Complaints - Please scroll to the bottom of the page
Search
« Hammond Goes - Leach Sad! | Main | Hahei Press Release »
Saturday
Dec122015

Coromandel Harbour Proposal

The major problem with public servants becoming involved with commercial development is that the inherent absence of commercial reality is often enhanced by the fact that they are spending other people’s money. Taxes and rates are ideal sources of capital because of their revolving nature – hey presto!

In the case of our Council, this tendency is enhanced by the super-imposed need to extend beyond core council business into activities that satisfy the inflated ego and legacy ambition of a grossly over-bearing Mayor with a life-long predilection for bull-dozing his way through opposition.

As for Coromandel Harbour, it has been relatively easy to secure agreement from what are fondly and often described as ‘stakeholders.’ These can generally be described as those people who stand to gain financial benefit from our Council’s sponsorship of whatever project is in the works.

Those who have grave reservations for one reason or another – ecologic, economic or social, are kept well in the background, or ‘out of the loop,’ until such time as the highly polished project is submitted for resource consent through a largely compliant process normally well-disposed toward  speculative, if not spectacular projects. These are commonly well supported by what are often highly conflicted commercial, engineering and development interests.  

The project in question on this occasion that was suddenly released to the media at 4pm on Friday 9 December was none other than the Coromandel Harbour Facilities project that cover a number of different proposals relating to Coromandel Harbour, but which basically comprise two strands – that relating to the development of the existing facilities at Te Kouma (Sugar-Loaf), and then the nebulous Inner Harbour Project that raises a number of different commercial possibilities related to tourism, aquaculture and recreational fishing.

The entire project (5.59MB) can be accessed through the download facility on the right of the 4 o’clock Press Release (above!), and it is recommended that every single rate-payer read and understand just what is being proposed.

There are aspects contained within this proposal that need close analysis that I have no intention of applying at this time. Readers of this blog will no doubt be very aware of the flags that I have raised in the past in regard to all of these proposals, and not least the secrecy that has been applied ever since Hammond was given $213,000 to throw at the development of this Project Proposal. It is consequently an extremely well designed piece of work with substantial professional input designed to attract the interest of a range of potential investors.

The problem as I see it is that our Council has already indicated that the Inner Harbour (the main!) proposal is likely to cost in excess of $60m, and that it cannot afford to fund this project on its own - a horrendous prospect, but nevertheless paints itself into the picture as a "partner."  Read the document to understand how our Council is already disguising its input into the Te Kouma expansion - if the mussel farmers end up paying for any of this, let alone funding the legal defences against challenges almost certain to be mounted by the Te Kouma residents, it will constitute a miracle. Their leader - Gilbert James, has proved a more than formidable opponent for our Council representatives.

Readers will I am sure understand the dangers implicit in the Inner Harbour proposal. It is almost inevitable in the circumstances that canny investors will ensure that the majority of the risk is absorbed by our Council, and its rate-payers, no matter how it is sliced and diced. A development of this nature encompasses substantial risk, but instead of normal rigorous commercial assessment being undertaken, it is inherent in such arrangements for investors to primarily protect their own interests while enhancing the risk of the public partner – i.e. the Council. Thus Private/Public partnership arangements have evolved.

The simple and straight-forward question that must be asked is - "If this proposal is so good, and contains such commercial logic, why is a private investor, or consortium of investors not prepared to undertake the project, if necessary with contractual assurances from our Council regarding resource and other consents?" - fair question?

There is simply no need for a proposal of this natutre to contemplate Council investment other than at the margins. Comfort may be provided for investors, as has happened elsewhere without the financial interests of 27,000 rate-payers being placed in the mix, and such comforts can be easily spelt out in a prospectus along the lines of the Proposal now in question. Our Council has neither the scale, nor the ability to undertake entrepreneurial activity of this nature - it neither has the commercial skill to undertake this role, nor the ability to embed effective protections. Recent history with other projects proves this to be the case.

I invite readers to think very carefully about what is being proposed here, and question why a Council of our size would wish to place itself in this risk profile through such a greenfield investment? Do others sense the danger of simply telling the market that this project will cost over $60m, and that while we can’t afford it, we are open to all offers?

Do others sense the impending role of our erstwhile Economic Development Committee in gaily waltzing us down this path to perdition?

It is an invitation to a disaster, in my opinion.

 

 

 

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>