Council proposes assets transfer to Rotorua Airport company

Council proposes assets transfer to Rotorua Airport company

Rotorua District Council will consult the public on a proposal to transfer the assets of Rotorua International Airport to the airport company.

The proposed transfer would see the airport’s operations and the council’s asset ownership consolidated into a single entity, Rotorua Regional Airport Ltd, with the council retaining its 100% shareholding in the Airport.

Currently, the council is responsible for the ongoing capital development of the airport and ownership of the core infrastructure assets, with the Airport company focused on day to day operations and optimising the airport’s use and returns.

Under the proposed assets transfer, Airport assets valued at $46m would be transferred to the Rotorua Regional Airport Ltd, along with approximately $18.6m of debt associated with the airport’s developments. The council proposes to continue funding the airport .

The proposed assets transfer will improve transparency, accountability and ultimately the commercial performance of the operation, says Rotorua Mayor, Steve Chadwick.

“The airport is a significant community asset – not just for Rotorua, but for the wider region. The public needs predictability and confidence regarding airport funding and we can achieve that through this proposed transfer of assets,” she says.

The transfer would also streamline operations and financial management.

Mrs Chadwick says a good example of the advantages that would be brought about by the asset transfer, is a greater level of clarity about the previous costs of the Airport development and its resulting debt for the Council.

“There has been a common belief that the Council’s airport-related debt is $65m but the actual debt is $36m – this is the amount of capital spent on redevelopments, including the runway extension and is the amount of debt that can be attributed to the airport. We will transfer $18.6m to the airport company to ensure the commercial viability of the airport.

“Obviously this is complex but the proposed assets transfer and resulting structure will make it much easier for the public and provide complete transparency and accountability,” the Mayor says.

Because the proposed assets transfer would mean a change to the Rotorua District Council’s current Long Term Plan, the public will be consulted before a final decision is made and people will be able to make submissions on the proposal.

Rotorua Airport chief executive, Alastair Rhodes, says the proposed assets transfer has the support of the Airport board and will allow the airport to focus on future opportunities.

Further information about the consultation process will be provided to the public by the Council once consultation dates can be set.

[ENDS]

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