the case for whenuapai airport – why retaining whenuapai ...nzier report july 2003 counterfactual...

Submission to New Zealand Defence Force on Future Use of Whenuapai Airport Land

Waitakere City Council Enterprise Waitakere Infratil Limited Te Kawerau a Maki

The Case for Whenuapai Airport – Why Retaining Whenuapai Airport and Developing It for Commercial Use, with Ancillary Comprehensively Planned Commercial and Industrial Development, Is the Most Logical Future Use.

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That New Zealand Defence Force recommends to Government that the Waitakere City Council/Infratil proposal to develop Whenuapai Airport for commercial use, with associated industrial and commercial development is the most logical future use of Whenuapai.

Recommendation

Waitakere City Council Enterprise Waitakere Infratil Limited Te Kawerau a Maki

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The Crown has decided to vacate Whenuapai: Air force to shift to Ohakea over a 5 year period

The Minister of Defence is required to recommend to Cabinet by the end of March 2004 the most logical future use of Whenuapai, and the process for disposal of the airbase:

The Government is seeking feedback on what future use or uses of the site should be: New Zealand Force discussion document, October 2003.

This is the submission of Waitakere City Council and interested parties: Waitakere City passed 11 resolutions in December 2002

detailing its commitment to retain Whenuapai as an International and Domestic airport.

Waitakere City entered a partnership agreement with listed infrastructure investor Infratil Ltd, to provide the resources and expertise needed to transform Whenuapai from a military to Commercial Airport, with associated commercial and industrial development.

Enterprise Waitakere is a trust established to proactively encourage economic development within Waitakere City.

Te Kawerau A Maki is the mana whenua of Waitakere City

The loss to Waitakere City resulting from the Air Force leaving Whenuapai is estimated at $230 million pa including 1647 jobs and 826 families: NZIER report July 2003

Counterfactual compares it to surrounding rural residential.

Potential for significant social and economic disruption to a nascent City.

The loss is equivalent to 135% of the City Council’s annual expenditure

NZDF is Waitakere City’s largest employer

Besides mitigating those losses, Waitakere wants to use the opportunity to build a future economic generator for itself and the North Western sector of the Auckland region: Commercial Airports become economic generators by providing

enhanced connectivity to and from a defined region.

The Economic Impact of the US Airport Report, 2002 demonstrates the value of airports.

Commercial Airports attract commercial/private sector investment

Why destroy a valuable piece of infrastructure which has the potential to drive economic growth, improve traffic flows, employment and assist tourism?

Whenuapai is situated at the center of New Zealand’s fastest growing area: The North West Auckland Region is New Zealand’s fastest

growing now and for the future.

As many people live within a 16km radius of Whenuapai Airport (500,000) as do within the same radius of Mangere Airport.

Whenuapai already exists as Auckland’s second fully functioning International and Domestic airport: Why destroy a value enhancing piece of Infrastructure?

The cost and time to upgrade is modest in commercial terms, and well recognised by Infratil which is providing the development capital.

The opportunity cost to the Auckland Region of destroying Auckland’s second and functioning Airport is considered significant. The cost and difficulty of creating a second airport for Auckland in the future, at another location, would be immense.

Whenuapai as an airport can save the Auckland Region $341million in future transport costs: Auckland regional transport model used to measure.

Whenuapai is more conveniently located for at least half of the regions citizens.

The Whenuapai land has no strategic value to Waitakere City if it is not a commercial airport: Waitakere City’s and the Regional Growth Strategy already

identifies other areas of land for future industrial, commercial and residential use.

Land becoming available at Whenuapai as a result of the Air Force withdrawal has no strategic benefit for the city, unless a commercial airport is developed.

Unused Whenuapai Airbase will be a significant liability to the owners and to the City, possibly for decades.

Waitakere City’s development corridor is planned to proceed along the edge of the Metropolitan urban limit ( which Whenuapai is well outside) and along state highway 16 to the west.

If not retained as an airport the Crown or Waitakere City can not undertake any commercial or industrial development as a public work: A designated operational airport offers the widest range of

development options.

Waitakere City and Infratil’s proposal envisages commercial and industrial development associated with a commercial airport.

The Public Works Act disposal process must be followed if Whenuapai is not retained as an airport. It could be decades before anything is able to happen on the land, which also requires expensive remediation if it is not to be used as an airport.

It is estimated that to dispose of the runway would require the removal of 46,000 truckloads of concrete. This equates to 200 truck movements per day for a year.

There is uncertainty, delay and loss of control for the Crown and Waitakere City if airport operations cease and the Public Works Act disposal process is invoked.

The Case for Whenuapai Airport – Why Retaining Whenuapai Airport and Developing It for Commercial Use, with Ancillary Comprehensively Planned Commercial and Industrial Development, Is the Most Logical Future Use

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Whenuapai as an airport can redress economic loss to the North West Auckland Region and add more jobs than those being removed by the Crown: BERL report 2002

The Economic Impact of U.S. Airports, 2002

Mangere will face complementary competition: Mangere is a long haul airport charging aircraft on a weight basis.

Whenuapai will have a different model and the ability to relieve Mangere of the low value aircraft movements.

Competition must enhance the attractiveness of the region, and New Zealand to Airlines and travellers alike.

Competition will be good for both Whenuapai’s and Mangere’s customers.

The Whenuapai airport proposal represents a sound commercial model. The airline market is moving in the direction that Whenuapai will take: Low cost no frills air travel is a successful and profitable

business model

Regional short haul is strong for low cost no frills

Air travel is growing strongly, creating the need to build new airports and/or expand existing ones.

hub and spoke model increasingly complemented by point to point

Early stage positive interest from International Airlines.

Public support for Whenuapai as an airport is high: Recent region wide polls show strong public support for

an airport at Whenuapai

Whenuapai as an Airport provides positive assistance to the NZ Transport Strategy, the Tourism Strategy, and the Sustainable Cities programme: Tourism; Low cost no frills will be particularly important in driving

traffic from New Zealand’s biggest inbound market, Australia.

Tourist ventures in the north and west will benefit from an airport at Whenuapai.

Transport; $341m benefit for no input.

Sustainable cities; local jobs, less traffic congestion, less environmental impacts on the region.

Waitakere City’s local Iwi support Whenuapai’s redevelopment as an Airport: Te Kawerau A Maki, the city’s mana whenua, are strong

supporters of redeveloping the Airport, and have major concerns over intense urbanization of the land, especially in relation to their traditional “food basket” the upper Waitemata.

Partnership is essential for success: The Crown working with Waitakere City, and the Region will

maximise the economic and social opportunities and minimise liabilities and delay.

Infratil and Waitakere City are essential partners for success: Infratil is a respected international advisor and investor in

airports.

Infratil has access to capital, long term commercial vision, and international experience and success at Airport development, including mixed civil and military

Waitakere City has developed and implemented world class sustainable city policies and practices

Wellington Airport’s successful rejuvenation is a model to follow: The rejuvenation of the facilities at Wellington is a testament

to Infratil’s skill in the successful management of Airports.

Wellington Airport’s enhanced relationships with its neighbours highlight best practice behavior for a public/private infrastructure asset.

Only Development Dollars at risk are the commercial investor’s: Infratil will contribute all the development capital required.

Waitakere’s partnership with Infratil allows the City to contribute capital and acquire a shareholding only if it chooses to do so.

Infratil is realistic about the potential costs and capital it must provide for a successful redevelopment of Whenuapai as a commercial airport.

The 5 year phase down is a perfect window to test the thesis: It’s not unusual for military and civilian activities to co-exist,

with proper safeguards.

Any other use for the Whenuapai land could be decades away

Whether or not commercial operations can begin during the five year period, it makes sense to test the commercial airport model first, since choosing any other option involves destruction of the existing airport infrastructure.

The 5 year period allows time to test the commercial viability.

All other options still remain open if the commercial airport cannot be made to work.

The most logical future use for Whenuapai is:

As an Airport with ancillary surrounding Commercial/Industrial and Urban development.

The best process for disposal is: For the Crown to act both proactively and transparently in

partnership with Waitakere City and Infratil to produce the best outcome in a timely manner.

