5 Dec 2014

Council to vote in secret on asset sales

5:31 am on 5 December 2014

Christchurch City Council will vote in secret today on whether to sell some of its assets.

On the block could be part or all of Christchurch Airport, Lyttelton Port, the Red Bus company and lines company Orion, to name but a few.

All or part of the Port at Lyttelton could be sold.

All or part of the Port at Lyttelton could be sold. Photo: PHOTO NZ

The public and media will be excluded from the meeting for reasons of commercial sensitivity, including what its agenda describes as conversations with potential partners.

It is taking place in the wake of a council survey showing half of all respondents were opposed to asset sales and that only 17 percent favoured some or all of them being sold. A further 20 percent favoured partial sales.

The convener of Keep Our Assets Canterbury, Murray Horton, said the potential $900 million shortfall in the council's budget that was being used to justify asset sales was scaremongering

Lianne Dalziel

Mayor Lianne Dalziel Photo: Christchurch City Council

Mr Horton said the shortfall may never eventuate and is dependent on factors such as the council's insurance payout, which has yet to be decided.

He said even a so-called strategic investor in something like the port, which could bring in private sector dollars and expertise, could turn bad in the end.

"You might get a so-called white knight investor comes along and buys a stake in the port company. There's nothing to stop them flicking it on to somebody else who might not be a white knight.

"What is being proposed is that we be transferred involuntarily from being homeowners to being tenants."

An economist with think-tank the New Zealand Initiative, Eric Crampton, said Cantabrians have an emotional attachment to the city's assets, but selling them off in no way robs the city of any future dividends they might feed back into the council's coffers.

"Suppose that you're having some tough financial times and somebody in your family says why don't you sell off your term deposit and you say, well then I wouldn't be getting interest on it next year. Well that's true, but the interest stream that comes from it is priced into the value of it if you sell it on now. So you'd be getting a lump of money now that's equivalent to all the future dividends you'd be getting out of it (the asset)."

The chief executive of the Canterbury Employers Chamber of Commerce, Peter Townsend, said the port was the most likely asset to be wholly or partially sold and this could have real benefits in terms of growing the asset.

"We know some years ago that there was some interest in a shareholding of the Port of Lyttelton from a Hong Kong based company, he says.

"We need to think about how we can make our city internationally relevant by getting strategic partners into those assets that makes us more involved with the world and oh, on the way through, solves our financial difficulties."

Christchurch mayor Lianne Dalziel declined to be interviewed ahead of today's meeting.

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