What exactly is happening with the Council funding the airport runway extension?


Some interesting developments have recently happened in the runway extension saga and we are going to have to start asking some serious questions about the Council’s involvement with the airport. Not just the conflict of our Mayor being a Director on the airport board and behaving as such a Director would, including doing everything in her power to sell the white elephant of the extension to the residents who’ll have to pay for it. She even said that the ‘planes raining out of the sky’ with the new Jetstar route was a great reason to extend. This seems quite a stretch, because if you look at it, Jetstar is only flying to/from Nelson from Wellington. And we already have flights to/from Nelson. Even if we’d get say, that elusive flight to China (which Christchurch just seems to have nabbed as the much better choice to move a long-haul airline operation to!), the argument that it will mean folks from Nelson will now over-run Wellington airport to get to, say, Ghuangzou is pretty simplistic. Air NZ will just drop their fares from Nelson to Auckland to be the same as to Wellington. Voila! Instead of just Ghuangzou you’ll get access to all the 65 international routes flying out of Auckland, for the same price! And, you’ll get to fly with Star Alliance which is the most preferred frequent flyer alliance for Kiwis. Adding a stop-over from Nelson also contradicts the arguments that we need this extension to get one-stop flights to Asia.

But there are other questions. Apparently, the City Council just made a $1.8m surplus, which is partly offset by a $2m dividend that came in from the airport shares. It will be interesting to find out how much of that money did in fact come from the shares because the Council promised to return $1.95m straight back to the airport to further the resource consent for the runway extension! So, either they only got $50,000 from the airport dividends or they are fibbing/double counting their numbers.

What is also very interesting is that the airport has spent almost $2.8m to date on their resource consent reports. Half of this was co-funded by us, the ratepayers. Now they want to spend at least another $3m or thereabouts on the EPA board of inquiry process, which is a way of fast-tracking the consent and making it harder for us community groups to fight it. However, the $1.75m that the airport estimates the board of inquiry to cost, is apparently to be met solely by the applicant (see this table on page 6).

WIAL EPA board of inquiry costs
WIAL EPA board of inquiry costs

Now the Council can’t be, and isn’t, an applicant so it would seem it can’t co-fund the EPA process. Yet it only paid $1.4m towards half of the report costs so far which means another $1.55m are earmarked for the EPA process, ie half of the total costs. Is the Council thus paying to lodge the consent? Or WIAL’s experts? Or did the Council solely pay for all the report costs? Or is the $2m airport dividend actually going back towards its surplus and the Council will not be further financially involved in the board of inquiry process?

It shouldn’t be this difficult to understand how this alliance is built and how it will affect us ratepayers. Most of us had massive rate rises thanks to the Council’s ‘big ideas’ of which the runway extension is the biggest. Apparently, the Council’s officers are also being asked to find ‘service efficiencies’ (ie cuts) where they can in order to fund projects such as this. So, our rates went up and our services went down. And the Mayor is allegedly flying to China trying to woo another airline. Perhaps this would be more palatable if the Council hadn’t already spent $1.6m in a ‘Long-Haul Attraction Fund’ since 2006 which was given as a grant to Wellington Tourism and the airport. It was spent on “supporting work on attending the international routes conferences where all the long haul carriers are represented”. The outcome to date is zero long-haul airlines coming to Wellington, but a lot of people went to a lot of fancy conferences, all on our ratepayers’ dimes.

We don’t know about you, but this whole business is really starting to stink. Our Mayor is behaving like her main job is as WIAL Director and our money is thrown at this company as if it’s going out of business (which it just may if stinkers like this keep getting mis-managed by Infratil). This Council has not insisted on a proper business case before spending all this money on the airport. They are doing a business case for cycling and bus-rapid transit so why don’t they insist on one before paying towards a resource consent for the airport? They’ll spend $6m+ of our money on a resource consent and a couple more on flying people to fancy conferences and then it will be claimed that too much money has been spent already to not push this project on further. Just read this quote from the report where the airport asked the Council for more money. It is obviously strong-arming them, as they know a business case just won’t stack up:

 A third option open to Council is to decline the request from WIAL and provide no additional funding. This would require WIAL to meet $4.9 million of the total estimated costs compared to Council’s contribution of $1 million [which the original contract stated was the absolute maximum Council contribution – Ed].

Should Council decline the request from WIAL, it would send a strong signal to WIAL (and Central Government) that Council is not committed to this process. It is likely that WIAL would not continue with the consenting process without Council agreeing to be a funding partner. WIAL state that they cannot fund the runway extension without public funding support and they would be reluctant to continue to invest in the RMA approval process without a strong commitment from Council.