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REGIONAL POPULATION DENSITY

As many people live within a 16km radius of Whenuapai Airport as within the same radius of Mangere Airport

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Contents

Waitakere City Council Submission 7

1. Introduction 8

a) Air Force Leaving Whenuapai 8

b) Significant Economic Loss 8

c) What Is Required to Address these Losses? 8

d) Airports Are Catalysts for Economic Development 8

e) Partnership Approach with Crown 8

f) Connectivity and Competitive Advantage 9

2. Addressing the NZDF Discussion Document 10

a) Options 10

b) Considerations for Evaluation 10

c) Additional Considerations which NZDF Will Evaluate 10

d) Desired Outcomes 10

e) Waitakere City’s Objectives for Whenuapai 10

3. The Logical Choice for the Government 11

a) The Disposal Process 11

i) Disposal under the Public Works Act 11

ii) Creation of Airport under the Airport Authorities Act 11

b) Fragmentation of the Land has Risks and Cost to Waitakere Ratepayers 11

c) Local and Regional Planning Will Affect Outcomes 11

d) Commercial Airport Option Enables Reuse of Asset and Adds Value 11

e) Quick and Efficient Exit Process with Widest Options 12

4. The Case for Retaining the Existing Airport and Developing It for Economic Use 13

5. Economic 14

a) The Regional Economy 14

i) Prescriptions for Growth 14

ii) Collaboration Required 14

iii) Traffic Congestion 14

b) The Auckland Regional Economic Development Strategy 14

c) The Waitakere Economy 15

i) Local Jobs Required 15

ii) A Breakdown of the Waitakere City Economy 15

iii) Waitakere Growth Prospects 15

d) Whenuapai Airport 15

i) Complementing Current Development 15

ii) Connections with Other Cities 16

iii) Employment Opportunities 16

e) The BERL Report 16

6. Infrastructure 17

a) The Airport Already Exists 17

i) Challenging a Monopoly 17

ii) A Once Only Opportunity 17

b) Seeking to Leverage the Region’s Natural Advantages 17

c) The New Zealand Tourism Strategy 17

7. Strategic Fit 18

a) Consistency with Local and Central Government Policies 18

b) Government Initiatives for Auckland 18

c) Auckland Regional Growth Strategy 18

d) Regional Growth Strategy Implications for Whenuapai 18

e) Northern and Western Sector Agreement 20

f) Fastest Growing Region in New Zealand 20

g) Waitakere City’s Sustainable Growth Strategy 20

h) Population 21

i) Low Wage Work Force 21

j) Waitakere City’s Development Strategy 21

k) Waitakere’s 50 Year Development Vision 21

l) The Northern Strategic Growth Area 21

m) Metropolitan Urban Limit 21

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8. Transport 23

a) Impact on North Shore and Rodney 23

b) Traffic Demand Management 25

c) Public Transport Stimulated 25

d) Benefits to Regional Road Users from Having an Airport at Whenaupai 25

e) The Major Variables Affecting the Results Are: 25

f) Investing for Growth: the Government Transport Package for Auckland 26

9. Partnership 27

a) Cooperation and Collaboration Is Essential 27

i) New Local Government Powers and Responsibilities 27

ii) Working Together 27

b) Crown Decision Will Change Council’s Growth Planning 27

c) Existing Airport Gives Land Strategic Value 27

d) Existing Growth Management Framework 27

10. Experience 28

a) Commercial Partnership with Infratil 28

b) Airport Expertise 28

c) Ownership and Capital Resources 28

d) Relationship Track Record and Integrity 28

e) Experience With “Joint-Use” Civil- Military Airports 28

f) Waitakere City Council Experience 28

11. Defence Needs 29

a) Operational and Wider Security Needs 29

b) Civil Defence Issues 29

i) CDEMG 29

ii) Trained Resources 29

iii) Emergency Management 29

iv) Risk Management 29

c) Emergency Military Uses 29

12. Alternative Options 30

a) Public Work and/or Urban Development 30

b) Industrial/Development Site 30

c) Rural Residential Sites 30

d) Combination of the Above 30

13. Community Views 31

a) Public Opinion Surveys 31

b) Iwi 31

c) Business Community 31

d) Opposition to Proposal 31

i) Comment on Expressed Opposition 31

ii) Residents under Flight Paths 32

iii) Other Grounds for Opposition Revealed in TNS Survey 32

14. Conclusion 33

a) Recommendation 33

Supporting Submission of Infratil Limited 34

Supporting Submission of Te Kawerau a Maki 57

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Waitakere City Council Submission

Year commercial operations ceased at Whenuapai

People employed at Whenuapai

Number of years before the Airforce departs

Size of land of base

Kinds of aircraft using Whenuapai

Number of take offs and landings a year at present

Noise levels

How does the city recognise the airbase?

What is the underlying zoning of land?

Number of people living within 16km of Whenuapai

Number of people living within 16km of Mangere

Proportion of Waitakere residents who work outside the city

Who is providing the development capital?

1966

1420

5

311 hectares

Hercules, naval helicopters, Air Force 727’s, Fokker

22,000

Commercial aircraft are quieter than military aircraft and fewer flights are envisaged initially

Through the District Plan

“Countryside living”

453,000

442,000

60%

Infratil

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a) Air Force Leaving WhenuapaiFollowing a Cabinet decision to consolidate RNZAF activities at Ohakea, the Government has announced its decision to undertake a staged withdrawal of the Air Force from Whenuapai over a five year period.

The New Zealand Defence Force is conducting a consultation process on four main options for future use of the land. These include converting the airport to commercial use, public work/urban development, industrial/commercial uses and rural/residential. The Minister of Defence is required by Cabinet to recommend to Cabinet the most logical use of Whenuapai and the process for the disposal of the airbase by the end of March 2004.

b) Significant Economic LossWhenuapai Airport is located within Waitakere City. As a military installation Whenuapai Airport has contributed significantly to the social and economic well-being of Waitakere City for many years. The withdrawal of the Air Force will have a significant negative impact on the economy of Waitakere City, unless alternative uses are found to address this loss.

Waitakere City and its economic development agency, Enterprise Waitakere, commissioned the New Zealand Institute of Economic Research to undertake a social and economic impact assessment of the impending closure of the airbase.

In summary that report found the following:

The withdrawal of the Air Force will result in a loss within Waitakere City of $230 million per annum.

The loss of the Base’s 1,061 (full-time equivalent) jobs would result in the loss of an additional 586 jobs in Waitakere City. The two principal contractors employed by the Base expect to make 90 staff (75 full-time equivalents) redundant following its closure. Other local businesses are likely to experience a short-term decline in sales, until the houses currently occupied by Base staff are reoccupied.

c) What Is Required to Address these Losses?Making more industrial, commercial and residential land available is not the best way of mitigating this loss. The City is already planning to ensure that there is a staged release of industrial and commercial land in its planned new growth areas, which are identified in the Auckland Regional Growth Strategy.

Making land available at Whenuapai for these purposes will provide no particular reason for businesses to relocate to Waitakere City, other than those who would naturally relocate there anyway.

The NZDF wish to dispose of the Air Base provides a unique opportunity to use this asset in a way that attracts new businesses to the region through reuse of the existing airport asset as a commercial airport and for ancillary industrial and commercial uses. In addition to direct benefits generated by a commercial airport operation, this will stimulate economic development by the creation of a new competitive advantage for planned new and existing

commercial and industrial areas. For this competitive advantage to function, it is essential not to destroy the airport, creating bare land requiring considerable and costly remediation with no particular features to distinguish it from any other available land. Waitakere City already has plans for other areas to be used for industrial, commercial and residential activity which are consistent with regional policies to contain urban sprawl.

d) Airports Are Catalysts for Economic DevelopmentWaitakere City is an “edge city” characterised by its post-war suburban development with reliance on the motor car and the separation of the functions of a city, such as work-places remote from living areas. For Waitakere City this means that over 60% of its workforce commute out of the city for employment. Employment within the city is dominated by low-paying service type jobs.

Over the last 10 years Waitakere City Council has sought to attract higher-paying jobs to suit its predominantly blue-collar workforce through targeted cluster development centred around clear competitive advantages. This has begun the positive transformation to a higher rating base, which has allowed Waitakere City to fund a broader range of amenities at a higher standard.

Waitakere City’s primary objective is to develop an economy and society that supports sustainable urban development by reducing reliance on the motorcar, providing local employment opportunities and addressing the financially unsustainable situation of a City that has evolved without a solid commercial sector.

Commercialisation of Whenuapai Airport supports the Regional Growth Strategy and Central Government investment in Auckland transport infrastructure through the creation of local employment and local economic stimulation. This helps address the economic issue of Auckland’s urban sprawl and its effect on travel demand patterns.

Through a Crown decision to relocate from Whenuapai Airport, the city is now facing an estimated $230 million per annum in economic loss. Waitakere City is seeking the chance to reinvent a community through the reuse of an existing infrastructure asset.

To achieve this aim, the cooperation of central, regional and local government is required to implement a comprehensive plan for addressing the economic, social and environmental loss, in a manner that benefits the Auckland region and New Zealand as a whole.

The retention of Whenuapai as an airport is the only mechanism available to allow comprehensive planning and development over time within the existing national, regional and local planning frameworks.

e) Partnership Approach with CrownRecognising that it does not have the access to capital or other resource on a scale that would enable this to happen in the short term, Waitakere City has initiated a partnership with Infratil Limited, a listed Wellington based company to provide capacity and expertise in developing infrastructure alongside local government.

