Mayor Kevin Winters: Airport plans made pre-GFC

By Rotorua Mayor Kevin Winters JP


Re Councillor Charles Sturt's views on airport development and funding (Opinion, yesterday).

There was nothing particularly new in his comments but his interpretation of history and memory of some events is interesting, to say the least.

He does not acknowledge that he has actually been on the council throughout the entire period when airport development decisions have been made, or that he has been party to all decisions taken in relation to funding airport infrastructure.

Most people know by now that the council's original preference for servicing loans for developing airport infrastructure was for that funding to derive from revenue generated from airport business operations.

The council's original advice that this was achievable was based on sound independent expert forecasting at the time.

However, as we all know, those forecasts were made in a pre-Global Financial Crisis (GFC) environment.

The world has changed much since the GFC kicked in, hence the council's subsequent pragmatic and prudent decision to service those loans from rates revenue, exactly as we do for funding most of our other community infrastructural assets. So this is nothing new.

It is worth noting that the council's plans for servicing these loans, as set out in our 2012-22 Long-Term Plan, have been approved by the Office of the Auditor-General.

It is also important to note that much of the costs involved in developing our airport were not just for attracting transtasman services, but were essential for complying with new and higher safety standards for domestic aircraft operations and for accommodating new generation domestic jet aircraft.

Councillor Sturt makes reference to expectations that the Bay of Plenty Regional Council would financially support the airport's development.

That remains a reasonable expectation, as the airport is a truly regional transportation and economic development facility, one that generates an economic benefit to the region of between $50 million and $100 million every year.

Councillors remain disappointed that the regional council has to date failed to support the Rotorua community in this instance.

Councillor Sturt also finds it "interesting" that the asset side and the operational side of the airport have been split.

However, this is a sensible model as we have a company (CCO) established whose job is to focus on running an airport business, rather than having the added responsibility of infrastructural assets.

For the record, the airport company is doing a good job and is operating profitably. It is well run by an experienced board of directors and CEO, under the astute chairmanship of Ray Cook.

One of Councillor Sturt's comments refers to a decision to contribute funds to a joint marketing programme with Air New Zealand to promote our transtasman service to the Australian market. Readers should be aware he supported that decision when it was made.

Councillor Sturt asks where Rotorua District Council accounts show income received from the airport of more than $700,000. I'm not sure why he needs to pose this question in this newspaper, when he could simply ask me or our chief executive. For the record, that income is accounted for under "Note 21: Related Party Transactions" in our 2011/12 annual report - a public document. Councillor Sturt has a copy of this report and one would have assumed he understands what's in it, as he was at the council meeting and voted when it was adopted by councillors.

- ROTORUA DAILY POST

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