Auckland City Council has a 12.71 per cent holding, while Manukau's is 10.01 per cent. Photo / NZ Herald
Auckland City and Manukau ratepayers will foot a $28 million bill as their councils move to secure their stakes in Auckland Airport.
The cities' cash injection is the result of the airport company's announcement yesterday of its plans to issue new shares worth $126 million to help pay for its
purchase of a 24.55 per cent stake in Cairns and Mackay airports in Queensland.
Auckland City Council has a 12.71 per cent holding in the airport at Mangere. Manukau's is 10.01 per cent.
To maintain those stakes, Auckland City needs to spend $16 million and Manukau $12.66 million buying extra shares.
Both councils will cease to exist in November when the Super City is formed, but council leaders yesterday said the new investment was necessary to retain ownership of a key asset.
Manukau Mayor Len Brown said the decision meant his city's shareholding stayed at more than 10 per cent and would not be able to be bought out in any takeover attempt.
"Failure to take up the offer would, in effect, be selling down of the council's stake," he said. "Our shareholding enables us to continue to have a say in the direction and development of the company ... On pure commercial grounds it is the right decision. The company is a quality asset which returns good dividends."
Auckland City Mayor John Banks said the airport was a "critically important" piece of infrastructure and would be a significant player in New Zealand's future foreign exchange earnings and inbound tourism.
Local Government Minister Rodney Hide said the arrival of the Super City would not stop council investment in commercial business ventures.
But changes to the Local Government Act, planned for this year, would direct them to concentrate on their core functions, "which I think will be a great relief to taxpayers".
Mr Hide said his opinion of the airport share purchases "doesn't matter", but the spend-up "highlights why we need to be focusing local councils on their core functions, rather than investing in commercial ventures".
Auckland City finance chairman Doug Armstrong said that after November 1, it would be up to the new Auckland Council to determine future policy on the airport shareholding.
