Who are the Guardians of the Bays?
Guardians of the Bays is a broad-based citizens’ group opposed to the proposal to extend the runway at Wellington International Airport (WIAL). We also represent the interests of many other groups, including residents associations, environmental and recreational groups and businesses. We do not believe that the extension will achieve the level of benefits needed to warrant the extensive investment required. We do believe that the social, cultural and environmental costs the extension would impose on Wellington residents and the South Coast and its users are too high. We are not a NIMBY group but include lawyers, politicians, policymakers, business owners, recreational clubs, marine ecologists, health professionals, architects, pilots and aviation professionals and several economists in our midst.
The prospect of Wellington City Council (WCC) having to provide the bulk of the funding is of particular concern when there are more worthy and more urgent long-term funding needs within the city. Resilience to climate change, extreme weather events, earthquakes and tsunamis is just one of them. Option 3 of the cost-benefit analysis by the airport clearly shows that simply investing in making Wellington a more attractive destination would lead to a 1:4 benefit and increase in visitors, without having to extend the runway.
Our city is a place where people already want to live, work and play, and the Council’s focus needs to be on identifying the reasons why they come, and supporting these, rather than funding capital works via multi-generational debt, where the benefits are highly dubious and clearly overly optimistic.
The WCC’s stated goal of making Wellington a vibrant, resilient and low carbon (!) city will attract many more visitors than a longer runway.
Why Extend the Runway?
The Wellington International Airport Limited (WIAL) company has long planned to extend its runway, either to the North or the South. This has been a contentious issue since the inception of the airport in the 1910s and has led to significant clashes with the public in the past. Several previous impact and engineering studies have shown that extending both into Evans Bay, and the Cook Strait are fraught with environmental, social and engineering issues which is why this extension has never gone ahead so far.
The people pushing for the extension are: Wellington International Airport Ltd (WIAL) and its owners Infratil, the Wellington Chamber of Commerce, Wellington Property Council and the Mayor. The proponents say that a longer runway will open up Wellington to long-haul flights and attract more visitors. However, even with the proposed 363m southern extension the runway would still be considered short (2318m) by international standards and would not be within many airlines’ operating criteria. The Pilots Association of NZ has taken the Civil Aviation Authority to the High Court over claims that the too-short runway end safety areas (RESAs) would cause a significant safety hazard for any long-haul flights who would use the extension. WIAL Chairman, Tim Brown said himself:
You could build a new runway and find in five years’ time that there’s an airplane that can land on the [original one] anyway.
Demand for a longer runway
Since 2006, WCC has been spending $200,000 annually to try and attract long-haul flights to Wellington. Yet neither WIAL nor WCC have been able to gain a commitment from any airline to fly long-haul into Wellington – despite the number of benefits that they argue would accrue, including, presumably for the airline. This is concerning given the $1.6 million spent so far to attracting them, which no one seems to know what it has actually been spent on – according to an Official Information Act request, largely for sending WCC staff overseas to schmooze with international airlines – to little avail. More recently, almost $9m of ratepayer money has been used as a subsidy to attract Singapore Airlines – one of the highest-earning airlines on earth – to market the ‘Capital Express Route’ from Wellington – Canberra – Singapore. On top of the public outcry over this subsidy and the WCC CEO’s dubious role in it, the planes from Wellington to Canberra show very low demand for a long-haul route. Continuing to put yet more money into the idea (the $1 million for the discredited economic impact statement and the additional $1.95 million for the resource consent application), notwithstanding the failure to secure a long-haul airline, raises significant alarm bells for the ratepayers and taxpayers (as well as future users of the airport) who will be paying for an extension.