1 Introduction

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With private sector funding mechanisms in place what is now required is the development of a partnership with the Crown to more efficiently realise the value (of the asset and to the wider community) of the existing military airport.

f) Connectivity and Competitive AdvantageThe commercialisation of Whenuapai Airport will aid the competitive advantage of the North West of Auckland by adding an additional dimension of connectivity. Waitakere is the home of super yacht construction, TV production and film making. North Shore excels in electronics and ICT, Rodney District in horticulture and agriculture. Each of these sectors are export focussed, earn significant FOREX and rely on connectivity to their markets. These and other business sectors will be significantly advantaged by having an airport in their immediate area. Tourists both inbound and outbound will have a new point of access to the country and to the Auckland region and beyond forming a network of leisure and recreation, and benefiting tourist oriented businesses in the north and west.

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The NZDF discussion document identifies options for the site and describes both considerations for evaluation of the options, and a range of desired outcomes.

These are as follows:

a) Options Commercial Civilian Airport

Another Public Work and or Urban Development

Industrial/development site

Rural residential sites

A combination

b) Considerations for Evaluation

take account of NZDF operational and wider security issues;

protect the Government’s wider interests in the property;

use existing statutory processes in a transparent manner;

provide a quick and efficient exit process for the NZDF; and

provide a fair market return to the NZDF.

c) Additional Considerations which NZDF Will Evaluate Amenity, facilities

(Continued use of swimming pool, playing fields, golf course, availability of airfield for civilian flights).

Noise Disturbance

Impact on those living and working close to the airport.

Infrastructure Intentions and Plans

Impact of possible upgrade of sewerage services along Hobsonville corridor to cope with projected growth.

Environmental Considerations

Impact on the Upper Waitamata Harbour. Historical andarchitectural considerations. Views and appearance of the site.

Iwi and Maori Representation

Views of interested groups.

Local Economic Benefits

Contributions to local and regional economy and jobs.

d) Desired Outcomes Provide for the sustainable economic development of the north

west Auckland region and the Auckland region generally;

Be consistent with relevant government policies, including the New Zealand Transport Strategy, the Tourism Strategy 2010, and the Sustainable Cities Programme; and

Be consistent with other relevant or significant programmes in the vicinity of Whenuapai; such as Housing New Zealand Corporation’s Hobsonville initiative; planned highway and harbour crossing extensions and territorial authorities’ long term plans.

e) Waitakere City’s Objectives for WhenuapaiWith the closure of a large military industrial facility there are a number of issues of particular concern for the Council. These are as follows:

1. The social and economic impacts of the closure are addressed and mitigated.

2. The transition to future uses is commenced as soon as possible so that the adverse impacts of the closure of the base can be progressively addressed.

3. Future development of the land is carried out in a planned and comprehensive manner and maximises and compliments the future development of the Waitakere City’s Northern Strategic Growth Area.

4. Future development does not compromise Waitakere City’s or region’s growth strategy.

5. That a potential future economic growth engine is not lost without being tested.

6. The infrastructure liabilities that go with the land are addressed in a manner that allows for the ongoing use of physical resources without impacting on the ratepayers of the city. The existing infrastructure that services the base is past its economic life and likely to need replacing at an estimated cost of $20 to $30 million.

7. The Government and Waitakere City adopt a partnership approach to future use of the base so that protracted and unproductive litigation is avoided. The complex issues and liabilities that go with the land and potentially fall to the Council to address should the land holding be fragmented, need to be recognised by the government, and managed to avoid cost being passed to the City’s ratepayers.

8.The impacts of the closure of the military airport on the civil defence capabilities of the city and the region are considered and addressed.

9. The government makes a timely decision so that meaningful progress can be made in addressing the social and economic impact of the Defence Force’s departure, and so that the City can take into account implications for its long term development planning, and so that the community is given as much certainty as possible of the outcomes.

2 Addressing the NZDF Discussion Document

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The following sections will put the case for the airport’s retention and in doing so will respond to the evaluation considerations put forward in the NZDF consultation document. (However, some of these considerations can only be evaluated if fully developed proposals for an option are put forward and assessed under the Resource Management Act regime.) Preceding that is a brief review of the disposal options available to the Crown that have major impacts on the final decision that the Crown can make.

a) The Disposal ProcessThe NZDF document identifies a number of potential options for the future use of the land. However in reality the future uses of the Airport is determined by the disposal process as the government has stated that it will use existing processes to affect the disposal of Whenuapai.

Two options have been identified:

(i) Disposal under the Public Works Act.

(ii) Creation of an airport under Airport Authorities Act and transfer of the base under this mechanism.

i) Disposal under the Public Works ActThe Crown can decide if it wants the land for another public work, or dispose of it under the Public Works Act. There is effectively only one decision for the Crown to make under this legislation. Does it have another public work use for the land?

If the Crown decides that it does not have a public work requirement, then the local authority can decide if it requires the land for a public work. If the local authority does not require it for a public work, it develops the regulatory framework under which the land is developed. The Crown then loses control or influence over any future outcome under these existing processes.

ii) Creation of Airport under the Airport Authorities ActDisposal under the Airport Authorities Act to a local authority consortium, allows the Crown and the local authority to undertake comprehensive planning for the future of the site with the greatest options and the greatest level of control to achieve the outcomes identified in the Crown’s consultation document. Decisions to urbanise the land should the airbase be closed, including commercial or industrial uses, are not decisions that the Crown can make under the existing legislative framework, unless an airport authority is established and the Crown retains an interestin that authority.

In order to develop industrial or commercial uses, the Crown only has one option – the airport option. In order to achieve itsidentified outcomes, there is also only one option – that is to retain Whenuapai as an airport. By retaining Whenuapai as an airport, industrial and commercial uses ancillary to the primary airport activity can then be developed over time, in a planned and integrated manner, by virtue of the planning and legislative framework available under that option. The five year staged withdrawal of the airforce provides the opportunity for commercial operations to gain consent through the Resource Management Act process.

b) Fragmentation of the Land Has Risks and Cost to Waitakere RatepayersWithout the airport, neither the Crown nor a local authority can guarantee to undertake industrial or commercial development as a public work. The land must be passed to either former land owners, through the Treaty of Waitangi Settlement mechanism, or disposed of directly to the open market. Disposal through offer-back or to open market creates significant issues for the City.

Firstly, it presents some strategic development issues as the land sits outside the Region’s planned growth area and the ability to manage desired outcomes is constrained by the individual owner’s aspirations and the provisions of the Resource Management Act.

Also, the land has been held and developed by the Crown under regimes that have not allowed the Council to require financial contributions, or rates. If the land is disposed of under the Public Works Act in a manner that allows the land to be fragmented without regard to the residual liabilities attributable to the way the land has been legitimately developed and held by the Crown for Defence purposes, there are potentially significant costs that could fall on the ratepayers of Waitakere City. These would normally have been paid for by a developer or by the normal rating process but could now fall on Waitakere City ratepayers.

c) Local and Regional Planning Will Affect OutcomesAll non-public work or non-airport options rely on the local authority regulating land uses to achieve industrial, commercial or urban residential outcomes. Within a regional planning framework that sees the Whenuapai Airport land located outside the identified growth area for the City for at least the next thirty to fifty years, it would require a very compelling case for the regional and local authorities to depart from a regional growth strategy developed since 1993.

d) Commercial Airport Option Enables Reuse of Asset and Adds Value Only by retaining Whenuapai as an airport can ancillary industrial and commercial uses be developed around it.

Disposing of Whenuapai as an airport provides a different statutory planning framework by virtue of allowing the site to be designated for airport uses including those commercial and industrial uses ancillary to an airport. Mangere Airport sits outside the Metropolitan Urban Limit. Commercial and industrial development around this airport has provided significant competitive advantages to the growing businesses around it.

This process also provides the mechanism by which a smooth transition of uses can occur. It provides for commercial operations to scale up as military operations decrease.

3 The Logical Choice for the Government

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e) Quick and Efficient Exit Process with Widest OptionsThe Airport option is the quickest and most efficient disposal option because:

It has the least legal uncertainty and risk.

It allows the greatest deal of control for both the local authority and the Crown in partnership.

It creates the least problems in terms of the regional and local planning framework.

It provides for a managed transfer of the asset from Defence while providing for continued use.

It provides the most efficient method to address the infrastructure liabilities that go with the land.

It represents the least risk to Waitakere City Council

It represents the least risk to the Government.

It is the only option supported by Waitakere City Council.

.

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The Waitakere City case for commercialisation of Whenuapai Airport is covered in the following sections.

Economic – an economic engine for the whole North West Sector of the Auckland Region

Infrastructure – the airport infrastructure already exists

Strategic Fit – how only this option fits with the regional and central government strategic requirements

Transport – convenience, cost saving, congestion

Experience – Infratil, the Wellington experience

Partnership – the value of working in partnership

Defence Needs – keeping the options open

Alternative Options – consideration of alternative uses

Community Views – positions for and against the proposal

4 The Case for Retaining the Existing Airport and Developing It for Economic Use

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a) The Regional EconomyAuckland has been one of the fastest growing areas of the New Zealand economy over the past decade with real economic growth averaging 3.7 per cent, which is above the national average.

