Queenstown Council hands over its tail for QAC to wag…

We Love Wakatipu Inc commentary and draft QLDC statement of expectations for Queenstown Airport Corporation, 1 February, 2022

What is it about the first half of the name “council-controlled trading organisation” (CCTO) that Council still does not get?

This Thursday, councillors consider the draft 2022 statement of expectations – council’s first opportunity in the annual statement of intent process to set strategic objectives and operational parameters for Queenstown Airport Corporation.

And yet again, they have passed the reins back to QAC.

Here are some initial standouts:

  • The door is left open to Air Noise Boundary expansion at Queenstown Airport – the draft just asks QAC to “offer certainty” for the next 10 years.
  • This despite QAC’s new CEO Glen Sowry clearly stating in interviews late 2021 that QAC’s board had agreed to exclude ANB expansion in their 10-year plan. And despite consistent, clear and strong opposition to ANB expansion in all QAC and council consultation with our community since 2018. So why the prevarication?
  • On the other hand, our community has never been consulted about whether we would accept wide-bodied jets. Yet the draft SOE instructs QAC to neither contemplate nor plan for them at ZQN. They were always a non-starter, as ZQN’s runway would have to be extended either onto the river or the lake to take them. It appears to be more of a stab at making true mayoral claims that the community is against wide-bodied jets when speaking against the proposed Tarras International Airport.
  • An official information act response reveals Council is relying on MartinJenkins’ airport assessment report for inserting this as a community-backed objective in the SOE and its most recent 10-year plan. However, wide-bodied jets are not mentioned in MartinJenkins’ 214-page report and there were no questions about them in consultation. So council has no such mandate.
  • Compared to the 2021 SOE, specific commitment to “proactive” and “meaningful” community consultation with our local community is removed.
  • As is commitment to operating the Queenstown Noise Liaison Committee and creating a parallel committee in Wanaka.
  • And acting on the MoUs with Dunedin and Invercargill airports to foster collaborative working relationships.
  • This year’s draft SOE also substantially downgrades council’s expectation of QAC taking heed of council direction on its 10-year plan. From expecting that the strategic plan process will “reinforce QAC’s commitment to proactively engage with Council on the draft plan,” the 2022 version becomes an insipid expectation that “QAC must seek informal feedback from QLDC” on the 10-year plan, the masterplan and strategic direction.  “Informal feedback” will likely wield little, if any, influence.
  • But they have retained the myth that as a CCTO, QAC is required to seek to grow shareholder value. There is no such requirement in the Local Government Act.
  • QAC’s primary objective as a CCTO under the LGA is to “achieve the objectives of its shareholders, both commercial and non-commercial, as specified in the statement of intent”. 
  • And under the LGA, council’s two roles are to enable democracy and to promote the social, economic, environmental and cultural well-beings of our communities, in the present and future.
  • By annually reinforcing this false imperative to grow shareholder value, council’s senior executive and governance team continually undermine councillors’ collective ability and power to set other strategic objectives for QAC that would better help meet council’s primary well-being and democratic objectives.

Both parties’ lawyers confirmed to the September 2020 High Court Judicial Review into QLDC’s illegal Wanaka Airport lease that Council had “ultimate control” of QAC through its SOI.

In the words of QAC’s Chris Curran, “as a CCTO, QAC is required to comply with its SOI (s60 of the LGA). QLDC retains the power to modify QAC’s SOI – and therefore control QAC’s actions – as it sees fit.…QLDC holds 75.01% of QAC’s shares. That super-majority shareholding itself gives QLDC the power to pass special resolutions, unilaterally amend QAC’s SOI, control major transactions, and amend QAC’s constitution as it sees fit.” 

So why is Queenstown Lakes District Council so reluctant to apply this control in the SOE to clearly state Queenstown Airport’s Air Noise Boundary will not be expanded – despite clear direction from both its community and its CCTO?

There have been some improvements in this latest draft:

  • An explicit instruction that the SOI must include clear objectives, clear pathways for delivery and clear reporting against measurable performance targets for all objectives. Yay! The clear reporting and measurable targets have been seriously lacking to date.
  • It’s good to see instruction that QAC work with airlines to reduce carbon emissions – rather than just rely on encouragement, as they do on the noise mitigation front. Admittedly, the carbon neutrality goal only applies to ground operations, so there could be an accusation of greenwashing, but we understand this is a sincere policy direction for QAC management.

WLW also understands councillors have had an opportunity to offer feedback on the senior management team’s SOE draft, some of which was taken on board. Their role is to represent our community’s interests and promote our well-being. To achieve this through the SOE and SOI, we need strong advocacy from our political representatives at Thursday’s first full council meeting of 2022.  We will watch with interest.

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