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WCC decides not to sell its share of Wellington Airport

Wellington.Scoop
A committee of the Wellington City Council voted today not to sell the council’s share of Wellington Airport.

The vote was reported by the DomPost, which said it was to have been held in secret, but became visible after an 8-7 vote to open the finance and performance committee meeting to the public.

The DomPost’s Joel MacManus said there were only four votes to sell the council’s 34 per share of the airport: Andy Foster, Jenny Condie, Sean Rush, and Liz Kelly.

The decision was made after staff asked councillors to review the council’s investments, and said the portfolio lacked diversification, was geographically concentrated, exposed to climate change and natural hazards, and did not align with some of the council’s strategic objectives.

As reports on Wellington.Scoop have frequently pointed out, the airport’s expansion plans do not fit with the council’s climate change targets.

18 comments:

  1. Fleur Fitzsimons, 21. October 2021, 16:14

    Very pleased Councillors across the political spectrum voted against selling our airport today! Asset sales are so 90s. I do not support the privatisation of Council assets. The Mayor and some of my colleagues clearly disagree. But it disappoints me that we would even contemplate a serious matter like this in such a flippant way, or that we accept this kind of ideological ambush. [via twitter]

     
  2. greenwelly, 21. October 2021, 16:38

    “The decision was made after staff asked councillors to review the council’s investments, and said the portfolio lacked diversification, was geographically concentrated, exposed to climate change and natural hazards, and did not align with some of the council’s strategic objectives.”

    Consider that for a while, “Staff asked councillors to review its investments…
    Great to see democracy is alive and well….

     
  3. Ian Apperley, 21. October 2021, 16:52

    Oh man. Opportunity missed. It’s an albatross. You’ll be propping it up in two years with more rates rises Wellington.

     
  4. Benoit, 21. October 2021, 17:13

    Not selling will enable the council to say clearly if it is in favour or against mixing jets and poor people. Fleur, do you support the expansion of the airport over the golf course?

     
  5. Brian Dawson, 21. October 2021, 17:32

    I’m pleased our councillors have rejected selling their airport shares but I feel they need to be reminded that the airport (as opposed to council’s shares) is already a limited liability company and not a public asset. [via twitter]

     
  6. GotB, 21. October 2021, 18:08

    The REAL issue is that the WgtnCC has two reps on Wellington Airport’s board who voted YES during a climate crisis and pandemic to plans to expand the airport over a historical buffer that protects poor people from noise and pollution. WCC has a 33% stake in airport. Use it to say “Enough”! [via twitter]

     
  7. Ray Chung, 21. October 2021, 20:16

    Who’s Liz Kelly? [Former Porirua Deputy Mayor Liz Kelly was appointed in June as the Ngāti Toa Rangatira representative to sit on Wellington City Council committees and subcommittees. Today’s meeting was a committee meeting.]

     
  8. Fleur Fitzsimons, 21. October 2021, 21:50

    Comments, ex Twitter, have been removed.

     
  9. Andy Foster, 21. October 2021, 22:09

    A crucial missing fact here is that the vote today was not to sell or not, but just whether to task officers with preparing to consult on whether or not to sell Council’s 34% share in the Airport. The majority of Councillors have voted not to consult on sale. The second crucial missing fact is that if, after consultation, and subject to a satisfactory sale price (etc) the shareholding had been sold, the complementary part of the proposal was to use the funds generated – not for spending – but to create a diversified income earning portfolio. So the proposal was asset sale coupled with asset purchase – which clearly from today’s debate, and despite an earlier workshop, not all councillors had fully grasped. (There were some interesting comments about how to ‘spend’ any sale proceeds) In that it is also different to most asset sale proposals.

    Income earning is really important because dividend streams from the airport have helped offset around 4% of rates in recent years so achieving that level of return would be important, and perfectly achievable by a well managed portfolio (using external professionals as we all do with for example our Kiwisaver portfolios).

    The key issue that officers put before us was that there are risks in having ‘all your eggs in one basket’. We are seeing those risks played out right now – Covid has wiped out the Airport dividend for at least two years, and that has directly affected all of our rates. The other more substantive concern is environmental – what impact – if any will climate change have on aviation demand ? That’s a regular topic on Wellington.Scoop. As a 34% shareholder this is a risk whether it is realised or not for Council and ratepayers alike.

