Contrary to assertions made in the media that everyone who had heard Queenstown Lakes Mayor Clive Geddes explain the airport deal agreed it was a good one, three councillors remain unconvinced.
Gillian Macleod and Vanessa van Uden and I believe the process was flawed and undemocratic; the principle of selling a fully owned strategic asset in secret was wrong; and the deal done has not been - and can never be - proven to be the best the community could have gained.
We heard the Queenstown Airport Corporation and the mayor's explanations for why the deal was done with such urgency and secrecy, but remain unconvinced that either the means or the ends were justified or justifiable.
Summarising our major concerns:
• QAC escaped councillor and community scrutiny of its deal with Auckland International Airport Ltd (AIAL) by using what we believe to be a specious argument - that it was not legally necessary because QLDC's original 100% shareholding was not sold.
• Creating new shares to down sell QLDC's holding to 75.01% has the same effect as selling 24.99% of the original shares - we as a community no longer own 100% of our airport.
• Selling just 0.01% less than the 25% shareholding that would have triggered community consultation appears a deliberate attempt to avoid due process.
• We believe QAC has in fact sold a "significant asset", on which the community should have been consulted and to which the council should have had to agree. The two politicians and two staff who knew of the deal before it was signed off accepted legal advice paid for and briefed by QAC that the deal was legal. Independent advice should have been sought by QLDC, especially with regard to the sale's significance and consequent legal ramifications. As the old saying goes: "He who pays the piper . . .
• The community had the right to expect a stronger understanding and representation of our interests from our mayor, deputy mayor, chief executive and deputy chief executive. They were the only ones who had the opportunity to question the deal on what is "right and proper" as well as legal grounds before it became a fait accompli.
• The confidentiality agreement signed by the deputy chief executive officer made him complicit in sneaking through an unmandated change to the statement of intent (SOI) to facilitate the deal in a way that has undermined councillors' and the community's confidence in the SOI process. The SOI is supposed to be the key to council control of QAC. The integrity of this has been compromised.
• The exclusion of council perspective on the deal before it was done meant that the proper balance of considering community interest in this cornerstone strategic asset was lost.
• A major justification used in the sale was the strategic alliance with AIAL. However, there is no direct link between the shareholding and strategic alliance agreements. The shareholding is not necessitated by the strategic alliance - nor does it guarantee its supposed benefits.
• There is also no guarantee of the longevity of the strategic alliance between QAC and AIAL, as AIAL can sell its shareholding to third parties. Nor are there any guarantees that the anticipated benefits of the strategic alliance will eventuate.
• Because of this deal and the way it was done, QAC has effectively negated the opportunity for strategic alliances with other airports/parties.
• By having only one valuation done, QAC potentially accepted a lower price than could have been gained.
• This potential was exacerbated by not testing the market through seeking competitive bids - and further, by selling at one of the lowest points in the property and business cycle.
• This appears to have been done to achieve an "urgent" sale, when such urgency was not required. The need for capital was not immediate. Other options were potentially available if it had been.
• The way the deal was structured, the community gets no direct benefit until and unless the second tranche goes ahead. This, we believe, is cynical manipulation to force the council's hand.
• Inaccurate media information has gone uncorrected - for example, not making clear until almost a week later that the $10 million special dividend would not happen until the second tranche had been sold and statements that the mayor, deputy mayor, chief executive and deputy CEO had their confidential briefing on July 3, whereas we were told it was June 17.
As a result of these continued concerns, we cannot support QAC's decision.
Last Thursday, we suggested to QLDC's CEO a variety of possible responses that we would like investigated.
We have also asked that there be an opportunity for members of the public both to give their perspective on the deal and to hear QAC's justification in a public meeting, beyond the limits of media time and space constraints.
Our power in pushing for a more forceful response to what we believe are fundamental attacks on due process, commercial good sense and, most importantly, democracy is limited, however, by the fact our concerns are not shared by a majority on the council.
Cath Gilmour is a councillor on the Queenstown Lakes District Council.
