Wellington Airport

Just over $2bn in economic benefits for Wellington – how alluring does that sound? Such was the golden carrot dangled over the region last week in the shape of the cost benefit analysis for Wellington International Airport’s proposed runway extension.

The contents of the analysis were not unexpected and came amid a plethora of reports which WIAL chief executive Steve Sanderson said provided a ‘high level of confidence’ for the airport to proceed with an application for resource consent.

However, barely had the dollar signs hit the headlines than commentators began digging a bit deeper and the gilding on the carrot started to fade. Many questions were raised – including “If they build it, what if no-one comes?”

Therein lies the crux of the matter. What we are seeing from WIAL and supporters of the proposed extension is a “build it and they will come methodology” rather than “build the city and they will come”.

Wellingtonians need to understand the calculation of a net benefit of just over $2bn is only a cost benefit analysis and not a business case report.

Yes, it looks positive on a simplistic level but it also assumes an unsustainable level of flights and is wildly optimistic. Even the council’s own investigations have shown that, for instance, North American airlines are highly unlikely to fly into Wellington.

There are airports with the capacity to handle international that struggle to attract them. Christchurch and Canberra have worked very hard to attract and sustain long haul services despite bigger populations.

Crucially, the Board of Airline Representatives New Zealand (BARNZ) has said that none of the 19 airlines it represents are interested in flying long-haul into Wellington.

All things considered, the cost benefit analysis starts to sound rather like the initial economic impact assessment supporting the project. BARNZ commissioned a peer review of this, which found the assessment “overstated the benefits while overlooking the costs”.

Wellington City Council supports committing $90m to the estimated $350m cost of the airport.

WCC has already spent $2.95m on this process and committed $6.5m to help push consent through. Given the public concern and significant questions around the viability of the plan, the council must commission a detailed business case before it commits any further funds – including for resource consent.

Councils are expected to be fiscally responsible in the ways they use ratepayers’ money – to press ahead with this plan without more in-depth investigation would be irresponsible.

I urge Wellingtonians to call on their elected representatives to reject the ‘build and they will come’ methodology and instead adopt a ‘promote it and they will come’ approach to attracting the world to Wellington.

Sapere, the independent economic research provider which prepared the cost benefit analysis, suggests the “most economically efficient” way to get most of the money would be from the taxpayer.

A council and Government investment of that kind into making Wellington a more liveable city for residents visitors those wanting to do business would have a huge impact on the economy.

Innovators, creatives, scientists, entrepreneurs and academics want to see Wellington as a place that offers the lifestyle they want, a city that thrives and attracts like-minded people.

We should consider using the money to create the conditions to attract such a mix of people. That means better infrastructure such as affordable public transport, housing choice, good schools and community facilities, reduced barriers to development and construction, services and facilities to assist start-ups and small/medium business, improved attractions and events and a convention centre.

The key to driving regional economic growth in Wellington is not a runway extension, but selling the capital as a place for long term liveability.

We need a strong proposition to offer the world compelling reasons to come to Wellington and we need to take that message to the world. That would have more lasting impact on our economy rather than a speculative investment in a runway extension.

ENDS

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