News from Taxpayers Union
If Greater Wellington Regional Council’s Chairman Chris Laidlaw is to be believed and the Council is talking to the Government about a taxpayer-funded bailout as a result of earthquake damage to CentrePort and its property developments, the Government should be moving to appoint commissioners to take over from the Councillors.
Responding to Mr Laidlaw’s comments in a DomPost report , Jordan Williams, Executive Director of the Taxpayers’ Union says, “Councillors were warned in 2012 that the Council’s debt guarantee of up to $150 million of CentrePort’s borrowings amounted to a subsidy for risky property development. I was in the room when they were warned it could come back and bite ratepayers. It appears that risk has now criticised. Who knew GWRC was in such a bad state it is now sugesting taxpayers may need to bail them out.”
“Chris Laidlaw voted to allow ratepayers’ money to be risked on these property developments which should never have been a role for the Council in the first place. He was warned that the Port lacked the expertise to develop commercial property and that the Council’s guarantee of the debt meant it was all fueled on cheap borrowing. Mr Laidlaw needs to take some responsibility for the situation.”
“Much attention has been given to CentrePort’s damaged container wharf, but that’s not where the real financial hit is. Mr Laidlaw’s comments will add fuel to the rumors circulating Wellington that major design flaws in CentrePort’s investment properties are the reason for such extensive damage. CentrePort knows that no insurance company will pay out for buildings which had hidden defects in the first place.”
“Take the Statistics building – there is absolutely no excuse for a structure only 11 years old to have floors fail in a quake this size. Instead of a strategic asset, it’s now a liability for ratepayers.”
“To make matters worse, we understand from a Council insider that CentrePort has entered complex financial instruments with ACC’s investment fund which mean ratepayers may still need to make payments even if the properties are wrecked and untenable.”
“This is the nightmare scenario for Greater Wellington ratepayers, and its time someone explained how this happened,” concludes Mr Williams.