarras, the "CIAL would expect to consult with its shareholders, even if the major transaction threshold wasn’t reached."

Mr Robertson said it was important for the CIAL to work closely with the community.

"The proposal will also need to get resource consents to proceed, and this will inevitably be a public process where the positive and negative effects of the proposal on people in the local community, as well as on the environment, will be tested."

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