KEY POINTS:
Auckland stockbroker William Stevens is worried a takeover of Auckland Airport by Dubai will result in passengers paying for services such as baggage trolleys.
Mr Stevens yesterday said if Dubai Aerospace Enterprise succeeded in buying half the airport it was likely to push for 100 per cent control
sometime in the future.
That would put it in a position to make a number of changes to increase revenue streams, such as charging to use baggage trolleys.
Mr Stevens was speaking at a public hearing on the sale of Auckland City Council's 12.75 per cent stake in the airport company.
The council received 614 submissions on a range of options for the shares, of which 91.3 per cent were opposed to selling the shares and 90.8 per cent opposed to selling some shares. About 30 people attended yesterday's hearing and left councillors in no doubt that they wanted the council to hold on to its shares in the "strategic" asset.
The previous council under Mayor John Banks and Citizens & Ratepayers Now sold half the council's 25 per cent stake for $190.8 million in 2002 to pay off debt.
C&R Now has promised not to sell the remaining shares but has not ruled out selling a "few" shares for a financial windfall.
Mr Stevens and another businessman, Tony Knights, disagreed with a statement in the council's consultation material that the after-tax dividend from the shares represented a 2.3 per cent annual return over 10 years - much less than council borrowing costs of 7 per cent to 8 per cent.
Mr Knights said the argument was "specious". Mr Stevens said the council figures took no account of capital and dividend growth by the company.
Mr Stevens said since the original stake was sold, the share dividends had increased from $5.26 million to $12.7 million. "That virtually equals the interest cost on the debt reduction that was undertaken," he said.
Richard Green, of St Johns, said if the council was projecting such a poor return, why was Dubai Aerospace or the Canadian Government pension fund so keen on the airport company?
"Do these people love Auckland so much they want to charitably give us their money or (do they want) to fleece us?" said Mr Green.
The hearing was an opportunity for mayoral candidates - Coralie van Camp, Lisa Prager and Elaine West - to campaign against the sale.
Ms van Camp accused Mayor Dick Hubbard of not showing leadership by having a "bob each way" on the airport sale.
Mr Hubbard said he was under "very strong legal advice" not to have a predetermined view during the hearing process and wait until the council debated the issue next Monday.
Ms Prager attacked council staff for putting "corporate service" ahead of "public service". Ms West said: "[The airport company] is one of New Zealand's best businesses. We are already in it. Why get out?"
Former C&R Now councillor William Cairns said now was the time to sell the shares and use the proceeds to invest in stormwater, footpaths, buses, train station ugprades and community facilities like libraries, the zoo and art gallery.
