Wellington Scoop

Offers they can’t refuse?

by Lindsay Shelton
The Wellington City Council wants us to know that it’s seeking Chinese investors to pay for three of its pet projects.

Consider this council announcement about this week’s official visit to China:

Cr Jo Coughlan, chair of the Economic Growth and Arts Committee, will lead a Wellington business delegation which also includes representatives of the Wellington Regional Economic Development Agency. Cr Coughlan says the visit provides a wide range of opportunities to promote investment opportunities in Wellington and create long term business relationships. We will be discussing opportunities including significant infrastructure projects for Wellington which include a covered concert arena, a convention centre, and the proposed extension to the Wellington International Airport runway,” she says.

When she returns, Cr Coughlan will owe us a report on how the Chinese responded to these three “investment opportunities.” She should also tell us what returns were being offered to the Chinese in return for their money.

But will the Chinese be made aware that as yet there is no business case for extending the runway.

Similarly, they should be warned that there’s no business case for a covered concert arena (and no one has provided any proof that there are enough touring groups to warrant its construction.)

As for the first attempt at a building a convention centre with a considerable annual subsidy from ratepayers, the Chinese should know that this collapsed in mysterious circumstances last year. They should also be given the warning against convention centres most recently sounded by Gordon Campbell in Werewolf::

Born from civic pride and the desperate hope of an economic payoff, these buildings will be competing with each other for a limited global and domestic market for major conferences, to no discernible net benefit to New Zealand. That’s because If a lucky winner does triumph, it will be at the expense of other parts of the country, and while foreign convention /hotel operators skim the cream from public money being used to defray a risk they were plainly unwilling to shoulder themselves….

There’s much more:

The WCC business case document [for the convention centre] perfectly illustrates some of the contradictions involved. Expected direct profits are part of the rationale put forward on one hand to reduce the costs to ratepayers – but simultaneously , the lack of direct profits is put forward in the business case as the rationale for the Council to step up and subsidise the project … Apparently the centre per se will not generate direct profits – to the Council at least – but wider ‘economic activity’ beyond, assuming that this can be measured, and is traceable back to the centre. It looks more like an act of faith. Hardly a watertight justification for a fresh commitment by a city that already owns and operates six performance and conference venues – the Town Hall, Michael Fowler Centre, TSB Arena, Shed 6, St James Theatre and Opera House – some of which will be made expensively redundant by a new convention centre.

Chinese bankers will no doubt be well aware of such cautions, even if Councillor Coughlan and her WREDA colleagues would prefer them to see only “investment opportunities” which will lead to “long-term business relationships.”

Questions must also be asked about the council’s business relationships. Is it working on commission from Infratil, should it bring back $300million to make the runway longer? Which hotel chain is it assisting in its efforts to find investment for a convention centre? Which entrepreneurs would stand to benefit if the city creates yet another performance space, to add to its list of under-used venues? Were these the only three investment proposals that the council-led delegation was promoting?

And what of the credibility of the council and its business efforts? Back in 2012, the mayor and Councillor Coughlan announced a plan to create 10,000 new jobs in Wellington by 2015. Well, it’s now 2015. Time for them to tell us the results of their $2million plan. How many new jobs did the council’s spending create? Was the promised total achieved?

Just as Chinese bankers will be assessing the value of the investment opportunities on offer from the council, similarly Wellington ratepayers need to be able to assess the success, or otherwise, of the council’s job-creation plan. Unless I’ve missed it, the council has so far not provided any final report.


  1. Ian Apperley, 8. September 2015, 10:55

    Why on earth would they want to seek external investment this way when they have a war chest signed off with hundreds of millions of dollars ready to go? It just smacks of more propaganda releases that we have come to expect, certainly as we approach election year. Or are we going to ask the Chinese to build our infrastructure as they have in Vanuatu, Fiji, most of Melanesia, and other island nations?

  2. City Lad, 9. September 2015, 5:57

    When the Mayor and Councillor Coughlan complete the report on their latest junket to China, the difficulty for ratepayers will be to assess how honest and accurate that report is. The old adage: “There’s no such thing as a free lunch” comes to mind.

  3. Polly, 9. September 2015, 8:49

    As well as the six venues owned by the WCC, there’s also Te Papa, and a number of hotels which host conferences. Wellington is not losing out.

  4. southcoaster, 9. September 2015, 17:01

    Very interesting isn’t it? Asking Chinese to invest in the Council’s pet projects without giving them the courtesy of doing a business case first. What will be the outcome of a possible Chinese co-investment to the runway extension? Shares? Infratil selling the airport to the Chinese once they fleeced the public to pay for it? And who is being paid, both by Infratil and the Chinese, to do what? We’ve seen how far the corruption went with the National Party and dirty politics, how far is our gormless Council getting themselves embroiled?

  5. City Lad, 12. September 2015, 21:01

    The City Council (Mayor, councillors and council officials) have no mandate to sell our city to foreigners. And especially Chinese who have no democracy. Heads will roll at our next election. Only 12 months to go.

  6. CC, 13. September 2015, 16:09

    Don’t get too worried about the elected representatives City Lad. The Mayor changes her whims to suit those who fluff up her ego at any given time, then moves on before achieving anything (eg: green initiatives and light rail). Nothing much her sidekick Cr. Coughlan touches ever comes to a satisfactory conclusion, unless wasting ratepayers’ money is counted a success. One can rest assured that overseas investors will have seen through those two long ago. Of greater concern are the property developers who sidled over to Beijing with them. Cheap foreign investment capital and 125 year leases at $1 per year make it likely that more public open space may be destined to disappear. No doubt the CEO is along for the ride so as to spell out how backdoor deals might be done for the developers and investors.