However, true economic growth requires that the total income of society must rise more rapidly than the population. A better target is per capital regional GDP growth. Over the last decade, the average growth rate of per capita GDP in the Auckland region has been below the national average.

i) Prescriptions for GrowthThere are two standard prescriptions for increasing the region’s growth rate. The first is to add more inputs (extensive growth). In other words, we need to add more workers or we need to add more capital equipment. The second prescription is to improve the efficiency of the production process (intensive growth). In short, do things smarter and better. It is this form of growth that fosters higher per capita incomes. Typically this means calls for innovation, better education, better infrastructure, better quality jobs.

Local and central government can facilitate the virtuous growth circle because it can provide some services at a lower cost than the private sector. Free market principles do not work in some areas, necessitating intervention. In such cases the benefits of activities are diffused through to the economy as a whole as the social rate of return of some activities, such as education, exceeds the private rate of return.

The challenge for policy-makers in both the local and central government area is to foster an environment conducive to stronger growth and living standards, while balancing social objectives at the same time.

ii) Collaboration RequiredGreater collaboration is required and a start has been made. For example, central government has recognised the need for a coordinated approach to economic development with closer integration between the various agencies involved. Central government and local government authorities in Auckland are coordinating activities in several workstreams under the banner of the Sustainable Cities Programme of Action, launched in Auckland earlier this year.

One of the workstreams includes joint central/local government implementation of the Auckland Regional Economic Development Strategy. Other recent regional initiatives have included the development of a Business Location Strategy and the formation of the Joint Officials Group to investigate transport funding in the Auckland region. The Tertiary Education Commission is also working with regional groups to promote a collaborative approach to skills provision in the region.

The key is to get the conditions right so that businesses can prosper. In looking at the Auckland region, some particular issues can be identified as restraining business prospects. These include congestion, a lack of co-ordination across interested parties, and skill shortages.

iii) Traffic CongestionTransport congestion remains the key bottleneck to growth. The economic cost of congestion in Auckland has been estimated at around $1 billion per annum. Improving the transport sector will provide a solid fillip to growth and enhance productivity, which, in turn drives up living standards.

Progress is being made. New trains have been purchased, the existing fleet has been refurbished, the Britomart Centre has been opened and improvements have been made to the infrastructure of the road system with, for example, the Grafton Gully product and the widening of the Southern Motorway between Symonds Street and the Newmarket Viaduct.

But more needs to be done in terms of adding to infrastructure, identifying appropriate pricing mechanisms and public transport initiatives. Whenuapai represents one such opportunity.

Stronger growth will, in turn, place pressure on land resources. Population growth may have positive implications for the economy, but Auckland’s rapid growth has exerted pressure on the land available in the region for residential and commercial development, transport and infrastructure. Any future development options recommending more residential and/or industrial development must be considered in this context.

The Auckland Regional Growth Strategy strongly promotes land use intensification to minimise the negative effects of growth. This involves concentrating growth around town centres and major transport routes to create higher density communities while ensuring that beaches and green spaces are protected.

b) The Auckland Regional Economic Development StrategyThe communities of the Auckland region are ready for sustainable economic development under a strategy which identifies where we are now, where we want to be in the future and how we are going to get there. The strategy not only communicates a set of priority activities, it provides a vision, leadership and direction to help guide decisions about how to use limited resources and how to manage conflicts and trade-offs.

The strategy framework combines eight elements which connect the region with the world through an outward focus and improved regional performance on a platform of exceptional people, cultures, environment and infrastructure.

Of particular interest to this submission are those strategies that focus on improving the Region’s connectivity with the outside World and encourage the building of relationships with and success in, overseas markets. Initiatives that attract Foreign Direct Investment in key sectors and that link priority industry sectors with key markets.

The region’s growth is dependent on its export performance. Therefore the strategy encourages dynamic, well-prepared companies which are exporting successfully and focuses on companies and sectors with the potential to lead improved export success.

5 Economic

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In summary, productivity growth remains critical to raising living standards. Population enhanced growth does not add materially to living standards. While the pie expands so do the numbers seeking a slice. Over the past decade, the Auckland region’s out- performance of the national average has come entirely from population growth rather than doing things smarter. If the Region is to continue to prosper it needs to manage limited resources, infrastructure, education of workers and the nature and way it does business, better.

c) The Waitakere Economyi) Local Jobs RequiredWaitakere City accounts for 15% of the Auckland Region’s population, but generates only 8% of the Region’s gross domestic product and jobs. Because of its lower ratio of jobs to population, more than half of the Waitakere work force still commutes to jobs in other Cities of the Region. This creates a variety of negative economic, environmental and social impacts. The City needs to generate more local jobs, which means it needs more economic development.

ii) A Breakdown of the Waitakere City EconomyUntil recently the City was mainly a mixture of agriculture, horticulture, dormitory suburbs and a small manufacturing sector. Population growth and urban sprawl have stimulated local retail, construction and service industries but displaced more added value sectors such as agriculture and horticulture. Manufacturing has been gradually declining while the services sector generally has been growing as it has been globally.

Most of the 11,500 businesses in Waitakere City are in the service sector. Within this sector, business and financial services, construction and retailing have the greatest number of businesses accounting for 68% of all businesses located in the City. This in itself presents a fundamental challenge to the local economy as these industries are more prone to the affects of market volatility.

Manufacturing accounts for 10% of Waitakere City businesses with just over 1,000 business units. Waitakere manufacturers are particularly strong in textiles and clothing, wood and wood products, paper products, plastics and boat building. The clothing and textile sector has been impacted significantly by the removal of tariffs over the past 5 years.

Property and business services has the highest number of business units in the City with 25% of the total but employ only 10% of the City’s working population.

The West is well known for its long association with viticulture and horticulture, however, with the increasing urban sprawl many of these businesses have moved elsewhere in the region/country.

Waitakere City’s economic fortunes are closely linked to the success of the Auckland Region as a whole. However, Waitakere City businesses tend to be smaller and less export focused, leaving them more susceptible to change in local and regional conditions. Waitakere City retailers and service providers depend heavily on the spending power of local customers employed in

other parts of the Region. Most businesses deal directly with the public, with only 31% selling mainly to other businesses.

iii) Waitakere Growth ProspectsDevelopment prospects for a modern economy depend on the quality of the workforce and the tools they have available. Specifically, an educated workforce and access to information, communication technology and connectivity are crucial. Business size and type also affect the prospects of the economy to adapt to changing circumstances and requirements. The reality is the Waitakere City economy has not performed well in these crucial areas impacting negatively on the City’s overall economic performance.

Waitakere City is on Auckland’s periphery, so a key requirement is transportation links for goods, customers and employees both inbound and outbound. After a period of negative growth the Waitakere’s economy expanded 1.7% over the year to March 2002 and while the economy expanded further to March 2003 this still lagged significantly behind the regional growth.

Factors impacting on the City’s growth prospects have been:

The defence sector declining

Some labour intensive industries relocating overseas

The slow recovery of the construction industry despite rising house demand

The industries that are growing rapidly are still relatively small

The City needs to improve its accessibility to markets in order to present investors with a valuable point of differentiation.

In response to this situation the City Council has developed a draft Economic Development Strategy which integrates with regional initiatives and specifically sets about addressing some of the fundamental issues/weaknesses impacting on the City’s economic performance. A copy of this draft strategy is attached.

The strategy acknowledges the importance of Whenuapai airport to the health and wellbeing of the City.

d) Whenuapai Airporti) Complementing Current DevelopmentThe development of a commercial airport at Whenuapai will complement the development of the economies in Rodney District, North Shore City and Waitakere. It will complement the Housing New Zealand planned development at Hobsonville, through supporting local job creation. It will also complement the planned significant commercial and industrial centres within the areas of Waitakere already identified for urban growth. Redeveloping the airport land for other purposes will make it extremely difficult for the Auckland region to ever develop a second airport given the near impossibility of acquiring sufficient land in an appropriate area and obtaining the necessary consents for a new airport.

The success of modern economies relates directly to the degree that the economy connects to the outside world via networks. Networks need to be viewed in “multiple ways”; physically, socially, locally, regionally, globally, between knowledge and creative

16 17

business, and virtually, through telecommunication technologies. An airport provides another level of connection. A commercial airport is an important piece of infrastructure that will supplement and support and develop the nascent economy of Waitakere City and the north west region.

ii) Connections with Other CitiesThe Whenuapai area is well connected with other regional business centres and in particular connects the creative trades workforce of the Waitakere area, the hightech industries of North Shore City, and the agrarian export sector of Rodney District. The Whenuapai site provides an opportunity to specifically design, develop and integrate an economic hub, and a gateway into nearby business areas. Over time industrial and commercial activities ancillary to the airport activity can be developed, but only if a commercial airport is given the opportunity to develop.

A commercial airport would help attract and develop targeted clusters of businesses in the planned new growth areas of Waitakere City, North Shore and Rodney District. It would help raise the profile of the area by giving it an international address, which will make it attractive to businesses with an export focus. It will also facilitate trade exports within the Australia/Pacific region by introducing competition into the airport market.It may also assist with the attraction of foreign direct investment.

iii) Employment OpportunitiesWhenuapai Airport and related developments will create major employment opportunities and generate financial benefits. There is significant global evidence that airports generate jobs not just at the airport, but also encourage the nearby location of industries that benefit from close proximity to such ports (for example see appended Airport Council International Report).

