Complaints - Please scroll to the bottom of the page
Search
« WW1 25 Pounder Artillery Piece Restored | Main | WRC CCC Meeting Report »
Saturday
Feb212015

Economic Development Committee

Ir is sometimes staggering how local government attracts a number of people who are totally unproven as entrepreneurs, but who clearly love the challenge and excitement generated by the actual activity, without needing to have 'skin in the game,' or otherwise put their own assets at risk through capital commitment, mortgage or guarantee that is the very essence of commitment by any actual entrepreneur.

Mayors, councillors and staff are equally attracted to the honey-pot of being able to spend other people's money in the form of rates on exciting ventures that may or may not get off the ground.  The problem is that while excitment and/or reflected glory may be a major motivation, it is simply too easy to walk away from the venture should it fail, or indeed even fail to materialise. It really is so much more exciting than dealing with 'underground infrastucture,' and other 'knitting' projects. 

The ATEED division (subsidiary?) of the Auckland City Council have recently indulged in a little bit of excitement by posting a former senior officer, apparently with a homesick wife to a fabulous new, and previously unplanned position in London where he will work as a contractor on $230,000 (all expenses paid - including a $29,000 contribution to relocation fees!) attracting skilled staff for Auckland business. This arrangement came about because of the stated intention of said staff member to resign and move to the 'old country' to cure his wife's homesickness. 

This rort was cooked up with ATEED (the Council's economic development outfit) without any reference to the elected members of Council, or even a 'head's up' to Mayor Brown who appeared blind-sided late in the week as the result of an apparent insider 'leak' to Bernard Orsman - the Herald's Council roundsman.

I raise this issue (you have probably already read it) because it perfectly represents what I have been saying about the sudden interest amongst our current councilors and staff in matters concerned with economic development - well outside their electroral mandate, and almost certainly beyond their experience, knowledge and competency. This culminated last term with the appointment of the Economic Development Committee which was supposed to provide legitimacy to the schemes dreamt up mainly by Leach and Day.

It has operated now for well over a year with little to show for its efforts other than to provide multi-millionaire Rod Millen with $40,000 to help run what was most certainly a very successful 'private' hill climb at his coastal estate at Hahei, in which Leach competed.  Other than that, the Committee has approved allocations of small amounts to various community projects, but has continued to meet six weekly at which time the three 'outsiders' have been permitted to charge "their regular fees" for attendance. 

In view of the time that has elapsed, I will be seeking a full accounting of their fees through an OIR over the next week.

In the meantime, the Committee that remains 'controlled' by the outsiders through their Chairman's casting vote, meet again this Tuesday to consider this heavy workload of activities. Mostly this comprises anodyne reports from the raft of new appointees to economic development roles. 

In fact, the only matter of any significance is that related to the Coromandel Harbour Development Project.

My interest is primarly in the area of costs, and just what share of the development, and operating costs are expected to be picked up by ratepayers. Remember that the Committee considering this Project is controlled by un-elected members whose main interest is in seeing that maximum rate-payer input, and the minimum cost to their commercial interests, and those of their associates. And keep in mind by the way the $100,000 each that this group can spend on any or all the activities it choses in any one year.

To quote from the document:

Development Costs

With development costs ranging from $14m to $65m depending on the preferred option Thames-Coromandel District Council acknowledges that it cannot go it alone. Thames-Coromandel District Council will need to secure private investment and support from Central and Regional government.

The lack of government infrastructure funding programmes as well as the various limitations on available contestable funding programmes means that partnering with public entities is essential both from a point of support to get the project over the line and to augment funding to develop the infrastructure.

Component

Sugar Loaf, f'urey's Creek & Coromaudel Wharf/Inner Harbour

 

Sugar Loaf &

Furey's Creek

Coromandel Wharf Inner Harbour

Consents

$1,210,000

$1,210,000

 

 

 

$1,650,000

$1,320,000

$1,320,000

$1,650,000

Subtotal

$ 4,180,000

$2,530,000

$1,650,000

Construction

$2,808,443

$2,808,443

 

 

 

$47,906,320

$5,636,055

$5,636,055

$47,906,320

Subtotal

$ 56,350,818

$8,444,498

$47,906,320

Roading Upgrades

$1,750,000

$1,750,000

 

 

 

$1,500,000

$1,500,000

$1,500,000

$1,500,000

Subtotal

$ 4,750,000

$3,250,000

$1,500,000

Total Capex Cost prior to External funding

$65,280,818

$14,224,498

$ 51,056,320

Indicative capital contribution from all sources

$77,700,000*

$1,200,000**

$36,500,000***

*    Capital contribution is indicative only based on assumed private investment into Sugar Loaf, the harbour clean-up and marina.

**   Capital contribution is indicative only based on assumed private investment by the Coromandel Marine Farmers Association into the Sugar Loaf development.

*** Capital contribution is indicative only based on assumed private investment into the harbour clean-up and marina.

Note:  Capital contributions are not all received upfront.

 Political Will

Political support at a National, Regional and District level will be required for all private funding sources.This will affect specifically the Inner Harbour option as this is not achievable without significant private partnering and a public sector supported harbour clean up.

Facility Ownership and Governance

Should Thames-Coromandel District Council own assets such as this? How can Thames-Coromandel District Council effectively partner with Iwi and private sector without compromising affordability and key strategic outcomes?

Operating Costs

Each option has varying degrees of operational costs which need to be met either through revenue generation or via the ratepayer.

 

$µgar Loaf, Furey's Creek & Cotomandel Wharf/Inner H.

Sugr Loaf & Furey"s Creek:

Coromandel Wharf lnner Harbour

Indicative Operating Revenue  estimates *

$2,600,000

$560,000

$2,200,000

Total Operational expenditure prior to revenue (excludes repayment of any loan funding)

 $1,460,000

$450,000

 $1,010,000

Indicative annual loan repayment 

 $2,170,000

 

$1,060,000

$1,110,000

Estimate based on forecast user pays and various commercial opportunities.

** Estimate based on loan financing the balance of development costs after a level  of assumed  public and private  investment.

Effective partnering with the private sector is essential for the on-going operational viability of the facilities.

All options also imply a significant user pays contribution by all harbour users, across all harbour assets.

Managing Existing Harbour Assets

A number of the sites being considered for development or by reciprocation not being developed are nearing the end of their useful life and require either extensive remediation or demolition and removal from the Coastal Marine Area.

So there you have it - this constitutes the bones of the Business Case to be adopted at next month's Council meeting - woe betide anyone who disputes any of these projections, but I venture to suggest that they dreaming if they think that other regional or Government agencies will be prepared to contribute to the degree suggested or implied. TCDC ratepayers had better gird their loins for a major hit in order to support what at present constitutes just about the only plank of Leach's grand legacy projects still afloat - no pun intended. 

And as an aside - they still have not secured the 'guaranteed' support of the Coromandel Marine Farmers Association for the very first stage - the costs of the consents for the redevelopment at Sugar Loaf. 

Watch this space!

 

 

 

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>