Wellington Scoop

Is Wellington for sale? Five council organisations into one private company

by Ian Apperley
It is my opinion that Kevin Lavery and some of the city council leadership team have an agenda for privatising and commercialising city assets that they are determined to push in an opaque and autocratic way.

Let’s take a look at WREDA for example – the Wellington Regional Economic Development Agency that was launched with great fanfare last year and has since disappeared off the radar. Its role is to replace five Council-Controlled Organisations: Grow, Positively, Destination, Venues, and Major Events.

So here is the interesting thing. It is a private company with a board of nine directors. Here you see the fingerprints not only of outsourcing and privatising city assets, but also commercialisation. It is owned 80 per cent by the Wellington City Council and 20 per cent by the Regional Council.

Why privatise Council-Owned Assets? It fits Kevin Lavery’s agenda in my opinion, but it also means that the transparent rules around government do not apply. Official information requests are much more limited under a private company, if not non-existent. We can’t see how private projects are funded.

What will be interesting is this: if WREDA is being funded by the WCC, and it is a private company, then how are city services awarded to them?

In any other commercial arrangements, tendering and probity are well set down disciplines. If WREDA is a private company delivering services, then shouldn’t it be subject to the same rules as all private companies? That being not a position of a monopoly but a competitor? Could other companies provide the same or better services than WREDA?

The Council’s long-term plan is being cleverly pitched by experts who provide the rosy upside of the ideas in a choreographed way. For example, the Airport Extension idea refers to “$389m – $684m potential benefits to [the] Wellington region.” Buried in that report is the fact that it would take decades. The report suffers from terrible optimism bias.

There is no conversation about the fact that the Wellington City Council is paying the airport company well above what it initially agreed, which was $1m. That is now potentially extended to $6.5m and rising, while Infratil has consistently dropped the amount of money it wants to invest, and central government has said “no”. In fact, Infratil has said it makes no economic sense for them to invest the level of capital they should be, by company ratio.

Is the airport extension worth it? I don’t know. What I do know is that ratepayers are being asked to pay for a disproportionate amount, in the hope it will spark some kind of economic boom. But it won’t. Because the long-term plan also says that over the next decade our rates are likely to increase by 50%.

We are being asked, again, to submit our views on things like the airport extension, and yet, when you dig into official information request documents, that investment would appear to be a fait-a-compli.

The real question I am asking has to be: Is Wellington for Sale?

Why do I care? I’ve been part of this community for four decades. My great-grandfather helped build the city and the airport. I have roots here and I will be damned if I don’t say what I think. Right or wrong. It’s all about transparency for me.

This is an extract from an article published yesterday on Ian Apperley’s Strathmore Park blog. The full article can be read here.

Ian Apperley can be contacted at ianapperley@protonmail.ch