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$90m runway commitment, but no council decision and no business case

by Helene Ritchie
As the former Chair of the Airport Authority for eight years, and chair of all New Zealand Airport Authorities for five, I have followed the discussion on the airport runway extension with interest. In an endeavor to be helpful, here are a few perhaps disturbing facts, relating to costs and Council decisions (or lack of them) which the public may not be aware of.

As has been stated, there has been no business case (or any detailed design) or subsequent costings for a proposed airport runway extension; so there is no accuracy regarding the purported $300 million cost.

1. May 2013
The Council was advised in a paper by staff that “the overall cost of extending the runway will be significant and Wellington International Airport Ltd identify that as a purely airport investment the business case would not be viable without support from central and/or local government….” In other words: significant ratepayer funding of this private company.

2. May 2013.
The Council passed a resolution to support the resource consent application up to $1million with the condition that ……”any costs beyond this will be met by Wellington International Airport Limited,” and stated in the decision, … “there is no commitment from Council towards funding any runway extension.”

3. 17 December 2014.
The Council made a decision to contribute a further $1.95million to WIAL for the resource consent process…and repeated in this decision… “no commitment from Council towards funding any runway extension.”

4. March 2015
Yet only three months later, the Council’s Ten Year Plan stated an “assumption that Council would contribute $90 million towards the runway extension.”

5. But there has been no specific Council resolution to that effect, or officer advice in a specific paper. According to a staff adviser when I questioned by email, he replied: “There has not been a paper specifically presented to Councillors about the amount of funding for the airport extension as there has not been a business case presented to Wellington City Council at this stage.”

6. In other words $90 million just “popped up” and was “popped” into the Long Term Plan

7. The Ten Year Plan also shows a total $32,500,650 operating (OPEX) (not CAPEX) expenditure on the airport extension.

8. I am advised that “it is assumed this will … fund the equivalent of the repayment of $90million principal and interest”!

9. It is not at all clear where the $90million figure in the Ten Year plan came from. Nobody knows!

10. 17 April 2015
In a published media report, the Property Council says “it is pleasing to note Wellington City Council commit $90 million in its draft 10 year project plan…..” And the report quotes the deputy mayor as saying …”the numbers were (i.e. are) sound..”

I find it highly inappropriate that there is an assumption of a $90million (commitment) in the draft Ten Year Plan. despite the fact that the Wellington City Council has made no decision to fund the airport extension, and has had no specific paper on funding the airport extension, This is one reason why I wrote the article “Red flag warning about long-term spending plan” when the draft plan was released for consultation.

Helene Ritchie is a Wellington city councillor.