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Request for Transparency in MBIE’s conduct regarding the ski fields at Mt Ruapehu.
FOR RELEASE 11 JUNE 2023
FROM: Ruapehu Skifields Stakeholders Association
TO: Rt Hon Chris Hipkins, Prime Minister
CC: Kiri Allan, Virginia Andersen, Barbara Edmonds, Peeni Henare, Willie Jackson, Willow-Jean Prime, Grant Robertson, Carmel Sepuloni
Dear Prime Minister
I write in relation to Ruapehu Alpine Lifts (RAL), which was placed into voluntary administration on 11 October 2022. I would like to bring this situation to your attention and request that you intervene so the New Zealand Government does not rush any decisions without proper engagement with all interested parties and stakeholders.
Concerning Lack of Consultation and Implied Threats
Despite MBIE’s recent claims to have conducted adequate consultation, there appears to have been very minimal genuine attempt by MBIE to engage with all interested parties to find a solution for continued operation of the Mt Ruapehu ski fields. Reports from the local community indicate that there has been alarmingly limited consultation by MBIE to date with key stakeholders, and most importantly with local Iwi. This is highlighted in the recent Newsroom article ‘Ruapehu hapū warn Govt against selling ski fields without asking Māori’, published 6 June 2023.
PwC has previously requested approval to extend the watershed meeting to November 2023. Regrettably, this sensible request from the legal administrator of the company was denied by MBIE, with no explanation given. If approved, this additional time would have enabled the season to proceed with certainty and allowed sufficient time for proper, respectful negotiations with Iwi and other key stakeholders.
It is imperative that Iwi values, interests and the principles of the Treaty are respected in order for snow-based activities to continue on Mt Ruapehu. A pause until November 2023 would allow more time for proper consultation and for the best solution to be found.
We have recently become aware of emails and messages from MBIE to Iwi. These have inferred to Iwi that if no concessions are signed by 1 July, there will be no 2023 winter season. This has been seen as a tactic to pressure Iwi and local business if MBIE’s preferred plans to privatise and split the two fields are blocked by the concessions not being transferred to MBIE’s preferred operators.
Having a government department make such implied threats to the mana whenua of the region (whether in veiled terms or otherwise) is of deep concern to the stakeholders association because the ski community views ourselves as guests on the mountain and such conduct puts at risk the very existence of long-term snowsports in the region.
False Urgency Being Used to Railroad Process
Under the current timeline, PwC as the administrators, must provide and comment on any plan at least 5 days before a Watershed meeting (currently scheduled to be held on 20 June 2023). This only allows 10 days for any Tongariro National Park concessions to be agreed before the ski fields are planned to open (currently 1 July 2023). The compressed timeline raises suspicions that MBIE has deliberately influenced the process to minimise consultation and hinder stakeholders’ ability to conduct due diligence, react or voice objections.
All creditors and key stakeholders deserve a much higher standard of engagement, transparency, and independence from MBIE, who must act fairly and reasonably, in the interest of all. As previously mentioned, PwC has contingency plans in place that would allow the skifields to operate through the winter 2023 season if needed, ensuring minimal disruption for the local community.
Exclusion of Department of Conservation
It is astonishing that MBIE has seemingly excluded the Department of Conservation from this process despite their statutory responsibility for administering conservation estates and conducting the necessary consultation to ensure fair treatment of all stakeholders. Credible reports suggest that DOC was only brought in at the last minute. Further, the contingent liability of the ‘make good’ provisions (demolish and clean up, should the worst scenario come to reality) fall to DOC, not MBIE. We contend that DOC therefore hold the $80 - $100 million dollar contingent liability on behalf of the Crown and make their own assessment of how to vote at the upcoming Watershed meeting for creditors. Surely DOC should have been central to this process throughout. MBIE seem to have overstepped and done so behind a wall of confidentiality and non-disclosure through their insolvency advisors Calibre Partners.
