City Care, Red Bus not strategic assets – mayor
Christchurch City Council-owned companies Red Bus and City Care could be the first assets sold in the council’s push to raise money for the rebuild.
As part of her budget proposal Mayor Lianne Dalziel is recommending that the council take the two companies off its strategic assets list.
Removing them from the list will make it easier for the council to sell or privatise them should it choose to do so.
If they remain on the list the council will have to go through a special consultative procedure before it can sell them.
The council had signalled in its draft Long Term Plan (LTP) that it wanted to remove its shareholding in venue management company V-Base, Horncastle Arena, Lancaster Park and the offstreet parking buildings it owned from the list.
City Care has a book value of $136.3 million while Red Bus has a book value of $23m, according to Christchurch City Holdings Ltd’s latest annual report.
Dalziel said removing City Care and Red Bus from the strategic assets list did not necessarily mean they would be sold, but it would make it easier for that to happen.
Given the financial challenges the council was facing, it had to put a line in the sand between what was ‘‘truly strategic in terms of the interest of the city’’ and what was not.
‘‘When we talked to people about what was strategic and what was not Orion, Lyttelton Port and Christchurch International Airport came through clearly as strategic and there was less support for the others being regarded as strategic assets.’’
Dalziel said like many in the community she was opposed to selling assets built up over years of public investment to bidders who were prepared to contribute nothing but cash to the city.
But freeing up capital from an asset base that had grown in value in order to facilitate investment in other assets like waterways, footpaths and streets was a different story.
Under her proposal those three companies would remain strategic assets and any sell-down of their shares to strategic partners would trigger a special consultative procedure.
When asked if the council would look to sell Lancaster Park, Dalziel said it had no immediate plans to do so, while there was an unsettled insurance claim on it.
Dalziel’s budget proposal is due to be debated by the full council on June 23.