A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.
A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.
A correspondent this week said there were suggestions council-controlled Gisborne Holdings Ltd “adopt the Eastland Group model, with a commercial board of mostly out-of-town directors” — and asked how it would perform without the monopoly status of EGL’s port and electricity assets.
It is an interesting comparison that warrants furtherteasing out.
The strong commercial returns Eastland Group seeks from all its ventures is driven from its board, which has wide experience and skills relevant to EGL’s operations. This drive for profitability and growth runs right through the organisation and precludes — beyond sponsorship and the staff time that goes into different causes — investments purely for community good. It also explains the group’s commercial success.
The council has no control over EGL, rather it has limited control — through trustee appointments and consultation requirements — over Eastland Community Trust, which is 100 percent owner of EGL on behalf of the community. It is ECT that exerts influence over the direction of EGL, through director appointments, consultation and a final say on major investments.
ECT trustees are driven by their trust deed, which was written in 1993. Interestingly, this year the council has been urging ECT to consider changes to its deed.
So, to the council proposal to move all its commercial operations into GHL — the directors of which it appoints, and which now owns and governs its biggest business Tauwhareparae Farms. This would involve creating a deed outlining how it wants GHL to operate.
Hence the council would have a direct level of control over GHL. It is also this paper’s understanding that while it would be commercially focused, GHL would be expected to have a strong community heart (so don’t expect EGL-style profitability).
Our correspondent also raised the issues of a more commercially active GHL competing against ratepayers and their private-sector enterprises, and the risks a refocused and more debt-leveraged GHL might be taking with community assets.
