Wellington City Council has overturned a previous decision to sell its 34% share in the city’s international airport.
Councillors voted nine to seven in favour of stopping the move at a meeting this afternoon.
A Notice of Motion was brought by a councillor to amend the council’s 10-year Long-term Plan with the aim being for it not to proceed with a sale of the shares in Wellington International Airport.
It comes after the council adopted its 2024-2034 plan in late June which included the proposal to sell the shares.
A KPMG estimate used by the council in long-term plan consultation put the approximate share price at $492 million.
The proposal is to use the sale proceeds to set up a multibillion-dollar investment fund to cover costs in a natural disaster such as an earthquake.
The council has been advised it has a significant and increasing insurance risk, with underinsurance estimated at $2.6 billion in a one in 1000 year disaster event.
The shortfall is expected to continue rising as insurance costs increase and because of the availability of insurance challenge.
The other financial risk to the council’s balance sheet is the lack of diversity in investments with 93% airport shares and airport ground leases. Most of the investment faces the same risk in a natural disaster, and longer term risks posed by climate change and market risks.
Initial council staff advice on how much money would need to be cut from the long-term plan to increase the debt headroom, if councillors don’t support the airport share sale, reported a $400 million to $600 million reduction in spending.
Councillor Nureddin Abdurahman, who filed the Notice of Motion, said he was elected to keep assets in public ownership.
“Once that asset is gone, it is gone forever.”
Abdurahman said Wellington International Airport was a “strategic asset” for the city that is returning a good dividend.
His speech received a round of applause from most people in the public gallery.
“This issue has frayed trust within the council … that fray must be rebuilt,” he said.
A collective of unions in Wellington also opposed the share sale.
Four councillors called for the notice to be withdrawn, citing the approach was not in line with the council’s commitment to partnership with local iwi Ngāti Toa, Taranaki Whānui and Te Āti Awa signed in 2022.
Mana whenua (indigenous people) do not vote around the council table but have representation in the full council committee that makes decisions on the the long-term plan.
Councillor Sarah Free called it the “dirtiest politics” she had seen since being a councillor, claiming the council vote was being used to avoid mana whenua supporting the sale affecting the vote outcome.
Abdurahman refuted that claim.
“I didn’t want to do this … but this was the only option to stop … (the airport sale).”
“This is the first serious disagreement under Tākai Here (the partnership agreement),” said Councillor Ben McNulty, adding that he hoped mana whenua would continue in their representation role.
‘Disappointed’ – Wellington Mayor on Notice of Motion result
Wellington Mayor Tory Whanau said she was “disappointed” in today’s outcome.
“I firmly believe this proposal was in the best interests of our city.”
The sale of the stake would have been recycled into an investment fund that Whanau said would have helped alleviate growing insurance risk.
“As a progressive Mayor, I have always sought to deal with the difficulty our city faces in a way that allows us to invest in a thriving, affordable city, while building long-term resilience to climate shocks and natural disaster.”
She said that she was “deeply saddened” that the Notice of Motion “deliberately excluded” the council’s Pouiwi representatives and compromised the Tākai Here partnership with mana whenua.
“Mana whenua were here long before the airport was built and this process has clearly hurt our partnership with them.
“I hope all Councillors will reflect on how this decision has been made and work to rebuild that partnership. That will be a focus for me in the coming weeks and months.”
