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Two years later, a second airport deal with China

runway-extended [1]

by Lindsay Shelton
Wellington now has not one but two deals with Chinese construction companies who have both agreed to work on the airport’s expansion. Will they be competing with each other?

The latest deal was finalised in Beijing on Sunday. It’s a Memorandum of Understanding signed by the airport company’s deputy chief executive Matt Clarke with a Chinese construction company – the China State Construction Engineering Corporation – and a Chinese airline who, the DomPost reports [2], are to work together with the airport company on the runway extension and development of the area, such as building hotels.

The first deal – also a memorandum of understanding – was signed in Beijing in September 2015 by the city council [3], represented by Cr Jo Coughlan. The two Chinese signatories were another construction company and a property development company. The document was signed in front of a banner [4] which said “Wellington Airport Expansion Project Signing Ceremony.”

With this deal, said the council, [5] Wellington was set to attract significant investment from Chinese companies, and had formalised a partnership to explore funding not only for the Airport’s proposed expansion and hotel, but also the convention centre and housing developments in Shelly Bay. Two years later, no such funding has yet been announced, though WREDA’s (now former) chief executive said at the time there was “a very good base for Wellington business investment, based on a solid foundation of collegiality.”

City council chief executive Kevin Lavery was present at both signing ceremonies. He says the latest deal is about the broader economy, not just the runway. ‘It’s about opening Wellington to the world .. ultimately it’s about more people coming to the city and giving businesses more opportunities.”

The construction company which signed Sunday’s agreement, says Mr Lavery, is the biggest construction company in the world and “as the order books of New Zealand construction firms are full … we need as much labour and expertise as we can get.” The company’s president says it’s working on big projects in 46 countries, and has been working in New Zealand since 2015 with two developments – a “super high-rise” apartment block in Auckland and a hotel. His company would also like to help develop the “economy around the airport”.

Similar remarks were made by the other construction company in 2015. Its chief executive said “This is just the beginning. We are interested in every project, there are a lot of other things to be done.” And the property development company said completion of the Wellington projects would attract more international tourism and thus more demand for hotel rooms in the city.

The airport’s Matt Clarke sounded cautious on Sunday, no doubt aware of the earlier MOU. He said: “The MOU says we will work with CSCEC on the project as a partner but the selection of any final main contractor will be decided later.,”

The airline which signed on Sunday is China Express, described by the DomPost as a regional airline with global ambitions. Its vice president said he was confident it could achieve its job of attracting Chinese tourists, but he’s not quoted on whether his airline would need a longer runway before it could come here.

Mayor Justin Lester seems less optimistic than usual during his visit to China. Before the airport deal was signed, he told the Chinese that Wellington was ranked the most livable city in the world, but it had one big problem: “Our front door to the world is closed because we don’t have a truly international airport.”

As there are almost 900,000 international passengers travelling through the airport per year, it’s hard to agree with his closed door analogy.