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Left and right leaning Christchurch councillors square off over asset sales

Author
NZ Herald ,
Publish Date
Fri, 9 Dec 2022, 8:58am
Lyttelton Port Company Ltd is 100 per cent owned by the Christchurch City Council. Photo / AP Mark Baker
Lyttelton Port Company Ltd is 100 per cent owned by the Christchurch City Council. Photo / AP Mark Baker

Left and right leaning Christchurch councillors square off over asset sales

Author
NZ Herald ,
Publish Date
Fri, 9 Dec 2022, 8:58am

Left and right-leaning city councillors have butted heads over the looming issue of whether city council-owned assets like Christchurch Airport and the Lyttelton Port Company could be sold off.

Christchurch city councillors were yesterday asked to vote on a number of matters involving a strategic review into Christchurch City Holdings Ltd.

The Northington Partners report looked into CCHL, an investment company owned by the city council, and recommended ways for it to perform better.

Christchurch mayor and city councillors. Photo / CCC

Christchurch mayor and city councillors. Photo / CCC

Through CCHL, the city council owns 75 per cent of Christchurch International Airport Ltd, 89 per cent of Orion NZ Ltd, and 100 per cent of Lyttelton Port Company Ltd, Citycare Group Ltd, Enable Services Ltd and Eco Central Ltd.

Yesterday’s debate over assets will be the first of many as city councillors grapple with a projected rates rise of between 8.9 and 14.6 per cent.

Selling off, or partially selling off, assets to ease the burden on ratepayers is gaining momentum.

Left-leaning The People’s Choice city councillors have for many years opposed any sales, preferring to keep them in city council hands.

There are six People’s Choice councillors, and seven independents including Mayor Phil Mauger.

Some of those are right-leaning with links to the National Party who are in favour of selling off assets to private investors.

The assets are valued at $3.3 billion.

CCHL has paid more than $1.9 billion in capital returns and dividends to the city council.

Northington recommended rebalancing and reusing city council-owned assets; to take on a hybrid approach. It means introducing co-investors into some assets and that new capital is to go into other assets or to be sent to the city council to reduce debt or otherwise.

Rates were projected to rise 70 per cent over the next nine years.

Christchurch’s average household rates were already much higher than other major New Zealand cities.

City councillors voted yesterday to receive the Northington report and if they would further investigate any of the recommendations made by the review.

This idea of a hybrid approach which encouraged selling council assets divided councillors.

Said deputy mayor and People’s Choice councillor Pauline Cotter: “To support this approach today is taking us down the path of selling assets which have served us so well.

“There are some with dollar signs flashing in their eyes, thinking that CCHL will suddenly be overflowing with cash as a result, but be very careful, it could simply be fools gold.”

But right-leaning Independent Citizens councillor Sam McDonald said he did not think there was an appetite for wholesale asset sales.

“I include myself in that but I think what we need to do is have a strategic conversation and say, are we getting the best bang for our buck for our ratepayers now and in 30 years.”

People’s Choice councillors made it clear the hybrid model was selling assets.

Many labelled the income that would come out of it as a “short-term sugar hit” that might fix debt now but leave them high and dry down the line.

“We would have to liquidate quite a lot of our portfolio to have any increase on rate risers, then once we’d done that we’d have precisely zero levers to pull when the next shock happens,” councillor Tyrone Fields said.

Fields said councillors were being rushed into a decision.

Councillor Yani Johanson agreed and said it was “ludicrous” that they were discussing the late-ticket item.

 “It doesn’t seem right that we are rushing this through.”

Fields tried to get the decision tabled but his motion was lost 9-7.

Right-leaning independent candidates were adamant that this was not asset sales but a way to invest in the future of Christchurch and that they were not being rushed as it was only a decision to do further investigation.

Councillor Aaron Keown said he hoped the report would “lead us to more silver, or the silver turning into gold in our little nest of nest eggs to carry us forward”.

“To not look at our options is to be asleep at the wheel. Wake up people, the world’s changing and our opportunities are right in front of us.”

Councillors first voted to receive the report which was carried.

Ten, including mayor Phil Mauger, then voted in favour of investigating the hybrid approach recommendation further; seven were against it.

They voted on other various other recommendations, such as to maintain CCHL as an independent non-political buffer between council and its commercial companies and to acknowledge there needed to be better engagement with stakeholders and aligned partners like Ngāi Tahu.

The vote was just to move the process on to the next stage, whether further investigation would be done into council’s options.

No definitive decision on assets would be made for about 18 months, and after extensive public consultation.

Said Mauger: “We’re not putting a for sale sign up tomorrow.”

Starnews.co.nz

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