22 Dec 2014

Some SkyCity public funding looks likely - academic

7:23 pm on 22 December 2014

A tourism professor says it is hard to see the SkyCity convention centre going ahead without some public funding now.

An artist's impression of the convention centre.

An artist's impression of the convention centre. Photo: SKYCITY

The cost of building the centre in Auckland was initially put at $402 million but last week it was revealed that could go as high as $530 million.

SkyCity's chief executive Nigel Morrison said construction costs have risen and the Government will need to help plug the funding gap.

He said another option could be to scale back the size of the project.

But Simon Milne, a professor of tourism at Auckland University of Technology, said there would be difficulties no matter what happened now.

"If we head down the higher cost, better designed, five-star hotel option, the question is are we going to have SkyCity willing to stump up that extra money without public sector support, and that seems unlikely from what they said."

He also questioned why the original costs were so inaccurate in the first place.

Dr Milne said SkyCity was very clear when the convention centre deal was announced that it would be at no cost to either taxpayers or Auckland ratepayers.

Problem Gambling Foundation chair and former Auckland councillor Richard Northey said if SkyCity would not build a convention centre without taxpayer funding or concessions, the project should be put back out to tender.

SkyCity should be held to the agreed contract, he said.

"If the SkyCity can't do it, then the Government should go back to the other four, credible, tenderers to see whether they're prepared to go ahead if SkyCity's not prepared to do without even further harmful gambling or even taxpayer contribution."

Another organisation could be able to build something better for the amount SkyCity claims the project will now cost.

Minister of Economic Development Steven Joyce would not rule out using public funds but said other options will be looked at first, including scaling back the size of the project.

300714. Photo Diego Opatowski / RNZ. Steven Joyce  during a press conference regarding Novopay next steps.

Steven Joyce is not inclined to use taxpayer money to make up SkyCity's funding gap. Photo: RNZ / Diego Opatowski

He told Morning Report another option could be to involve the Auckland Council in the project in some capacity.

"We've just got to keep our minds open, not wind ourselves up too much and go through the process."

SkyCity said it wanted taxpayers to help foot the new bill, which it said was due to a rise in construction costs.

Chief executive Nigel Morrison told Morning Report the Government will need to help plug the funding gap - but he would not say by how much.

The Labour Party said it was inevitable the taxpayer would contribute to the higher cost of building the convention centre.

Labour's economic development spokesperson, David Clark, said the contract wording was heavily stacked in favour of SkyCity.