Sale of Ports of Auckland and airport stakes may be option to provide alternative finance

The sale of Auckland Council shares in Auckland Airport and Ports of Auckland looks set to be debated by councillors tomorrow.

Officers are putting up a paper to the finance committee asking for the partial or full sale of assets to be part of a review of alternative sources of financing for the cashstrapped council.

The paper does not specify asset sales at this point, but chief executive Stephen Town has reportedly floated the idea of selling shares in Auckland Airport and Ports of Auckland.

“We do intend to look at some of our asset holdings,” Mr Town told a group of Colliers International clients in May, according to the Bob Dey Property Report.

Mr Town is overseas and could not be reached for comment, but a council spokeswoman said councillors have asked for everything to be put on the table as part of a review of financing options.

Councillors agreed to the review in May to reduce the burden of revenue from rates, maximise the return on investments, explore alternative finance sources and review assets poorly aligned with core business.

Mayor Len Brown last night said there was no proposal before the council to sell strategic assets and he would not support any such proposal.

The council intended to sell more than $600 million of non-strategic assets over the next 10 years, Mr Brown said.

The council’s 22.4 per cent holding in Auckland Airport is worth $1.39 billion.

The port company was last year valued at $1.079 billion.

Councillor Mike Lee, who chaired the Auckland Regional Council when it bought the remaining 20 per cent port shares in 2005, said Aucklanders have made it clear they were opposed to asset sales.

He said the port and airport provided long-term income streams for council. Last year, an $83.9 million special dividend from the airport was used to pay down debt.

Councillor Cameron Brewer supported serious analysis into the council’s major assets, including surplus council buildings and central city parking buildings. “Some of us have long been calling for the likes of our port company to be independently assessed on what it’s likely to deliver in future annual dividends versus what a partial or whole selldown of the operating business would yield while keeping the underlying waterfront land in 100 per cent public ownership.”

Officers are proposing two private advisory firms review the council’s mix of financing sources and report back to councillors to provide input into next year’s budget.

The council spokeswoman said: “This is very much at the scoping stage and once councillors have decided what’s in and what’s out we will then engage with relevant parties to provide more indepth advice.”