ARC's $50m loss for ratepayers avoidable

Media statement Thursday, March 19th, 2009

ARC's $50m loss for ratepayers avoidable

Auckland ratepayers should be asking why their regional council is using public money ($262m) to invest in share markets and other financial assets which have lost $37.6m in the last six months, says Alasdair Thompson, chief executive of the Employers and Manufacturers Association (Northern).

The ARC's loss on investments totals $50m with its holdings in bonds and the Ports of Auckland (POAL) included.

"These losses would not have happened if the council had had its $1.15 billion invested instead in much needed public infrastructure," Mr Thompson said.

"The ARC is not an investment company and its 10 year long term council community plan (LTCCP) should provide for divestment of its $1.15m holding in the POAL and international and domestic shares and bonds.

"ARC ownership of the POAL business is both unnecessary and a risk to the company in meeting its objectives and the need of its customers.

"The ARC does not have to own the POAL when there is no shortage of private shareholder money available to invest in it.

"To remain competitive and meet changing world shipping needs will require much larger ships, fewer ports, and sector hubs, and it is likely to meet these requirements the POAL will need more capital or to merge with other port companies, which are things its ARC owner either cannot, should not, or has already declined to do."

"Instead the LTCCP should indicate those infrastructure projects where the ARC will usefully and safely invest ratepayers' $1.15 billion."

ENDS

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