It is relatively simple to switch from the present military airfield to a civilian one. All of the other options advanced are likely to cost more than developing the airfield, could be located elsewhere, will not deliver comparable benefits, or cannot be readily and certainly achieved due to the complex disposal procedures required for the land to be used for anything other than an airport. Importantly, only the commercial airport option has the ability to directly and quickly mitigate the impacts of NZDF’s withdrawal from the City.

Whenuapai would add considerable marginal economic benefit to all those existing businesses within a 16km radius.

e) The BERL ReportIn July 2002 Business and Economic Research Limited (BERL) undertook a study of the potential benefits of a rejuvenated Whenuapai Airport (see appendices). The report found that the direct impacts of additional inbound overseas visitors to the region could generate up to 1,200 FTE’s, with an additional 800 FTE’s as a result of the airport operation itself. The report also identified the potential of Whenuapai to expand the infrastructure base of the north west sector of the Auckland Region providing new dimensions and a growth node for economic activity and development. Commercial operations at Whenuapai would provide a major stimulus to business service enterprises to locate in the “Northern Growth Zone” as well as a major boost to tourism, technical jobs, and logistics industries.

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a) The Airport Already Existsi) Challenging a MonopolyAuckland has only one operating commercial airport, located at Mangere, a location which has become increasingly difficult to access, particularly for passengers from the fast growing north and west of the Auckland region. These customers can spend twice as long getting to Mangere airport as flying from Mangere airport to Wellington.

Mangere is a monopoly, owned and operated by a company whose principal motivation is to deliver the best possible returns to its shareholders. Predictably, Auckland International Airport Ltd opposes the development of a competing commercial airport at Whenuapai. Nor is it likely to contemplate creating a second airport elsewhere in the region. Its plan to cope with growth is to build a second runway at Mangere, at a cost of several hundred million dollars. Monopolies commonly attempt to exploit their monopoly position, particularly if the barrier to entry for a potential competition is very high, as would be the case if another operator had to acquire land and build a new airport.

ii) A Once Only OpportunityThe withdrawal of the Air Force from Whenuapai Airport creates a once only opportunity to establish a second commercial airport for the Auckland region for a fraction of the cost that would otherwise be involved, by making best use of existing assets. It is not a simple issue of providing sufficient capacity to handle all commercial flights for the next 50 years. Whenuapai Airport will complement the capacity of Mangere in a manner which provides the best outcomes and choices for the Auckland region, including competition, more desirable traffic flows, and greater convenience.

This is not an issue about whether or not another airport operator can build new facilities to meet future demand. It is about using an existing resource as a catalyst to enhance the economic growth of north west sector of the Auckland region, retaining and developing an airport in a location more convenient for half the people in the Auckland region, and creating valuable benefits in terms of regional transport flows and as an attractor to business.

Testing the viability of a commercial operation is the most sustainable use of an existing resource. This is not an argument about whether Auckland needs a second airport. A second airport already exists. It is about making the most efficient use of an available resource and finding the most appropriate mechanism to transfer this infrastructure and land from military to civilian uses.

A second commercial airport for the Auckland region is in accord with the Crown’s program to address regional infrastructure generally, specifically on measures which reduce congestion on the roads, but more generally on strengthening the tourism and transport infrastructure of New Zealand with greater public control to ensure their continuity of service.

b) Seeking to Leverage the Region’s Natural AdvantagesWhat Waitakere City is actively seeking to generate at Whenuapai is not just a viable commercial airport but a development which

leverages natural advantages. The existence of a functioning airport at Whenuapai provides the critical point of difference for a networked urban form that retains and strengthens the elements of harbour life and lush setting, social cohesion and amenity, and economic dynamism and infrastructure efficiency.

Compared to this, the alternative of destroying a functioning airport and facilities to create more bare land in Waitakere City would be an unexciting outcome, creating ownership and planning and liability issues that are likely to see the land remain unused for decades.

c) The New Zealand Tourism StrategyTowards 2010: Implementing the New Zealand Tourism Strategy identifies six fundamental components focusing on the sustainable development of tourism in New Zealand, including:

Focusing on quality

Sustainability of infrastructure

Ensuring the sustainability of natural, business and social environments.

The strategy identifies that providing the infrastructure required to support tourism growth and development is a key challenge to the long term sustainability of the tourism industry. One key aspect of this infrastructure will be air services to ensure tourist access to and within New Zealand meets market demands both now and into the future. International visitor arrivals are growing at an annual average rate of over 6%. This means tourist numbers could easily double in 10 to 12 years.

A commercial airport at Whenuapai has the potential to widen the tourism base of the country, especially as the airport will help to attract budget airlines. It also provides an alternative entry point to the Auckland Region, close to many iconic landscapes and experiences upon which New Zealand tourism is marketed, such as the west coast beaches. Alternative uses for the air base will not generate the same benefits as a commercial airport. Residential and rural residential development will not assist with meeting the objectives of the Tourism Strategy.

6 Infrastructure

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a) Consistency with Local and Central Government Policies

The NZDF consutlation document notes that the decision to be made by the Government must be consistent with relevant government policies. Waitakere City as the Territorial Local Authority involved must further ensure that any proposal fits in with its objectives and those agreed by the Auckland Regional Council.

b) Government Initiatives for AucklandThe Government announced on 19 December 2003 major funding initiatives and changes to governance structures to address Auckland’s transport crisis. Transport issues in the regional have been identified as a major impediment to sustainable economic development.

The Government’s “Beehive” official web site contains a fact sheet on “Auckland Transport and Governance and Regulatory Issues” which states:

“The Government will engage expeditiously with the ARC to discuss a change to the Auckland Regional Policy Statement to reflect key parts of the Auckland Regional Growth Strategy and the Auckland Regional Land Transport Strategy in order to give clearer guidance about transport priorities and integration with land use policies, and greater certainty in the consideration of resource consents for key Auckland transport projects”

The Auckland Regional Growth Strategy proposes strengthening of the regional urban form. Central government is recognising that continual urban expansion places unsustainable demands on the Auckland Transport Network, and that there is a strong linkage between land use and travel demand patterns.

Two of the options put forward in the NZDF consultation document; Public Work/Urban Development and Industrial/Commercial uses, are contrary to the regional growth strategy and would encourage urban sprawl. The Airport option supports the Government’s initiatives by changing travel demand patterns:

As an airport it provides an alternative destination to Mangere and therefore spreads demand across the network more efficiently.

As an economic growth engine it stimulates economic development in an area where the majority of the workforce leave the city to travel to work each day.

c) Auckland Regional Growth StrategyThe Auckland Regional Growth Strategy: 2050 is a response to the rapid and unrelenting population growth of Auckland, and the pressures this places on the infrastructure and natural resources of the region.

The history of Auckland is one of rapid growth and change and the Auckland Regional Growth Strategy seeks to set the direction for the region’s future urban form. It was developed through the 1990s through a consensus building process with Auckland’s local authorities and seeks to contain the outward spread of the metropolitan area so as to protect and enhance the values and qualities that make the Auckland Region a successful living and working environment. To achieve this, the strategy proposes containing the growth of the urban area of the region and promoting

selective intensification. The strategy also highlights the importance of partnerships between central and local government in ensuring the success of the strategy. The Regional Growth Strategy is a non-statutory document but has been reflected in the Auckland Regional Policy Statement and it is clear that central government seeks to strengthen rather than weaken this planning.

d) Regional Growth Strategy Implications for WhenuapaiThe strategy has significant implications for the future use of the Whenuapai Airport in terms of:

Residential development

Employment

Infrastructure

The overall ability to manage the effects on the environment of urban development.

To promote the containment of urban activities, residential develop-ment is being focused around selected centres and transport hubs. This process is occurring quickly in the North-West, as well as other parts of the Auckland Region. A significant amount of this intensive development is occurring on brownfields land (old industrial areas). Mixed use, intensive development on such brownfields land makes sense where such development is located close to transport routes, but a consequence of the policy is that some industry is now looking for peripheral sites.

Other trends are also pushing some industry to the edges of the metropolitan area. An important trend is businesses seeking accessible sites on the motorway network, away from the congested inner isthmus.

For Waitakere City these trends are recognised in its planning for the Northern Growth Corridor (the area extending from Massey in the west to the Upper Waitemata Harbour to the east). A significant proportion of the land Northern Growth Corridor is identified for business activities, partly to off-set the conversion of business land to residential activities around Henderson and New Lynn. The planning for the area also recognises the importance of State Highway 18 and the “ring road” role of this piece of infrastructure.

