Christchurch Airport puts brakes on Tarras airport plans

Controversial plans by Christchurch Airport to build an international airport in rural Tarras in Central Otago are reportedly on hold.

The Press, of Christchurch, is this morning reporting city councillors received an email Tuesday night from Christchurch City Holdings Limited, the council's investment company, delivering the news.

According to The Press report, Christchurch City Holdings Limited chair Abby Foote said there had been discussions in recent weeks with the airport about the project.

Plans for a Central Otago airport revealed by Christchurch Airport in August (Image: Supplied).

Christchurch Airport has been approached for comment, and is expected to provide a statement later today.

Crux has already reported on the financial constraints influencing the council's commercial arm, with Ms Foote saying earlier this month Christchurch ratepayers had already faced some of the steepest rates increases in the country, and a strong stable dividend flow from subsidiary companies was needed to offset rates pressure.

At a committee meeting in Christchurch today, councillors are set to discuss a letter of expectation to Christchurch City Holdings Limited.

In it, mayor Phil Mauger says the financial year ahead is set to be "a challenging time for the council and its organisations in terms of funding activities and services".

The mayor then expresses specific concerns about the Tarras airport project.

"The council is concerned that resources are being expended in developing this project which we estimate to have a very low chance of being implemented in the next decade or longer.

"Leaving aside other decision criteria, the simple fact is that council will not be able to provide equity or debt funding to the CCHL group as capital budgets over this time are over-subscribed and capital funding is limited."

He says the council wants more input on progress and decisions relating to the project as "to date, engagement has fallen short of our expectations".

Christchurch Airport has already acquired a large parcel of land in the area for its proposed Central Otago airport.

In August it revealed plans for an airport able to serve 3.6 million passengers a year over a 24-hour-a-day operation.

Read: Queenstown airport: "Common sense has prevailed."