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Monday
May042015

More Confusion on Coromandel Project!

This heading is absolute rubbish of course – a distortion of what was discussed and decided at the Economic Development Committee Meeting on 24 April, and reflects very badly on the whoever wrote it.

I sat through the entire meeting and I can assure readers that what was decided was quite the opposite of what is reported in the presser put out this morning on the matter. Amidst all the confusion arising from the failure to present the Business Case at the April meeting as earlier planned came the bombshell of Hammond “taking over” both the Coromandel Harbour and the Hauraki Rail trail projects.

Then he announced the breaking up of the Coromandel project into two tranches, starting with Sugarloaf. He then explained that he and Leach had attended a meeting with the CMFA the week before when they (the CMFA) had agreed to take-over the submission of the Resource Consent application. So far, so good, but the financial arrangements explained to the EDC were quite different to those outlined in the presser.

Let us be quite clear – Council had already been persuaded that it should take responsibility for 50% of the cost of the million dollar plus resource consent. This was on the basis that Council needed to address health and safety, and parking issues at the facility.

That being the case, the question was, and always has been – how were the farmers to make their contribution to their 50%. For David Hammond to claim as he has in the presser that “The CMFA will submit the Consent at their cost," is a total distortion. What he has not made clear here is that at the meeting, he and Leach agreed to “underwrite with Council financial resources for the entire cost applicable to the farmers, and subsequently seek to recover it by means yet to be decided financial instrument.” (excepting in the event of the failure of the application – see final para!)

In other words, the CMFA is not in a position to recover the cost from its members, being simply an incorporated society.  The idea that it is to be the applicant in the process is simply a device to give the appearance of the involvement of its members in the application process.

That is a quite different situation to that described in the presser. What TCDC’ lawyers are endeavouring to establish is just what form of securitised instrument may be applied to enable it to recover the 50% share of the overall cost direct from individual members of the Association – not made at all clear in the presser, and a deeply flawed objective if rate-payer interests are to be protected.  

Of course this whole charade is designed to save face for Leach who made the bold assertion at the outset that the project would not go ahead until the entire farmer share of the resource consent cost (at least $500k) was up-front and available. Giving in in this manner places enormous risk on the shoulders of ratepayers when the farmers are clearly the major beneficiaries of this development.

For Hammond to say as he does in the presser that “Council is considering whether it will underwrite 50% of the costs if the consent fails” is a disgraceful and deliberate attempt to obfuscate. What he does not make clear is that they are considering underwriting the 50% CMFA share of the cost as well as meeting their 50% share. In other words, if the application fails, the farmers pay not a brass razzoo – nilch! - only the district ratepayers. And "considering" was not the word used at the meeting - it was a 'done deal,' only subject to Council approval. 

Gilbert James and his members (of which there are several major industry players with huge financial resources) must think all their Christmases have come at once – they get what they want at virtually no cost, and some yet to be devised financial instrument, that probably few will sign, and our Council stands to be suckered at every turn. That is not just bad business, it is an insult to our intelligence, and that of the Economic Development Committee who must be wondering what exactly it was that they decided on the 24 April after this presser.

It is incumbent on our Council to clear up this false impression without delay.

 

 

 

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