It is Waitakere City’s policy that priority will be given to the release of new urban land that contributes to the economic development of the City. Land for residential activities in the Northern Growth Corridor is unlikely to become available for at least 7 years, unless it occurs as part of a mixed use development that supports the City’s “Urban Village” development philosophy. The City wants to ensure that the social and economic infrastructure (and land to support this) is in place before allowing wider urbanisation to occur. This is to ensure that the suburban sprawl that has characterised the City’s development in the past does not continue in its new urban areas, and that local jobs are created to support its existing residential population. This policy is entirely consistent with the Auckland Regional Growth Strategy and Auckland Regional Policy Statement and therefore supports the Crown’s initiatives to strengthen the Auckland Regional Policy Statement.

7 Strategic Fit

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AUCKLAND: A DYNAMIC REGION GROWTH CONCEPT 2050

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Whenuapai Airport is not part of this Northern Growth Corridor. Residential and rural residential development of Whenuapai poses significant risks to the Auckland Regional Growth Strategy and the planning for the Hobsonville Corridor. Residential development would be to the north of the proposed Metropolitan Urban Limit (SH 18), raising issues of unconstrained growth. It will also see a significant population cut-off from the retail, community and service activities on the southern side of SH 18.

e) Northern and Western Sector AgreementThe Northern and Western Sector Agreement provides further detail on how the Regional Growth Strategy is to be implemented. The Agreement sets out how allocated growth capacities for these sectors are to be accommodated in the next 20 years. The strategy identifies a number of growth opportunities. The agreement identifies a shortage of business land in Waitakere City, and the need for additional areas to be identified and released to support economic development initiatives.

The agreed principles of this strategy are:

To recognise the need to protect future transport options now

To recognise their distinctive and shared competitive advantages which can be built on to promote economic development

To promote good spatial distribution and a range of employment opportunities at different skill levels

To recognise the current role of the Whenuapai base and to keep options open for its future use

The only future use of Whenuapai airbase which supports all these agreed principles as deliverable outcomes is to retain Whenuapai Airbase as a functioning commercial airport.

f) Fastest Growing Region in New ZealandCollectively the North West sub region of Auckland is the fastest growing area in the country. By 2050 it is projected to have a population of 800,000 while the population of the Auckland Region as a whole is projected to be 2 million.

One of the major issues this presents is the relationship with travel demand patterns and the ability to provide employment locally.

Currently the majority of the future supply of commercial land is located to the south of the North West region. Job creation is below labour force supply. If this is to continue, Auckland will face continued pressure on it’s roading network as a large proportion of the North West work force commutes through the narrow isthmus each day to work.

While Waitakere City is planning for significant employment areas in it future urban areas, one of the challenges is to create a competitive advantage to attract business to these locations, as well as locations in the wider north west region. The proposed options of rural residential sites, or industrial/commercial development, do not create competitive advantage to attract businesses to this location. Only the regeneration of Whenuapai airbase into a commercial airport achieves a competitive advantage for the north-west sufficient to sustainably attract new business.

g) Waitakere City’s Sustainable Growth Strategy Waitakere City was created in 1989 as a result of local government amalgamations of the former Boroughs of New Lynn, Glen Eden, Henderson and Waitamata. It is a young city characterised by suburban development and the lack of an economic base.

The land area of Waitakere City is 39,134 hectares. Approximately half of the City is open space including the regionally significant Waitakere Ranges. Much of the expansion of Waitakere City

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WAITAKERE CITY’S NORTHERN GROWTH CORRIDOR

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consolidation. This strategic direction is fully consistent with the Auckland Regional Growth Strategy.

k) Waitakere’s 50 Year Development VisionWaitakere City Council has indicated a long-term vision for the City that includes:

protection of environmental features

promotion of community wellbeing

economic development

innovative solutions to development issues

provision of public transport systems

For the Northern Growth Corridor this means in particular that there is an emphasis on balanced development, with an initial focus on attracting economic development activity and securing land for the social and economic infrastructure that is necessary to create a balanced urban environment. A significant challenge for the City is how land for economic and social activity is preserved and protected from residential encroachment.

l) The Northern Strategic Growth AreaWaitakere City’s Northern Strategic Growth Area is an area of some 3000 hectares currently in mainly rural land uses. It borders Rodney District Council to the west and the Upper Waitemata Harbour to the north and east.

The Auckland Regional Growth Strategy has signalled that certain areas of the Northern Strategic Growth Area are suitable for urban development in the future and these areas are the focus of the City’s planning for urban expansion. The Northern Growth Corridor is the area that has been agreed “in principle” for urban development and is located generally south of the proposed State Highway 18 motorway and west of Don Buck Road.

The Northern and Western Sectors Agreement is the Regional Growth Strategy implementation document that provides a growth management framework for Rodney, Waitakere and North Shore City. It was signed in October 2001 and provides a local level framework for the implementation of the Auckland Regional Growth Strategy. So far detailed planning has been undertaken for parts of the Hobsonville Peninsula, the Hobsonville Corridor, and Massey North/Westgate. The city’s focus in the Northern Growth Corridor is to prioritise land uses that promote economic development.

m) Metropolitan Urban LimitThe current Metropolitan Urban Limit runs along Hobsonville Road and excludes the Hobsonville Peninsula, Hobsonville Corridor, Massey North and Redhills areas. Through the Northern and Western Sectors Agreement, the Auckland Regional Council has agreed in principle that it could be moved to the new SH18 alignment to provide for future urban growth over the next 20-30 years. However there has been no formal application yet and no determination at this point by Waitakere City Council as to where the Metropolitan Urban Limit should be located or the staging of new urban land releases. It will be a protracted process to move the

has occurred in the last 20 years, with urban growth expanding outwards from Henderson, Te Atatu and New Lynn and at the urban fringes. It is projected that 74.3 percent of New Zealand’s total population growth in the next 19 years will take place in Auckland. The urban environment of Auckland has changed significantly over the last 20 years and will change significantly over the next 20. Managing this growth and providing infrastructure in a sustainable manner will require hard decisions. If present trends continue to the year 2050, Waitakere City’s population will double to approximately 300,000 people.

h) PopulationWaitakere City’s population was assessed at 168,753 at the 2001 census and is projected to increase to 237,100 by the 2021 Census. A quarter of its population is under the age of fifteen and a third of its residents are under the age of 20. It is one of the three local authorities of the Auckland Region that are collectively known as the North Western Sector. The North Western Sector is the fastest growing sub-region of the Auckland Region.

i) Low Wage Work ForceAlmost half the jobs in Waitakere City are in low wage employment categories such as hospitality and manufacturing. Not only does Waitakere City have the lowest level of personal income of all Cities in the Auckland Region but also of the eight largest cities in New Zealand as well. Around 60 percent of the city’s labour force leave the City each day for employment.

The cost of transport is as significant barrier to finding employment to those who are unemployed. There is also an economic and social cost for time spent travelling to and from employment.

j) Waitakere City’s Development StrategyThe Council adopted the international Agenda 21 program in 1993 which has significantly influenced its development strategy, and it policies. The Council has worked collectively with the region on the development and now the implementation of the Auckland Regional Growth Strategy. The Council’s strategy is to encourage the development of a compact City based on the understanding that continual expansion of the urban boundary does not constitute sound management of the environment, nor does it produce cohesive communities. This strategy has begun the process of evolution of Waitakere City from a series of dormitory suburbs, to a City with defined town centres surrounded by suburban and rural lifestyles. The key factor in this evolutionary process is to grow the local economy in order to provide local employment opportunities and to provide a balanced financial basis for the City’s development.

The Council developed its strategic direction for the City in the mid 1990s. The City’s strategy is to intensify urban development in and around the three town centres of New Lynn, Henderson and Massey North/Westgate, and along major transport corridors such as Lincoln Road. The strategy includes a range of related programs, including protection of the Waitakere Ranges from urban encroachment, and investment in town centres supported by investment in roading and public transport networks to support

Metropolitan Urban Limit, which would involve a statutory process to change the Auckland Regional Policy Statement and the Waitakere City Proposed District Plan.

Whenuapai is significantly outside the metropolitan urban limit. Any development other than that associate with an airport would be contrary to the Regional Growth Strategy and is unlikely to occur for decades. A vacated and disused Whenuapai Airport has no strategic importance to Waitakere City or the Auckland Region.

If airport activities do not continue, the Whenuapai Airport land and surrounding areas will likely remain countryside, Rural Residential, for decades. However the remnants of the airport would be a significant liability for the future.

a) Impact on North Shore and RodneyDeveloping a commercial airport at Whenuapai will produce beneficial transport outcomes in the local area and the overall Auckland region.

In the local area, including Rodney and North Shore, it will be easier for people and businesses to access and for inbound travellers to access the north west sector, without having to travel through the congested Auckland Isthmus.

By creating more employment at Whenuapai and within the north west 16km radius, an airport associated with a new industrial/commercial complex will reduce the number of people traveling into and through the isthmus each day. It is the policy of Waitakere City, North Shore City and Rodney District Council to foster the creation of new employment opportunities within the district so that fewer people are forced to travel outside the district to find employment.

