An airport at Tarras - local government gone mad?

by Nick Page - Sep 11, 2023

Letter to the editor: Nick Page

I am amazed at the apparent acceptance by many parties of the advancement of the Christchurch International Airport Limited (CIAL) proposal for a new airport at Tarras. This acceptance seemingly includes the support of Christopher Luxon during his recent visit to the area, but is surely surprising considering that there has been absolutely zero meaningful consultation with the residents of the Central Otago and Queenstown Lakes on whether or not an additional airport is required or desired in the region.

Any remotely balanced examination of the current move by CIAL to develop an airport in Tarras can only lead to the conclusion that this is an outstanding example of local government gone mad.

Many years ago a bunch of government ministers invented Council Controlled Trading Organisations - CCTOs - apparently as a way to pay lots of directors and management fees to groups of like-minded individuals, all one assumes in the name of productivity and efficiency. One imagines that they saw CCTOs as organisations that would strip those bloated, inefficient council departments of old back to bare-bones, and ensure they delivered services to councils long suffering ratepayers with ruthless efficiency, at arm’s length from tiresome, meddling, councillors and ratepayers.

A couple of points to note here:

1. They were created to efficiently deliver services to local authority ratepayers
2. They were to be council controlled by those self-same local authorities

Note that they were not called Council Controlled Investment Organisations, nor indeed Council Controlled Gambling Organisations. Not even Council Controlled Development Organisations. Surely as the CCTO name implies, their purpose was clear and simple, to efficiently run council owned local trading organisations.

Now, for many years in Christchurch, there has been a group of these highly paid (and one hopes productive and efficient) individuals who have been given a local council trading organisation to run efficiently. It's a CCTO called Christchurch International Airport Ltd. What does it do? Surprise surprise, it runs Christchurch International Airport. Now running an airport is undoubtedly a complex operation, and could no doubt easily waste large amounts of ratepayers money if not done efficiently. There is no argument that it needs to be run efficiently and clearly deserves a group of very highly paid individuals as directors and senior managers to ensure that is the case. I hope for the sake of the ratepayers of Christchurch that their chosen directors and senior managers have been delivering to their satisfaction.

There are a couple of key items that deserve attention at this point, as they are important to the crux of this issue. The CCTO, CIAL, is majority owned by Christchurch City Council (with central government as a 25 percent minority shareholder) and the key infrastructure trading asset it is in charge of operates in Christchurch. All quite logical, aligned with the key purpose of its CCTOs set down by the council, and clearly not an example of local government gone mad, excluding of course any comment on the quantum paid to its directors and managers. Note that Christchurch City Council states on its website that the key purpose of all its CCTOs is to "invest in and promote the establishment of key infrastructure, for the city”.

Fast forward to 2018, or there abouts.

It seems that some or all of the highly paid directors and managers of CIAL realised that for many reasons post Christchurch earthquake, running CIAL was proving a challenge, and delivering results and justifying their positions was proving increasingly difficult. They had some cash in the bank and an operational airport, but Auckland International Airport Limited (AIAL, but no relation) was proving much better at the "running an airport" game than CIAL. AIAL is not constrained by being a CCTO, it’s a private, profit making company. It's got an airport in Auckland and had snagged a bit of South Island action through a 25 percent shareholding in Queenstown Airport. In fact it was rather hogging the New Zealand air passenger and airfreight market, with by far the largest share of the domestic and international air travellers using Auckland Airport, and it had a nice channel for tourists to the South Island with its Queenstown link.

So it seems that to justify their positions the directors and management team at CIAL decided they needed an idea, preferably a BIG idea, big enough to mask all the other issues that their CCTO had. So how about hanging a great big huge carrot in front of the Christchurch City Council, with the promise of massive future dividends? That could do it!

They called the carrot Tarras Airport.

Don't worry that it's not in Christchurch. Don't worry that it contravenes the key purpose the council sets for its CCTOs. Don't worry that it will soak up CIAL's reserves. Don't worry that it's a completely speculative, very high risk development. Forget all that. Buy some land cheap (reportedly for only double its existing market value), spend tens of millions on management costs and consultants to develop the idea, totally ignore sustainability and climate change, totally ignore the local population. Don't worry that the central government has spent spent billions of dollars on Christchurch's earthquake recovery, the CCTO's home town, and definitely don't ask yourselves if the government has really now funded Christchurch so generously that CIAL has got so much spare cash that's not needed in Christchurch that they can plan to spend hundreds of millions in someone else's back yard?

Promise the 'powers that matter' in council that spending hundreds of millions of dollars of their own and borrowed dollars (inevitably an underestimate) on the big idea should eventually provide a fantastic return to its shareholders. Convince the council that it's not just a big idea, it’s a great idea for them! It might in the future strip badly needed passengers and freight from Christchurch Airport, negatively impact the economy of Christchurch and offset many hard earned post earthquake gains for the city, but the Christchurch City Council need not worry about that; the far distant, massive, speculative gains from Tarras will (may/might/could/will hopefully?) far outweigh any losses to Christchurch.

Ignore that Tarras is 400 kilometres away from Christchurch, the local authority of CIAL.

Ignore that it's not about trading at all, it’s about development and speculative gain, instead of the CCTO's key goal of delivering efficient service and infrastructure to the ratepayers of Christchurch.

Ignore that the local authority and its ratepayers for the Tarras area (Central Otago District Council) are not properly consulted, have no real influence on the airport and that there is no local council input on a major CCTO proposing to operate in its area.

Ignore that growth of international air travel is totally unsustainable from a climate perspective and looks certain to remain so for the foreseeable future.

Ignore that there is no housing in the Otago region either for those that would build or those that would operate an airport, particularly the lower paid majority of the workforce. Maybe CIAL should propose to build a massive carpark first, so that all those extra workers have somewhere comfortable to sleep in their cars?

Ignore that the majority of residents of the Central Otago/Queenstown area already think there is too much tourism.

Ignore all that because no one 'that matters' chooses to see past the Great Big Carrot.

If Central Otago and Queenstown Lakes needs another airport, and it will be unsurprising to you that I am far from convinced that it does, that should be an issue for either the people of that region alone or for central government with the region. It should absolutely not be for a CCTO of a council based hundreds of kilometres away to decide without any meaningful consultation with the people of the region affected.

Critically any consultation and engagement should not be about what constraints or requirements should apply to development of an airport at Tarras by CIAL. The consultation first and foremost must absolutely be about whether or not another airport is required at all. It must happen before more money is wasted by CIAL on detailed planning for an airport that may well never happen. Contrary to even its own early public utterances, a CCTO from Christchurch is now looking to impose an airport decision on the Central Otago/Queenstown Lakes region with absolutely zero consultation on the real issue. Should or should there not be a second jet airport in the Central Otago/Queenstown Lakes region?

If the government believes it is an issue of national significance and believes a new jet airport in the region is justified it should not try and achieve that on the sly, as a minority shareholder in a distant council's CCTO. It should prepare and present a case itself to the people of the region, properly consult those people, and then and only then, if there is found after that process to be sufficient weight of evidence in favour of a new airport, look to proceed.

So please Christchurch (and Wellington), before countless millions more of ratepayers money is wasted call your CCTO to account. Don't be distracted by the Big Carrot. Make them refocus your CCTO's resources on your local region, on investing in and efficiently delivering your local Christchurch services. Stop the madness, make them stop Tarras right now.

The ratepayers of Christchurch, Central Otago and Queenstown Lakes all deserve nothing less.

Tarras Airport business case 'marketing material': academics