Whanganui Holdings scrapped: Pilot academy, airport, gas company and port now reporting directly to council

Annette Main says GasNet has brought a lot of money into the council.

Disestablishing Whanganui District Council Holdings means council is “closer to the action”, Whanganui Mayor Andrew Tripe says.

The council-controlled organisation (CCO) will come to an end by July 30, as will its three-person board.

It also marks the end of a year-long CCO review which led to href="https://www.nzherald.co.nz/whanganui-chronicle/news/independent-report-said-whanganui-partners-should-remain-a-cco/RSBHD3ANPVAZPA7RDGIOAS2ZJY/">economic development agency Whanganui & Partners being brought back in-house at the council.

Tripe said council would now have a more direct relationship with Holdings’ subsidiaries - “our area of greatest risk and opportunity” - rather than getting updates from the board.

The subsidiaries are the Whanganui Joint Airport Venture, GasNet, the New Zealand International Commercial Pilot Academy (NZICPA) and the Whanganui Port companies.

“This is where we need to have one of our greatest focuses,” he said.

“I think the independents have done a great job, we just feel we need to be closer to the action.”

Holdings board chairwoman Carolyn van Leuven said the board understood council’s decision and had the opportunity to provide advice through the review process.

“There is still work to be done before all of the CCO investments are truly commercial and in the meantime, elected members are best placed to decide how much risk the council is willing to bear in supporting these businesses through a transition period,” she said.

Whanganui Mayor Andrew Tripe says Holdings' subsidiaries are council's "area of greatest risk and opportunity”. Photo / Bevan Conley

Van Leaven said there would be some modest cost savings from winding down the Holdings company and its general manager and board would work closely with the council to ensure a smooth transition.

Shutting Holdings will save around $199,000 per year.

All subsidiaries will now report directly to the council’s CCO committee.

Former Whanganui mayor and Holdings chairwoman Annette Main said external appointments to the committee needed to be made.

“That’s not unusual - the [risk and assurance] committee has an external chair,” she said.

“These are major commercial enterprises that Holdings is running. GasNet brings a lot of money into the council and offsets our rates.

“You need people there with commercial expertise and knowledge of the industries.”

GasNet is a natural gas network and metering company and the airport venture is an equal partnership between council and central government.

Tripe said two external appointments would be made to the CCO committee, with candidates already identified.

The committee is currently made up of Tripe, chairman Josh Chandulal-Mackay and all other councillors but that would be cut to around eight, he said.

“Effectively, it’s replacing the Holdings board.

“We need to have the right people around the table. We need to be nimble but we also need to be strategic.”

The New Zealand International Commercial Pilot Academy hasn't been profitable since the outbreak of Covid-19. Photo / Bevan Conley

Chandulal-Mackay said the subsidiary boards weren’t being disestablished.

“They are high-risk companies and we have an obligation under the Companies Act to have competency-based directors on those boards,” he said.

According to the council’s annual report for 2022/23, Holdings wasn’t able to pay a dividend - budgeted for $488,742 - because of the ongoing impact of Covid-19 on NZICPA and the financial support that was required to maintain it during its recovery.

Since then, the academy has signed a new deal with Indian airline IndiGo and Holdings purchased 10 planes last December to complete the contract.

The Whanganui Port General Partner Limited (Port GP) and its subsidiary Whanganui Port Operating Company Limited (Port Op Co) have a three-person board - Hayden Turoa, Nick Wareham, and Mark Petersen.

Tripe said having the same board members for both port entities had already saved $63,000.

Reparations for Holdings board members are $40,000 per year for the chair and $35,000 for directors.

Whanganui District Council Holdings board chairwoman Carolyn van Leuven.

Council chief executive David Langford said current and past Holdings board members had done “extraordinary work” in looking after community investments.

He said council needed to maintain a tight focus on the pilot academy’s recovery from Covid-19.

If the (IndiGo) contract works out well, NZICPA should achieve profitability and support local employment of about 100 jobs in Whanganui.

“But, there is a lot of work to do to get it to that point.”

GasNet had been a consistently profitable investment, he said.

“However, there are some big decisions coming up for the council as to whether and how much additional investment it should make back into the business to position it for future energy markets.”

Tripe said the council may look to form another CCO in the future.

“At the moment I think our property is returning about 1.5 per cent. We can do better with that.

“Part of our six-point plan to make rates more affordable is to sell assets - non-strategic ones and those with low returns - but we can look to optimise the rest of our property portfolio, which is considerable.”

Main said Holdings had been a highly successful way for council to keep rates “lower than they would be otherwise” and brought money and jobs into the community.

“The Holdings board has had an external chair since I left and as much as sometimes we do need to look outside (the district) for expertise, we’ve been well served over the years by the local directors that have been appointed.

“Their knowledge of Whanganui and how it works has been, I believe, invaluable over the years.”

Mike Tweed is an assistant news director and multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.