Some people in the north west can spend as much as two hours traveling to and from Mangere Airport at rush hour, adding to the general traffic congestion on motorways, the Harbour Bridge and suburban roads. Similarly visitors to Auckland’s North West, who have come by air, are forced to travel through the congested isthmus. The development of a commercial airport at Whenuapai will help ease congestion, create greater efficiency and save transport costs. About half the people in the greater Auckland region live closer to Whenuapai Airport than to Mangere.

The development of Whenuapai into a commercial airport with associated business activity involving no local body contribution of development capital would favourably change traffic patterns in the region and contribute to reducing congestion, increasing network efficiency, and increasing the efficiency of the Crown’s transport investment in motorways across the Auckland region but specifically in State Highway 18.

8 Transport

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WHENUAPAI AIRPORT TRANSPORT ROUTES

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b) Traffic Demand ManagementThe Auckland Regional Land Transport Strategy 2003 identifies Traffic Demand Management as a key project shaping the region. This includes land use considerations and the effect these have on the transport network. Traffic Demand Management includes a number of measures that are intended to influence travel patterns so that existing infrastructure is used more efficiently. It is in this area of changing the transport demand patterns incrementally over time that Whenuapai is likely to have the most significant transport benefits.

The Auckland Regional Land Transport Strategy identifies that eight million passengers travel though the Mangere airport annually (it is understood that this is a 2001 figure and that current throughput is in the vicinity of 10 million passengers), with an expected increase to around 18 million people a year by 2010. This equates to an annual rate of increase of 9.5 % per year over these years.

Mangere Airport is a strategic piece of privately owned infrastructure. The costs of an increase in passenger throughput at the airport on the regional transport infrastructure is borne by the taxpayers of the country and the ratepayers of the region. Improvements to the network feeding the airport are costly and difficult due to the geography of the Auckland Isthmus and the availability of, and value of, land and existing land uses. While commercial operations at Whenuapai will not provide the complete answer to this problem, by providing an alternative destination for airline passengers, and creating employment throughout the wider north west region, it provides an opportunity to significantly influence the traffic demand pattern.

c) Public Transport StimulatedA commercial airport at Whenuapai has the potential to stimulate both the supply and demand of public transport services. It is conceivable that a ferry service could be established to the Whenuapai area from Central Auckland. The region is already planning multi-million dollar investment in upgrading existing ferry infrastructure and new services. In addition the planned State Highway 18 has provision for a dedicated rapid transit system, and the north western rail line could conceivably be extended to Whenuapai (a few kilometres over flat land).

d) Benefits to Regional Road Users from Having an Airport at WhenaupaiAs explained above, Whenuapai is likely to generate the most significant transport benefits by changing the transport demand patterns throughout the region incrementally over time. Transport planning consultant David Young has carried out preliminary traffic modelling work to estimate the magnitude of benefits to the regional transport system that could be obtained by a commercial airport operating at Whenuapai. (See appendix)

The traffic modelling compares the costs of operating the total regional roading system with and without a commercial airport at Whenuapai. The Auckland Regional Transport (ART model) has been used to calculate these vehicle travel costs. The existing Airport sub-model of the ART model has been modified to reflect a

new airport at Whenuapai. Any reduction in total transport costs over the region is a benefit deriving from Whenuapai operations.

The ART model incorporates all expected changes to the regional road system, regional land use, population, etc up to 2021. The model itself is run from the year 2011 extrapolated out to 2035. Benefits are attributed to the region’s road users based on the value of time and fuel saved from reduced congestion and shorter journeys.

e) The Major Variables Affecting the Results Are: The assumed pattern of flight-related traffic going to and

from Whenuapai from throughout the region

The assumed rate of growth of air transport and hence flight related traffic

The percentage share of total regional air traffic that is captured by Whenuapai

The rate of development in the Waitakere Northern Strategic Growth Area

The Base-case assumptions for the above variables, in each of the modeled years from 2011 to 2035, are:

100% of the households and businesses in the Rodney, North Shore and Waitakere areas consider using Whenuapai commercial airport. But only 50% of Auckland City and 20% of Manukau households and businesses consider using Whenuapai.

The assumed rate of growth of air transport and hence flight related traffic is 4% per annum, consistent with the regional growth rate of 3.7% from 1995-2002.

The percentage share of total regional air traffic that is captured by Whenuapai is 15%.

The rate of development in the Waitakere Northern Strategic Growth Area is as indicated in the Northern and Western Sectors Agreement of the Regional Growth Strategy for 2021. i.e. there is no accelerated growth outside the proposed Metropolitan Urban Limit as a result of the airport development.

The values of time used to calculate benefits to road users are:

– Morning peak $14.40 / hour

– Interpeak $17.85 / hour

– Evening peak $13.75 / hour

Vehicle operating cost savings are valued at $0.20 per kilometre.

26 27

Under the Basecase assumptions the benefits to road users of having a commercial airport at Whenuapai are valued at $341 million (2011 Net Present Value discounted at 10% per year from 2035).

Variations to the Basecase assumptions for the rate of growth of air traffic, and the percentage share of the market captured by Whenuapai, give the following results:

ASSUMPTIONS

Annual regional passenger

growth rate (%) 3 4 5

Regional flights allocated

to Whenuapai (%) 15 20 15 20 15 20

Results –

Net present Value at 2011 discounted from 2035 at 10% p.a.

$ Million 228 282 341 382 477 583

f) Investing for Growth: the Government Transport Package for AucklandAn important objective of the Government’s announcements (19 December 2003) for Auckland transport is the more efficient use of Transfund NZ and Transit NZ taxpayer spend in new transport infrastructure. As noted earlier, ameliorating traffic congestion around Mangere Airport would require significant new transport infrastructure spend. Whenuapai Airport will draw a measurable flow of traffic away from the south of the Auckland Isthmus. This will delay the necessary infrastructure spend in the south of Auckland needed to cope with this traffic growth.

With Transit NZ’s planned completion of State Highway 18 parallel to Whenuapai Airport by 2007, the government can use existing spend to positively alter traffic flows across Auckland at no further cost. This Benefit would also require no funding from the proposed Auckland Regional Transport Authority to be realised.

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a) Cooperation and Collaboration Is Essentiali) New Local Government Powers and ResponsibilitiesRecent amendments to the Local Government Act have broadened the constitutional power of local government and provided a greater role for local government in planning and delivering on their community’s needs and wants. This has been a deliberate shift from giving local authorities specific functions to giving them general powers and an increased ability to use their discretion on what is best for their communities.

Under various legislation, but specifically the Local Government Act and the Resource Management Act, the Crown has conferred upon territorial local authorities the responsibility for planning and decision making to promote the social, economic, environmental and cultural well being of their communities and to promote the sustainable management of the resources within their districts.

ii) Working TogetherThe NZDF consultation document has identified a number of possible outcomes. Waitakere City is able to assist the Crown in delivering its outcomes, while as the territorial authority Waitakere City has outcomes it would also like to achieve. In this regard the Waitakere City Council is not just a stakeholder in the process. It is a democratic institution, with elected representatives elected from its community with a mandate to plan for the development of its city in the interests of its community.

Adopting a partnership approach with Waitakere City and a high level of cooperation and consultation between the government, neighbouring local authorities, local iwi and the regional council is the key to achieving the outcomes identified by the government.

b) Crown Decision Will Change Council’s Growth PlanningWaitakere City’s plans for new urban growth have been centred on the creation of a new town centre at Massey North/Westgate. Those plans include the creation of a mixture of activities including commercial, industrial and retail activities as well as residential activities.

With the Crown’s decision to vacate Hobsonville airbase, and now Whenuapai Airport additional options have become available because of the opportunities to stimulate economic development inherent in this land. The deep water access afforded at Hobsonville Airbase has resulted in plans for the creation of a marine industrial park. Whenuapai creates the opportunity to stimulate economic development throughout the north west of Auckland, but more particularly in the new growth areas of the city.

Planned comprehensively with the cooperation of central, regional and local government, the economic, social and environmental benefits will substantially increase, to the benefit of Auckland and New Zealand as a whole.

c) Existing Airport Gives Land Strategic Value If Whenuapai had not been developed as an airport it would just

be another piece of land located outside Waitakere City’s and the region’s planned growth area. It would have no advantages to distinguish it from any other area outside of the planned new

urban limits. If it is not continued to be used as an airport it represents a significant liability, with an estimated 46,000 truck loads of concrete (or 200 truck movements per day for a year) to be disposed of, (comprising the runway), and an estimated $20-30 million of infrastructure liabilities. Who pays?

Waitakere City, in conjunction with it economic development agency, Enterprise Waitakere, commissioned a report on the closure of the airbase (NZIER Report, see appendices). That report concluded that there would be an annual loss of $230 million with a further $20 million to the Rodney District and North Shore City.

d) Existing Growth Management FrameworkPlanning for growth in Waitakere City has occurred within the framework of its own consolidation strategy and eco-city principles, and within the regional planning framework. Planning for urban expansion is undertaken in a cooperative manner with the Auckland Regional Council and the Local Authorities of the region and is controlled though the imposition of Metropolitan Urban Limits through the Auckland Regional Policy Statement.

