Chris Laidlaw says government may be asked to help recapitalise CentrePort
Greater Wellington Regional Council (GWRC) chairman Chris Laidlaw has vowed not to let CentrePort fail and warned the government may be asked to invest money into the quake damaged port.
CentrePort saw extensive damage to its wharf assets in the November 14 earthquake, while the future of one of its major commercial properties, Statistics House, is unclear, after two floors partially collapsed.
While some log and container movements have resumed, many aspects of the way the port operates have been heavily modified, and are likely to be disrupted for years, chief executive Derek Nind said on November 21.
Chris Laidlaw, chairman of GWRC, said while it remained unclear what losses the port company may face or the potential liability for the council, as majority shareholder the council stood behind the company.
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"This is a public asset that is now being seen as a very important strategic asset for the city and the region as a whole, so there's no way we're going to let the port fail," Laidlaw said.
"We've had a conversation with senior members of government departments in the last few days which suggests very strongly to us that they take the same view."
Asked if GWRC could be asked to inject more money into CentrePort, Laidlaw raised the prospect of a central government bailout.
"Well, there's a chance that the government will have to invest money and the government regards it as a strategic asset, and we're all on the same page."
GWRC owns just under 77 per cent of CentrePort, with the balance held by Horizons Regional Council, which covers the Manawatu-Whanganui regions. The two councils shared $7.5 million in dividend payments in the year to June 30, 2016.
The port and city and regional councils would work on a recovery plan for the port in the coming weeks which would be shared with central government in the coming weeks, Laidlaw said.
CentrePort declined to comment on Laidlaw's comments. Previously the port's management has said it is "well insured" but refused to discuss what losses it, or its shareholders, may face.
Prime Minister John Key's office referred questions to Transport Minister Simon Bridges, who has not yet commented.
A spokeswoman for Bridges said: "The Government hasn't been approached about this, and it's not something that's being considered at this time."
"THEY HAVE NO CHOICE"
Jordan Williams, executive director of the Taxpayers' Union, a long time critic of CentrePort's commercial property ventures, called Laidlaw's comments "alarming".
"If the regional council was in discussions with the government for some sort of bail out, that means that the situation is much, much worse than previously thought."
CentrePort's commercial property investments had left the company in a "vulnerable position", Williams said.
GWRC has for some years agreed to guarantee CentrePort's debt up to $150m, which Williams said meant the council "don't have a choice" but to stand behind the company.
"WE'RE NOT SPOOKED"
Laidlaw, a Rhodes Scholar who played 20 tests for the All Blacks, said the council was comfortable with its arrangements with CentrePort.
"The buildings are fully insured and they're insured separately, so there's no difficulty there. We've satisfied ourselves of the extent of that, and that's good."
He could not say whether the council would certainly need to invest money in the port, or what the potential liability might be.
"The port may have to invest in other ways. That investment could come from a number of sources," Laidlaw said.
"The regional council is not spooked by this; we're quite comfortable with the way the arrangement is."
A clearer picture of the costs faced by the port could be some time away, Laidlaw said.
"We don't know what the extent of the damage is and I'm loath to talk about where the insurance business will go because, as you will know, a lot of that is pretty sensitive stuff."