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New aircraft engineering premises will keep jobs

New aircraft engineering premises will keep jobs in the city

Christchurch City Council has given approval to its investment company Christchurch City Holdings Limited (CCHL) to invest $20 million at Christchurch International Airport to allow the Christchurch Engine Centre to establish its new high-tech engine-test and overhaul facility.

To fund the facility, CCHL will borrow $20m, which will be used by a subsidiary company to fund construction of the new test facility. The subsidiary will then lease the new facility to Christchurch Engine Centre on a commercial basis.

The decision was announced today by the Chair of CCHL, Dr Paddy Austin and Christchurch Mayor Garry Moore following an in-committee session of the City Council on 27 February.

‘We’re extremely pleased that this project’s been approved in principle and now the parties will be working through the details,” Dr Austin said. “It’s a win-win partnership with the city’s world-renowned aircraft engineering centre. The Engine Centre will get a new purpose-built engine-test facility and we will receive a commercial rate of return on our investment.”

The Christchurch Engine Centre, which is jointly owned by Pratt and Whitney and Air New Zealand, announced an $80m expansion of its world-renowned aircraft engineering operations in Christchurch three months ago. The new centre’s base workload will be its contract to service the V2500 engines that Air New Zealand will be putting on its 15 new short-haul A320 Airbus fleet, along with a further 20 A320 aircraft under option by the airline over the next 10 years. A range of other airline customers will be sought; some are already customers of the existing facility.

“We’ve been talking to them for a couple of years now on how we can bring this about for the city, so it’s heartening to know the Council is in full agreement on this,” Dr Austin said.

Mayor Garry Moore, welcoming the Council’s decision to support the project, said it was vital for the city to retain the aircraft-engineering centre.

“Without the new facility, maintenance contracts for the new V2500 engine will go overseas,” Mr Moore said.

“This would result in the eventual loss of all 300 jobs at the Christchurch Engine Centre as old technology engines are phased out and the current test facility reaches the end of its economic life,” he said.

‘However, if the new facility proceeds, it will not only save those 300 jobs but will create a substantial number of new positions over the next 10 years – most of them highly skilled with comparatively high rates of pay – as well as 300 estimated construction jobs while the facility is being built.”

Mr Moore said this would directly put an additional $30.8m into the Canterbury economy annually (plus a further $16m in the initial construction phase) and would indirectly (through downstream jobs) create an additional 1374 jobs at a payoff of $77m annually.

He added that the Christchurch Engine Centre currently earned 97 per cent of its revenue from overseas customers and its overseas earnings were expected to double once the new facility was fully operational.

“Having such a facility in Christchurch will enhance the city’s high-technology reputation and will promote the city as an innovative, productive, highly skilled centre for engineering, avionics and related professions and trades,” he said.

Dr Austin said the deal had been negotiated to attract the joint venture to Christchurch, in the face of stiff competition from a number of other countries with existing facilities, while providing a positive commercial return on the investment.

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