KEY POINTS:
If there is any good reason for two city councils to resist an enticing offer for their shares in Auckland Airport, it is not the election promise made by some council members not to sell a public asset. Election promises must never be used to preclude a reasonable public discussion. If that discussion canvasses all the arguments for and against a sale and reaches a consensus in favour, it would be ridiculous to insist that a sweeping promise must prevail.
After the airport company's disclosure this week that a Canadian Government pension fund had made an offer to "certain shareholders", and the Auckland and Manukau city councils' confirmation that they had been approached, the people of Auckland as well as the councils should consider a sale with an open mind.
Not many may feel qualified to assess the bid in purely commercial terms and not many may want to. It will be argued that Auckland's only international airport is too important to the region - and the nation as it receives 70 per cent of visitors to New Zealand - for the debate to be limited to calculations of the asset's likely appreciation and dividends against the value of a bid that would release $860 million for public purposes.
Many will prefer an argument of principle, and the only principle some will recognise is that an infrastructural monopoly as crucial as the airport should not pass into private or foreign hands at any price. But that is not the only principle of public interest to consider. A true assessment of public interest examines whether that interest is best served by public ownership of the asset in question.
Ownership of a commercial asset gives a public body a financial interest that may sometimes be in conflict with the true public interest. To find an example, look for a railway to Auckland Airport. Look in vain.
Auckland councils are anxious to improve passenger railways around the city, and ready to invest hundreds of millions in terminals, track electrification and nicer trains for a population that mostly lives a long way from a station. But much less is heard from the councils about the one track that would be highly appreciated by Aucklanders - a relatively short link from the main trunk line to the airport that could liberate travellers from the tortuous journey by car or bus through suburban streets.
A rail link to the airport is obviously in the public interest, but equally obviously, it is not in the airport company's interest. Auckland International Airport Ltd earns only half its revenue from airlines and direct services to them. It earns as much from its carparks, the lease of retail space in its terminals and other property rentals.
It is perfectly understandable and indeed commercially responsible for the company to ensure passengers and those greeting or farewelling them have to spend hours at the airport rather than using a train-to-plane service from Britomart. When councils own shares in an airport they, too, should consider the financial implications for their public investment of a railway.
The public interest is probably better served when public bodies are released from commercial ties and more likely to permit competition. Airports in totally private, even foreign, ownership are not natural monopolies. If they do not provide good service at reasonable cost they can be challenged, as Auckland Airport has been by the Whenuapai proposition.
The offer for Auckland International Airport looks too good to ignore, and it might yet be improved by rival bids. If ever the shareholding councils intend to turn paper wealth into public benefit, this is the opportunity. They should sell.