Pause Process and Conduct Proper Consultation
We urgently call for you to intervene and delay this process to ensure a robust framework is put in place that ensures transparent consultation can take place. This will enable better decisions regarding the long-term future of snow sports on Mt Ruapehu.
The RSSA have consulted with various Iwi, locals, stakeholders and mountain users to understand what they would like to see happen with the future of the ski fields. In addition, RSSA have undertaken extensive surveys of the mountain community that demonstrate willingness to contribute approximately $20m towards this purpose. It is clear that more time is needed to address the current situation effectively.
Adversarial Process Imposed to Prevent Consensus
The RSSA initially offered to assist PwC and then MBIE collaboratively to assist with community consultation and stakeholder engagement. Unfortunately, the adversarial competitive corporate bidding process imposed by Calibre Partners and MBIE left RSSA with no alternative but to submit a DOCA proposal that best attempted to reflect the wishes of key stakeholders for the watershed meeting. The RSSA would like to raise serious concerns with you regarding this process due to the lack of consultation and transparency to date from Government officials.
Interference with Voluntary Administrator’s Duty to Operate Business
PwC has been appointed as the voluntary administrator for RAL. However, we question why MBIE has in effect 'taken over' so much of the process from PwC. For example, the bid proposals were called for by MBIE and reportedly have only been reviewed by MBIE to date.
A clear example of adverse interference in the operations of the company by MBIE is the delay in the season pass campaign. On 2 March 2023 PwC announced that season passes would go on sale 'soon', aiming to contribute approximately $5m of much needed operating cash flow for the 2023 season, and help instil confidence in local communities that the 2023 season would proceed. Regrettably, at MBIE’s request the season pass campaign was halted, with serious adverse consequences for the company’s cash position and the wider consequences to local businesses.
MBIE haven’t attended Creditors Meetings
MBIE's representatives have conspicuously failed to participate in creditor committee meetings over the past six months, despite being responsible for reviewing proposals from potential operators. Even PwC themselves have not seen the various bids. This apparent contempt for the administration process underscores our concerns about MBIE's conduct and lack of transparency.
Potential Conflicts of Interest
It appears that there are conflicts of interest and prior relationships between MBIE, PwC, Calibre Partners and their preferred bidders which have not been disclosed. We are deeply concerned about this, and this would suggest that MBIE needs to urgently step back from its assumptive role as shadow administrator and promote a transparent process.
Predetermined Outcome
The finance documents between MBIE and the company run to several hundred pages, but importantly they contain several references to a NewCo restructuring proposal. These contractual provisions suggest that MBIE already had a preconceived solution in mind and has been driving the overall process toward a predetermined outcome that would restructure the community-owned non-profit ski fields into a for-profit NewCo which goes against the delicate public interest balance contained in the concession agreements.
Restoring Balance to the Process
The Ruapehu Skifields Stakeholders Association was originally formed as an advocacy group with the goal of supporting the two ski fields, Whakapapa and Tūroa, on Mt Ruapehu. Our aim is to ensure that the ski fields emerge from voluntary administration stronger and more financially sustainable for the entire community and mountain users. The RSSA now represents thousands of mountain users and serves as a voice for the key group of Life Pass Holders, who are major creditors in the current administration.
As we all know, Tongariro is New Zealand's oldest national park and a dual World Heritage area. This status recognises the park's important Māori cultural and spiritual associations as well as its outstanding volcanic features.
We hope that you will take appropriate measures to intervene immediately and delay this process to enable proper consultation with Iwi and all stakeholders so that better decisions regarding the long-term future of snowsports on Mt Ruapehu can be made.
Yours Sincerely
Jason Platt
Chairman
Ruapehu Skifields Stakeholders Association
References:
https://www.savemtruapehu.org.nz/post/official-information-act-requests
https://www.pwc.co.nz/pdfs/2022/affidavit-of-john-fisk-in-support-affirmed-18-november-2022.pdf
https://www.newsroom.co.nz/the-last-ski-run-on-ruapehu
https://www.savemtruapehu.org.nz/post/stakeholders-association-letter-to-the-prime-minister
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