In addition, little thought has been given to how Auckland and Christchurch airports will respond to the threat of competition from an extended runway at Wellington airport. Clearly, given Auckland Airport’s ambitious plans and $1 billion dollar expansion investment, they will be highly proactive in attracting and competing for travelers. In addition, Air New Zealand, with its hub at Auckland Airport, and Qantas will focus strongly on maintaining their share of the market. This has been made abundantly clear by the Board of Airline Representatives (BARNZ) who represent 21 out of the 22 long-haul airlines who fly into New Zealand. They have commissioned an NZIER peer review of the EY economic impact statement and the Sapere Cost-Benefit Analysis which shows that “the risk that the methodology employed by EY overstates benefits while overlooking costs is too great to be ignored.” The Sapere report got mauled even more savagely, including by several independent economists and airline executives.
The CEO of Air New Zealand made the economic folly of this ‘build it and they come’ approach very clear:
It costs $300-400m to get two wide-bodied aircraft to fly a new route, then it costs about $160m a year to run the flights, and you need 200,000 people flying that particular route to fill 80% of the seats every day of the year. It is a really big ask, not just for Air New Zealand but all airlines flying into this country as it is just not economically sustainable to do that. There currently are 12 Wellingtonians that are wanting to go to Singapore every day, which is the biggest Asian hub. Even if we put a direct service from Wellington to Singapore, we might get an (unprecedented!) 3-fold increase in visitors to Singapore, that is only 36 people on a 300-seater and so it just doesn’t add up.
Who is funding this extension?
Funding is a significant issue. There is no design or clear plan available to the public (or WCC) yet, but the cost of the extension has been mooted as a minimum of $300m (in recent publicity, this has been upped to $350m without explanation) and an independent expert sees it as being closer to $500m. Without a clear design or plan, it is difficult to assess the realism of this cost estimate (but see the Guardians of the Bay’s blog on the funding issues). The airport CEO itself has admitted that the extension is ‘not economic’ and that Infratil, the 66% owner of WIAL (the WCC is the other 33% owner) would only pay about 1/3 towards it. Infratil’s CEO went even further, admitting that
“Right now there’s a bit of an information gap both about the economics of the airport, what it costs to build the actual runway itself and if the resource consent imposes any conditions.”
The National Government has come out on several occasions cautioning the realistic (national) economic benefits of this extension and is unlikely to co-fund it. The WCC has, despite significant public and business opposition, included co-funding of $90m into its Long Term Plan, albeit based upon a solid, peer-reviewed, independent business case and cost-benefit analysis plus a committed long-haul airline, plus resource consent (these caveats have only been introduced to the final LTP due to significant opposition from submitters on the Long Term Plan).
What are the likely impacts of this extension?
Only recently have environmental, cultural or social impact reports been provided by WIAL which now need to be peer-reviewed to assess the extent of how the airport extension will affect Wellington. However, there are several factors – never yet mentioned by the proponents of the proposal – that will have obvious large-scale, long-term effects: the historic Moa Point suburb may have to be bought out and razed to the ground as all the proposed building will happen for at least 2, but more likely up to 5 years at night during curfew (a buy-out plan has apparently been approved by the last Board Meeting in July); the Lyall Bay surf break and wider beach use will be severely impacted during construction and likely also during operation; commercial and recreational fishing and iwi cray fisheries will be impacted; the marine reserve which will be impacted by unknown but highly likely to be severe sedimentation and turbidity; a unique and highly ecologically significant marine ecosystem will be destroyed, especially the giant kelp forests that are already under threat of extinction from climate change and the Moa Point beach little blue penguin and critically-endangered reef heron nesting ground; negative impact on tourism from seeing an area widely regarded as Wellington’s taonga destroyed by an unnecessary and visually extremely disruptive development; public health issues by potentially impacting the Moa Point wastewater outflow; transport issues especially during construction when millions of tonnes of clean fill will be trucked in from Horokiwi but also during operation due to increased traffic and bottlenecks – one truck every couple of minutes will rumble through all of Wellington for a minimum of 3 years!; climate change impacts where the airport is already responsible for 25% of Wellington’s emissions and wider resilience considerations etc. The regional council has recently agreed with us that the airport’s reports into the impacts are severely lacking, both in detail and methodology. Over 46 points and questions for more information were raised.
What about the risks and resilience of this infrastructure?
