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Wilson Parking getting rid of three Wellington carparks

News from Commerce Commission
Wilson Parking New Zealand Limited (Wilson Parking) has agreed to divest the leases of three car parking facilities it operates in central Wellington, in a settlement agreement with the Commerce Commission.

In June 2016, Wilson Parking New Zealand Limited acquired the long-term lease to operate the Capital car park (50-60 Boulcott Street), which comprised 659 parking bays available to the public. It did not apply for clearance from the Commission to acquire the lease.

The Commission began receiving customer complaints in February 2017 about price increases at the Capital car park, prompting it to investigate the acquisition under section 47 of the Commerce Act, which prohibits acquisitions that are likely to substantially lessen competition in a market.

The Commission filed proceedings in the High Court in 2018 alleging Wilson Parking substantially lessened competition for the supply of car parking in the Boulcott Street area when it acquired the rights to operate the Capital car park.

To resolve the proceedings, Wilson Parking provided court enforceable undertakings to the Commission, committing to divest the leases to three car parking facilities it currently operates, including Capital car park. The total number of parking bays being divested is 850. Wilson Parking will also pay $500,000 towards the Commission’s costs.

“Wilson Parking’s acquisition removed one of the few alternatives for motorists wishing to park in this part of Wellington’s central city, which, in our view, was likely to result in a substantial lessening of competition” said Commission Chair, Anna Rawlings.

“The divestment of three car parking facilities in the Wellington central area will reintroduce a measure of competition and will mean that customers will have an alternative to Wilson Parking.

“Anti-competitive acquisitions are a priority area for the Commission and this is a reminder to businesses that if there is any doubt about the competition effects of a merger, they should seek clearance from us before completing the deal.”

Wilson Parking must divest the car parking leases to a purchaser(s) approved by the Commission. It must also notify the Commission of any proposed acquisitions of new car parks in Wellington central for the next five years. 

Background

Wilson Parking
Wilson Parking is New Zealand’s largest parking provider, operating 282 car parking facilities throughout the country. It is part of the wider Wilson Group that has similar parking operations in Australia and Asia.

Section 47 of the Commerce Act
Section 47 of the Commerce Act prohibits acquisitions that are likely to substantially lessen competition. The Commission administers a voluntary regime that allows businesses to apply for clearance if they consider their planned acquisition could raise competition issues. If businesses do not apply for clearance, the Commission can initiate an investigation into a proposed or completed merger under Section 47. If a person breaches Section 47 they may be subject to a penalty of up to $500,000 for an individual or $5 million for a firm.

Enforceable undertakings
Enforceable undertakings are a form of out-of-court negotiated settlement. Where the Commission believes there has been a breach of the Act, the Commission may accept enforceable undertakings. They may include agreements by a person or business to stop doing something, make compensation payments, publish corrective advertising or pay costs to the Commission. If the party does not keep to their agreement the Commission may apply to the Court to enforce the agreement.

Media release from Wilson Parking
Wilson Parking and the New Zealand Commerce Commission have agreed to resolve High Court proceedings. The Commission has discontinued the proceedings against Wilson Parking without any admission of fault from Wilson Parking or any finding of a breach of the Commerce Act.

Wilson Parking said that it has cooperated with the Commerce Commission to achieve an outcome that addressed ongoing changes in the provision of car parking in the Wellington CBD.As part of the resolution, WilsonParking has agreed to divest three car parks and will work closely with the Commission for any new car parks in the Wellington CBD, to ensure a healthy competitive market is maintained in the best interest of New Zealanders.

The Kaikoura earthquake in November 2016significantly changed the market environment, damaging approximately 20 per cent of the car parking buildings in the Wellington CBD area. Most of the damaged car parking buildings were operated by other parties and some remain closed or are only available as smaller open-air sites to this day.

Chief Executive Officer of Wilson Parking New Zealand Ryan Orchard said that while the Company was confident in the litigation, it had been pleased to have reached an agreement that will result in a cooperative relationship with the Commission in the future.

“Wilson Parking is committed to continuing to invest in its operations to maintain its excellent service to ourcustomers,” said Mr. Orchard. “We believe that our open collaboration with the Commerce Commission is mutually beneficial and is an example of how we proactively work with the communities and businesses in building support for future endeavours.”

Wilson Parking is a proud member of the Wellington community and supports many local organisations, including StarJam (a program that connects young people with disabilities with their passions, peers and wider community), Lifting the Lid on Youth Suicide and the CubaDupa Street Festival. Nationally, Wilson Parking also supports Westpac Rescue Helicopter, New Zealand Fire Service, Plunket, and Breast Cancer Cure. Wilson Parking remains committed to its employees and confirms that no employees will be impacted by the divestments. Further to this, Wilson Parking continues to support Wellington businesses in rebounding from COVID-19 challenges through open cooperation and flexible customer offers, such as the Pay It Forward weekend offer.

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5 comments:

  1. D'Esterre, 23. October 2020, 12:29

    Ok. A commentator suggested recently that WCC ought to acquire parking buildings in the CBD, so that it can more easily implement its policy of removing street parking. This sounds like a plan to me. WCC can limit the work on the library to remediation of the floor connections (which is all that’s needed) and apply the money saved to the purchase of parking facilities. Thanks to Wilson Parking having agreed to divest itself of three parking facilities, WCC can acquire one or more of them. To the advantage of ratepayers who are obliged – or wish – to visit the CBD.

     
  2. julienz, 23. October 2020, 13:27

    I seem to recall a few years ago WCC divested itself of carpark buildings and then immediately increased the cost of on street parking, effectively gifting increased revenue to private parking businesses.

     
  3. D'Esterre, 23. October 2020, 14:31

    Julienz: “….WCC divested itself of carpark buildings and then immediately increased the cost of on street parking, effectively gifting increased revenue to private parking businesses.” That turned out well for the WCC, did it not? Maybe now it’ll consider reinvestment in parking buildings. Though I’m not hopeful.

     
  4. greenwelly, 23. October 2020, 16:45

    The council dodged a bullet by selling its car parks, given that the James Smith car parking building is now closed and earthquake stickered.

     
  5. D'Esterre, 23. October 2020, 18:54

    greenwelly: “….the James Smith car parking building is now closed and earthquake stickered.” No guarantee that it’d have been repaired, were WCC still the owner. In fact, WCC’s failure to do anything about the Library suggests that the status of James Smith would be the same as it is now. However. I’m not sure why this would militate against WCC buying one or more of Wilson Parking’s disinvestments. As far as we know, none of them is earthquake-damaged.