    There are regularly complaints in Wellington.Scoop comments about plans for airport expansion – driven of course by demand by Wellingtonians and others for flying. The issue here is that you cannot want to constrain the airport’s growth to meet growing community demand if you do not at the same time wish to reduce the value of the Council/ratepayer shareholding. Anyone wishing to limit the airport commercially wouldn’t rationally want to continue being a shareholder – and the reverse is equally true.

    Finally it is very surprising that some people, especially those most intimately involved with the Long Term Plan, are surprised by this paper. The Long Term Plan consultation document explicitly included a section on ‘Further Divestment Opportunities’ which said ‘Where we have assets that could realise more value we can look at divesting these assets and use the proceeds to off-set borrowings or reinvest in assets with a better financial return… Assets that may represent an opportunity for Council include —- (first asset mentioned) our shares in Wellington International Airport (etc).” This was a pragmatic look at whether we are better to own 34% of the airport or a mixed portfolio of investments. So the issue of examining portfolio reconfiguration is off the table for now, so our community will not get a say at this point.

    Ian Apperley – nice to hear from you. I hope in this case you are wrong.

     
  10. Ian Apperley, 22. October 2021, 7:11

    Hi Andy, so do I … I think in a post COVID world, with climate change, environmental issues, and a landlocked airport, the likelihood of WIAL being a good ongoing investment is low.

    And thanks for your thoughts, I concur; when your investment portfolio has a significant weakness, dropping parts of it in lieu of investing in more sustainable assets seems very wise.

     
  11. aom, 22. October 2021, 9:01

    It seems like the old story – divest to the mates when the value is least, then pay exorbitant sums to ticket clippers for services in the future. Good one guys! Good to know that neoliberalism is still the name of the game and that the wealthy will be able to extract more ‘benefits for the shareholders’. In this case, no doubt a condition of sale will be that a runway extension will be pre-approved at the expense of the ratepayers.

     
  12. Concerned Wellingtonian, 22. October 2021, 9:34

    Andy, it is plain awful that the item was put on the Agenda for Public-Excluded. This meant that the papers were NOT made available to the public until very late on the day when they were debated. No wonder that you are trying to explain them now.

     
  13. Benoit, 22. October 2021, 10:13

    Wellington, at next year’s election, you need to choose: will you vote for a Mayor and Councillors who support the Airport’s sabotage of your efforts to reduce emissions, or choose a Council that finally aligns its climate emergency declaration and its acts?

     
  14. Pseudopanax, 22. October 2021, 10:30

    It’s about 25 years too late to protest against privatisation of the airport. With a minority shareholding, the Council gets a nice tickle of a dividend but no voting power and an obvious conflict of interest. Hence hardly a peep from our elected representatives when Infratil put the interest of shareholders ahead of residents. Profit from car parks over Public Transport. Land put aside by previous generations for education and recreation of citizens is handed over to a rapacious corporation ignoring protests from neighbouring communities. An ongoing house purchase policy gets a quiet nod of approval in a housing ‘crisis’.

     
  15. Laurie Foon, 22. October 2021, 12:37

    In my view this council has not acted like a good partner to Wellington Airport. This decision means we can build a stronger relationship and working together on our challenges! This includes our share of $$$ for much needed infrastructure upgrades! [via twitter]

     
  16. Claire, 22. October 2021, 17:56

    Half of the Miramar golf course should be housing by now. And the 45 members of the Mornington course should be accommodated at Miramar. The use of that land for golf is ridiculous. WCC for goodness sake zone it for housing. This would cause less disruption than some of the other inappropriate zoning for big buildings.

     
  17. aom, 23. October 2021, 10:04

    Do you mean that a somewhat exclusive golf club with expensive fees should accommodate the hoi polloi to facilitate the removal of land from the supposedly protected Town Belt?

     
  18. David Bentley, 16. November 2021, 5:35

    I’m very surprised to read the negative comments about the airport here. It is profitable, even now, as are other New Zealand airports.
    “Asset sales are so 90s”? Dream on, without them some are going to struggle, elsewhere. One here in Europe has just gone into receivership. But not yours. I won’t bore you with the reasons for that but I reckon if the council did sell, Infratil would have that remaining 33% in no time and your city would be all the poorer for it. Be careful of what you wish for.