Again, risks have so far been neglected to be mentioned by the proponents of the extension in their many public statements. However, some obvious risks that will need to be addressed during the RMA and business case process are: quite significant risks from earthquakes (the runway sits on a fault line and is entirely reclaimed land thrown up by a major earthquake in the 1400s), tsunamis (it already happened 3 times in the recent past that the Isthmus went under and the airport’s response to the tsunami threat from the recent 7.8 earthquake was appalling) and sea level rises (see Regional Councillor Paul Bruce’s recent article); increased storm events (storm surges led to closure of Moa Point Road 5 times in 2 months in 2015) and other climate change impacts including inundation of both main access roads from sea level rises; fuel prices; the high exchange rate; global economic recessions; global changes in tourism and long-haul flying (see Tourism NZ Tourism 2025 report); re-insurers having Wellington as the city most likely to be catastrophically destroyed by an earthquake thus reducing the likelihood for getting long-term insurance for at-risk assets; reduction in value due to destruction of the South Coast fisheries and its recreational value; sewerage plant operation impacts including that the runway will go over the current sewerage outfall pipe etc.
The recent storms in particular have shown the vulnerability of this low-lying area to natural events and the Cook Strait. Costs to the community and the WCC have already been huge by recent extreme weather and earthquake events, yet none of these issues are mentioned in relation to the runway extension, nor has there been a resilience plan provided by the airport or the Council. The airport is specifically mentioned as being in a vulnerable spot by research on sea-level rises and tsunamis, particularly from Cook Strait underwater land slips. What are the chances that an airport in this environment will still be viable by 2060, which is by when we can finally expect to see any economic pay-back based on the most optimistic accounts?
What are the likely costs and benefits, really?
The proponents’ side: The proponents claim, based on the EY economic impact statement, that for every $1 invested in extending the runway there will be up to $5 [Ed: now $7 in Sapere’s report] in direct economic returns for New Zealand, which includes $684m in economic benefits for the Wellington Region over forty years (to 2060). It also claims to double the economic value of international students to $5b by 2025 and that 65% of the world’s population would then potentially come to Wellington. It also says that fewer overall flights will reduce journey time and cost thus lessening the impact on the environment [Ed; but the InterVISTAS report says passenger numbers will increase to 16.1m and the Airport’s own advertising shows at least 10 extra long-haul flights a week]. The Wellington Chamber of Commerce was often quoted as a main supporter as its clients allegedly have noted the extension to be ‘the number one necessity for economic growth to occur in Wellington’. The Property Council, Richard Taylor, Deloittes and Victoria University have also come out in support of the extension, albeit with rather superficial statements that belie a deeper understanding of the issue.
The opponents’ side: Many of the claimed numbers are spin, mis-representations, bad analysis or outright lies. For example, when the numbers of the Chambers of Commerce survey is actually analysed, it is only the 5th most important issue mentioned by only 36 businesses in the Wellington Region (17%) as a top impediment to growth.
The EY economic impact statement has since been discredited by Patrick Smellie, a respected business journalist; Keith Johnson, a transport economist; Ian Apperley, a blogger and business consulant; and most importantly, by BARNZ who commissioned a peer review by the independent NZ Institute of Economic Research (NZIER); as well as several Councillors (eg Sarah Free, David Lee and Helene Ritchie). Other renowned economists, such as Michael Reddell, Dave Armstrong and Keith Johnson and Bernard Hickey have all argued that WIAL should pay for it themselves if it was indeed such a great business case. Even the proponents of the plan, eg the Wellington Chamber of Commerce and the Mayor Justin Lester, have since been careful to note that they would only support such a plan if there was an independent, peer-reviewed business case, a committed long-haul airline and resource consent granted. The airport, however, seems to think it won’t need to undertake such a business case or cost-benefit analysis anytime soon (according to Steve Sanderson, WIAL CEO on his submission to LTP):
As the project develops into a reality, more detailed cost benefit analysis is inevitable, however for the purposes of the consenting phases of this project are not necessary.
