3 December 2008

Mayor wrong on airport's importance - Greens

Green Party MP Sue Kedgley says she is startled to learn that Wellington Mayor Kerry Prendergast does not believe the city's international airport is a strategic asset, and considers that there is little to lose if Wellington City Council sells all of its 34 percent shareholding.

"I am astonished that the Mayor does not consider a key piece of monopoly transport infrastructure, which is one of the gateways into Wellington, to be a strategic asset, or see any strategic reason for council retaining its 34 percent share in the airport," Ms Kedgley says.

"If our airport is not a strategic asset, then what is? One only has to contemplate what could happen if an overseas owner were to buy 100 percent of Wellington airport, and run it in a way that did not coincide with Wellington's tourism, transport, and economic interests."

Infrastructure investments like airports are considered gold plated investments, and investors are scouring the world looking to buy up such strategic assets, she says

"Wellington City has made a significant return on its investment in the airport since the 1990s, when Ms Prendergast and others tried to sell it. The Council's 34 percent investment was valued at $45 million in 1992, and is now valued at $173 million - an increase of 385 percent. Not only has the asset appreciated in capital value, it continues to return a strong dividend of around $5.6 million per annum.

"I understand that council is seeking to reduce its debt, but why sell a key piece of infrastructure that has increased in value and is producing a good return?

"Besides, now is a terrible time to be selling any significant capital asset. The council has completely missed the boat with its timing given the credit crisis. Any attempt at sale today would see a markedly reduced price for such a prime asset."

Ms Kedgley says she is concerned that Ms Prendergast was taking the same privatisation stance she took when she argued for the sale of Wellington's well run, efficient Capital Power company in the 1990s.

"Ms Prendergast argued then that our energy company was not a strategic asset and would be better off in private ownership. Since Capital Power was sold it has been flogged off to different owners five times, and is now owned by the richest man in Asia, yet Wellingtonians are far worse off. There has been no real investment in our energy infrastructure, under a succession of new owners, and power prices for consumers have skyrocketed by over 700 percent."

ENDS

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