Council rules out asset sales
The Christchurch City Council will not sell assets to fund the city's quake repairs and rebuild.
Radio New Zealand is this morning reporting a decision by the council to fund its 40 per cent share of the city's earthquake repairs through increased rates and rents.
Mayor Bob Parker told the radio station the council would not sell its stakes in Port Lyttelton or Christchurch International Airport Ltd.
It is instead proposing a rates increase of about 6.6 per cent over three years and a 3.8 per cent rent rise for council housing from July.
Earthquake Recovery Minister Gerry Brownlee said he did not wish to comment and it was a matter for the council.
Parker told Radio New Zealand: "It is the stated clear, legal, defined, definitive, accurate and absolute position of this council, at this moment, that we are not selling Lyttelton Port Company, Christchurch International Airport Ltd, City Care Ltd, Orion NZ Ltd, Red Bus Ltd, Enable or EcoCentral. That is our position."
He said selling assets would mean a loss in dividends to the council equal to 15 per cent of the value of rates. "The maths is simple."
"If you sell a strategic asset and say get $1 billion, you'd be required to invest that into another capital asset, for example a sports stadium.
"So you could reduce debt but will also see the impact on ratepayers is greater than if you retain that asset."
Canterbury Employers' Chamber of Commerce chief executive Peter Townsend told the radio station he hoped the council would keep its options open. "I would like to see an economic analysis."
Townsend said a continual rise in rates also made the city a more unattractive place for people to live.
Councillor Glenn Livingstone said selling assets would be short-sighted. "Once you sell an asset off how do you get it back? It's gone forever," he told Radio New Zealand.
The council's proposed rates increases are detailed in the council's draft three-year plan for the city.
The blueprint for the city - formally known as the proposed draft Christchurch City Three Year Plan - recommends rates rise by an average of 6.6 per cent from July.
The rates increase includes a special earthquake levy - the equivalent of a 1.93 per cent rate rise.
It translates to an extra $36.29 for the average ratepayer, to take effect from July.
The biggest cost facing the council is the repair and maintenance of the city's roads and footpaths.
The earthquakes have damaged 1000 kilometres of Christchurch's street network, of which 42km is severely damaged.
More than 50,000 individual road faults have been recorded on 45 per cent of roads in Christchurch.
Six bridges are beyond economic repair, 15 require major refurbishment and 50 require medium to minor repairs.
The council also needs to rebuild two sports and recreation facilities, the Town Hall, the central library and the Convention Centre, at a total estimated cost of $767m. It also has to replace several hundred of its 2645 social housing units.
The high costs coincide with a $1.5b fall in the city's rating base.