Nor will there apparently be any public commitment from a long-haul airline before the runway is being built:
Given that the extension is 5 years away from possible completion these arrangements cannot yet be confirmed and it should not come as a surprise that formal airline commitment has not been publicised.
Resource consenting is also an obvious issue. WIAL has stated that it would hold public submissions during the latter part of 2015 and was hoping to get resource consent by 2016. The WCC is obviously conflicted as it owns 33% of the Airport shares and the Mayor sits on the WIAL board and refuses to meet with the most significantly affected residents about their concerns due to her ‘conflict of interest’. WIAL initially decided, after taking money from the WCC towards resource consent applications, that it would go for a board of inquiry process with the EPA to fast-track the proposal as a project of national signficance. However, Simon Bridges has publicly mused that this project was not one of national significance, with John Key calling it a ‘White Elephant’. They have since retracted, which is an admittance that they think their case isn not strong and will now go through an Environment Court process. The way that the WCC LTP consultations on this issue have been undertaken was seriously critcised and regarded as bordering on illegal under the Local Government Act (particularly Section 93B). Questions were also raised about whether the Mayor and Deputy Mayor fulfilled their own code of conduct in relation to giving at least the appearance of open-mindedness and independence during a public consultation process. And what is particularly interesting, is that Infratil CEO Tim Brown admitted that:
A few years ago Wellington Airport management responded to a query from Wellington City Council with regards to the barriers to long-haul air services. Management identified that the problem was that long-haul required a longer runway which could cost about $300 million. The problem with this was that if people and aircraft that didn’t need the longer runway weren’t to subsidise it, i.e. if only the aircraft that benefited from it paid a charge for using it, then the additional traffic was expected to be worth $50-100 million (present value) to the Airport. As a commercial business the Airport Company could not justify investing $300 million into an asset that would be worth perhaps $100 million.
This could have been the end of the conversation, but Council immediately indicated that it was willing to consider funding a part of the cost (because of the benefit the extra air traffic would generate for Wellington) and to put its money where its mouth was, it was willing to contribute to the investigation and consenting of the project.
Adding some complexity to the process, Council has indicated that its funding is unlikely to get the project over the line (if it turns out to have a good business and economic case and it gets consented). This resulted in a conversation with Government where we were effectively told “come back to us once you have a deal”.
In essence this is not a Wellington Airport (or Infratil) instigated project. It is very much a partnership which got started at the City’s request. [italics by Ed]
Where does this leave us?
We, and the most severely affected residents at Moa Point have now been consulted, somewhat, by the airport on the next steps, which are leading us to court in 2017. However, we still find out about important presentations and meetings of WIAL with the Council after the fact from the media. It is galling that the airport told the Dom Post that they ‘were working closely with Moa Point residents’ and even said: “We’ve made a huge effort to have these meetings and to make sure that dialogue goes both ways.” What the airport has done, is offer a solatium and buy-out package to all of Moa Point, claiming that it was trying to be ‘good neighbours’ when a lawyer rightly called it what it was, namely a PR exercise meant to put the residents firmly in the spotlight as ‘greedy NIMBYs’.
The process has not been transparent enough, though it is getting better but there is little trust left between WIAL, WCC and the affected residents. We now have some caveats in the Long Term Plan that clearly show the onus is on the airport to provide all the information, and a commitment from a long-haul airline before any more ratepayer money will be spent on this project. We will continue to try and keep the Council and Airport honest, so they fulfill their due diligence and mandate to Wellington’s residents. We now have the direct referral to the Environment Court with a court date set in mid June 2017. 2/3 of all initial submissions (out of almost 800) were opposed and 3/4 of the s274 submitters that will be heard in court are also opposed. This proves that the airport and Mayor’s repeated statements that ‘most Wellingtonians are for this extension’ are not true, or they would have submitted. In order to pay for the large amount of legal and expert work that is required to fight this in court, we need your help. We have set up a fundraising site and am gathering a lot of pro bono support as well as sharing resources with other opposed groups. Please sign up to this blog, like us on facebook and share our posts.
If you would like more information or to get involved, please email us at firstname.lastname@example.org