Christchurch mayor wants 'intelligent conversation' about selling assets

Wednesday, 27 June 2018

Christchurch Mayor Lianne Dalziel wants to have an 'intelligent conversation' with Christchurch ratepayers about partially selling the city's assets.

Christchurch Mayor Lianne Dalziel is supporting calls by some councillors to consider partially selling assets to reduce ballooning debt levels.

Christchurch City Council owns $2.5 billion worth of assets through its investment company Christchurch City Holdings Ltd (CCHL), including 75 per cent of the city's airport, 100 per cent of Lyttelton Port and 89 per cent of electricity network company Orion.

Keep Our Assets Canterbury held a number of protests against asset sales outside Christchurch City Council and inside the council chamber during 2015 and 2016.

The council's net debt is set to increase 75 per cent from $1.2b in 2019 to $2.1b in 2024 and rates are signalled to rise by 50 per cent over the next 10 years. The new 10-year budget, the long term plan, does not include any asset sales, but councillors Raf Manji and Deon Swiggs last week said partially selling assets was something the council needed to consider to keep rates down and reduce debt levels.

Dalziel said this week she was not suggesting selling everything. 'I'm just saying, would it be sensible to relinquish some shares in some of the assets that we own or even one of the assets we own?'

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She wanted the city to consider forming a 'strategic relationship' with a long-term investor like Ngai Tahu, ACC, or the New Zealand Super Fund. The investor would buy equity in a council company and then work with the council to increase its overall value.

'They bring real value to the table, so it's kind of like why wouldn't you?

'My main frustration is this fixation with owning every single share of every single company that we own at any one time.'

There was a public outcry when the council proposed selling assets in 2015. The council ended up scaling back its plans and asked CCHL to release capital without selling assets.

Citycare was put on the market, but the sale fell over when the council could not agree on a price with the one buyer left on the table. All the council's companies are listed as strategic assets and the council would have to consult with the public before deciding to sell any.

The council had a strong asset base, Dalziel said, which had increased in value exponentially. In 2014, it de-listed Lyttelton Port and took full ownership.

'What I would like is to be able to have an intelligent conversation without somebody just standing there with a little placard in their hand saying 'no asset sales' or 'keep our assets'.'

Not everyone around the council table is supportive of asset sales.

Deputy mayor and caucus leader of the left-leaning People's Choice political grouping, Andrew Turner, said the council did not need to sell assets, partially or fully, because it had just approved a 'prudent and sensible' 10-year financial strategy that did not involve selling assets.

People's Choice, which has six other councillors around the table, has historically opposed asset sales.

Selling down assets was a short-term fix for a long-term problem, Turner said.

He said the council relied on regular dividends from CCHL, which helped to reduce rates increases.

Selling assets would reduce the dividend collected by the council and could end up seeing rates increase over time instead of reduce, Turner said.