REBLOG: Strathmore Park: Infratil getting testy over Wellington airport extension questions


Infratil are getting increasingly testy over the questions now being asked by many around the viability of the Wellington Airport Extension and the perception of a corporate handout. In an post on David Farrar’s Kiwiblog, they level their guns at David Lee and Cameron Slater of WhaleOil.

In Sense from a Green Councillor, David Farrar questions the financial burden that will rest on ratepayers based on widely available public information. The airport has said that it won’t stump up their share of the cash and that it doesn’t make economic sense for them to do so.

David Farrar likens it to Corporate Welfare, and I agree. It is an interesting turn of events when a centre-right, high-profile commentator, like David agrees with a centre-left Councillor.

And it’s not just him. Cameron Slater has this year also commented on it in far, far stronger terms. In a piece titled So let’s extend an already dodgy runway and hope planes will comehe says:

There is no valid business case for long haul carriers to fly to Wellington…everything tourists want to see is either further south, or further north. Far better to fly into Christchurch or Auckland to be closer to Queenstown and Rotorua…there are no redeeming tourist destinations that can be easily accessed via Wellington.

Infratil’s response comes out swinging on David’s Blog:

David Lee’s article in today’s Dominion Post and the commentary attached to quotes from the article in the whaleoil blog are a mixture of platitudes, inaccuracies and comments that can only cause concern about the writers’ credulity.

Now I want you to read the definition of credulity:

Credulity is a state of willingness to believe in one or many people or things in the absence of reasonable proof or knowledge. Credulity is not simply a belief in something that may be false. The subject of the belief may even be correct, but a credulous person will believe it without good evidence.

There is some sweet irony in this when we consider that the airport and WCC have actively campaigned for this airport extension without any evidence that it will be beneficial. 

Exhibit A.

On that website, and others run by the Council, they have already decided that the benefits are awesome, amazing, and worth it. There is no balance and no mention of the fact there is no business case that backs it up.

Credulity indeed.

The response to the Blog slams Farrier and Cameron Slater, and by inference, those who are asking questions about the amount of money that ratepayers may require to stump up. I encourage you to read their response, I’m not going to post it all here again, I do want to take some of their statements. So read the full response for context please.

As to how much funding will be sought from the likely providers, absolutely nothing has yet been identified.

And then;

The Airport has indicated that it expects to contribute a sum to reflect the commercial value of the extra services/traffic generated by the extension. Amounts of $50-100 million have been mentioned as the likely range for this value, but until the business case is fully formed and modelled, no one knows.

So it is likely the airport will only pay for 1/6th to 1/3rd of the construction despite owning 2/3rds of the airport.

Once this exercise is concluded the various parties that have been identified as potential capital providers (Airport, Council, Government) will be approached to provide the construction funding.

Government has been unequivocal about what is required to get their money. A Better Business Case via Treasury. Now, we don’t know what format the business case will take, but if it is not in that form, then Government won’t pay a cent.

Perhaps the Councillor missed the presentation made last week on the topic of likely routes. The key point of the presentation from InterVistas (the world’s leading experts on airline route economics and demand) was that long-haul routes to Wellington will link Wellington to a hub; Singapore, KL, HK, LA, one of the Emirates.

And the key point that Infratil have not told us is that InterVistas is a lobby group and the perception is that they are not unbiased.

The article quotes at length representatives of the current airline users of the Airport who are opposed to its extension. Ask yourself, is their opposition to the extension (and their funding of opposition initiatives) based on their generous concern about Wellington or a desire to limit competition?

This is a spin angle the airport and it’s extension supporters keep raising. It’s nonsense. Auckland is long-haul and competition is not an issue. Why would BARNZ, with 22 airlines, not one or two, but 22, say this was a silly idea?

As for competition, holy monopoly Batman. The airport profits are basically kept in check by the Commerce Commission.

This project is a long long away from its final form. It can only happen if it gets the backing of private and public capital providers. This is uncommon in New Zealand and clearly there is plenty of discomfort with the prospect of “socialise costs, privatise profits”.

Well, that’s not quite true. Is it Infratil. In the NBR today, behind the paywall, Infratil have said that they have a $1 billion dollar war chest. If they think it is such a great idea, then why won’t they come out and say that they will pay two-thirds?

It does smell like a corporate handout when you look at that fact. Infratil could afford to pay for all of it.

I find it rich that Infratil is now publicly attacking commentators who are asking very valid questions about use of public money when they have actively promoted this as the panacea to all of Wellington’s Economic woes without any business case.

That would be the pot calling the kettle black?

As for having a go at Cameron Slater. Wow. Those of us who have been around for a while know how that will end.