Any decisions to expand an urban area ultimately sits with the Auckland Regional Council. Unless a compelling case is brought to the Auckland Regional Council and Waitakere City Council to shift the Metropolitan Urban Limit, only the current activity or underlying zoned uses will be permitted at Whenuapai within the Council’s Operative District Plan. As this underlying zoning is for Countryside Living, this would probably exclude a number of the Government’s options from coming to fruition.

9 Partnership

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Tauranga District Council, Tauranga Electricity Consumers Trust Rotorua Energy Charitable Trust.

CentralPower Electricity Consumers Trust, Palmerston North City Council, New Plymouth District Council.

Wellington City Council, Christchurch City Council.

Of great importance, Infratil is also a company with unimpeachable integrity that is regarded as having excellent management and a highly transparent approach to all its investments.

IFINZ 2003 award Best Corporate Communicator emerging leaders.

Shareholders Association 2003 Best and Fairest award.

e) Experience with “Joint-Use” Civil-Military AirportsInfratil has experience managing civil airport operations alongside those of the military:

At WIAL there is a small RNZAF presence and terminal.

At GPIA the Royal Navy has a search and rescue base that uses three Mk5 Sea King helicopters and employs 75 personnel. The Navy has an agreement with GPIA for priority access to aviation facilities. In addition, the Airport provides a range of aeronautical services to a wide variety of itinerant military aircraft on both programmed and ad hoc operations.

When Infratil management were in control of Darwin Airport they had direct experience of a Joint Use airport with the Royal Australian Airforce. This airport was managed in accordance with a comprehensive joint use agreement that governed day to operations and the longer term maintenance of common infrastructure, capital expenditure planning and implementation, master planning and development controls, etc.

f) Waitakere City Council ExperienceTo date, the experience of Waitakere City Council (and Enterprise Waitakere) has been that Infratil has delivered on its expressions of interest. This includes entering into an agreement that gives Waitakere City Council ongoing representation on the board of any company formed to progress the commercial development of Whenuapai Airport. Council has also been granted an option that would enable it to acquire a 33% stake in the Airport company and will enable the City to gain a financial benefit from the Airport investment if it provides a good return.

a) Commercial Partnership with InfratilIn seeking to progress the commercial development of Whenuapai Airport, Waitakere City Council decided to form a commercial partnership with an airport owner/developer/operator. Without such a partner, Council would not have proceeded to support the commercial redevelopment of Whenuapai.

Waitakere City Council chose Infratil as its partner to maximise the commercial viability of its case for the civil use of the Airport and to ensure that it had a partner with the right expertise, resources and patience.

Waitakere City Council is promoting the civil use of Whenuapai Airport because it is of the view that this is the best ongoing use of the site and the Crown’s existing investment in its development. Council’s comfort that its goals can be met (if given the opportunity by Government) is founded on Infratil being the partner with the best prospect of delivering a successful civil airport operation within a meaningful period.

Factors contributing to the decision of Waitakere City Council to partner with Infratil include:

b) Airport ExpertiseInfratil is the 66% controlling shareholder of Wellington International Airport (WIAL) and the controlling shareholder of Glasgow Prestwick International Airport (GPIA).

WIAL is recognised as one of the most efficient airports in the world (As identified by Standard & Poor’s, Transport Research Laboratories, and others, including Air New Zealand before the Commerce Commission).

GPIA is a second tier UK airport focussed on freight and low-cost passenger airlines. It is experiencing huge growth as a result of European aviation deregulation resulting in greater competition, lower airfares and many more people flying.

The management team at Infratil have great experience in the airport field including purchase and management of Perth, Darwin, and Alice Springs airports when they were privatised by the Australian Commonwealth. They have investment in, and board representation on, Airport Group International, then the world’s largest airport ownership company, and numerous airport investment projects in Europe.

c) Ownership and Capital ResourcesInfratil is a mainly New Zealand owned company based in Wellington. It has approximately 20,000 New Zealand share and bond holders.

Infratil has a very successful track record from investing in infrastructure and has sufficient capital resources to finance the development of Whenuapai Airport for civil use.

d) Relationship Track Record and IntegrityIn addition to airport expertise and capital, Infratil also offers Waitakere City Council a partner with considerable expertise in working with community and local authority bodies; including:

10 Experience

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Whenuapai Airbase in terms of Emergency Management is as a landing and airlift base. Airports can be used to transport in emergency equipment, personnel and supplies in case of an emergency. This use is not reliant on retention of the base as a military facility, and could be maintained were Whenuapai converted into a commercial airbase or a commercial/military shared facility.

iv) Risk ManagementAuckland is New Zealand’s major urban conurbation nearing 1.4 million in population. Relying on one airport instead of two is an “all eggs in one basket approach”, particularly when the second airport already exists. Mangere is low lying, and on a harbour and could within the realms of possibility be affected by an emergency event. More importantly it relies on access to the region via SH1 or 20 which could be affected by an emergency event. Retaining Whenuapai provides a backup option to Mangere, or a primary option should Mangere not have the capacity required for normal and emergency requirements. Whenuapai also provides a facility close to the northern part of the region if this is where emergency requirements are most pressing.

c) Emergency Military UsesWhile the purpose of this submission is not to address military policy, retention of Whenuapai as an airport if the military presence is withdrawn, allows the Government to maintain a small military presence close to Auckland, with the ability to use the facility to increase operations if ever required. With Auckland being the largest City this would seem desirable. It would also provide a place for military personnel to land if they were required for Emergency Management response duties.

a) Operational and Wider Security Needs The Whenuapai Airport proposal allows for a phased withdrawal (see Infratil submission) of the airforce whilst the commercial airport is being established. Civil aviation requirements are likely to require that the perimeter fencing be upgraded for the establishment of an international commercial airport. This can only benefit the operation of the airforce base for as long as the airforce use continues.

As noted in the Infratil submission Infratil have a great deal of experience in working with joint use airports both in New Zealand and overseas.

Keeping Whenuapai as an operational airport preserves the option for its use in emergencies in both civil and military emergencies throughout the Pacific region.

b) Civil Defence Issuesi) CDEMGWaitakere City is part of the Auckland Region Civil Defence Emergency Management Group (CDEMG). The Group is responsible for planning and putting in place and maintaining reduction, readiness, response and recovery measures and capability for the Auckland Region.

In the event of a large-scale emergency, air transport and support from national and international sources could be vital. Whenuapai currently provides both a military presence to provide support services, and an airport facility to supplement or replace the main regional airport at Mangere.

ii) Trained ResourcesThe closure of the Military presence at Whenuapai will remove a large pool of trained and disciplined personnel who could be made available to assist in a civil defence emergency. Additionally, the base also provides a logistic supply capability through the provision of resources not purely restricted to aircraft. Currently, the base maintains a ready support group of personnel and associated transport that could be deployed to assist in a major incident within Waitakere City or the Auckland region. Approval for use has to be agreed at a national level but the response could be expected to assist at relatively short notice.

This is the only ready to respond military capability in the Auckland Region that could be requested to assist in civil defence operations. The Navy could provide personnel assistance but this would take time to organise and would not be a dedicated response such as is established at Whenuapai.

iii) Emergency ManagementOperationally, Civil Defence and Rural Fire management maintain a close liaison with the Airbase. Airforce personnel are represented on the North West Emergency Management Committee and exercises with the local emergency services are conducted on a regular basis. The base fire fighting resource is also used as a back up for some local fire fighting.

Regionally, the closure of the aiport would be of greater concern, as it would remove a dedicated military airlift resource for government support in a major emergency. The key benefit of

11 Defence Needs

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c) Rural Residential SitesGiven the existence of substantial development on the site and thousands of cubic meters of concrete, it is not realistic to consider this option for much of the land. It does not address the liability issues, would not provide any economic benefit, and would not fund the necessary work required to remediate the site. Any proposal for this option would need to take these issues into account when transferring the land out of crown ownership. It would also have potential risks to the Council as noted above due to fragmented land ownership that would result from the necessary disposal process.

d) Combination of the AboveThe Airport proposal as outlined in this submission (and detailed in the attached Infratil submission) is the only option that allows a combination of these options to occur while achieving the government’s aims.

Waitakere City has assessed the four alternative options to an airport listed in the NZDF discussion document.

Another Public Work and or Urban Development

Industrial/Development Site

Rural Residential site

A combination

a) Public Work and/or Urban DevelopmentThe Crown may or may not have a public work requirement for all or part of the site. It is difficult to assess what this would mean unless that public work is known. For example a prison may have a significant economic impact. However, such a development would be likely to engender strong public debate, and is not likely to require all the land available.

Urban development is not a public work. It would be possible for the crown to acquire the land for residential development and some limited ancillary uses as at Hobsonville. However, this would not deliver significant economic benefit, and would be contrary to the regional and local growth strategies, unless it was intended to bank the land for a very long time. This would not allow the significant infrastructure liabilities that go with the land (estimated at between $20 – $30 million for local wastewater, water supply, storm water treatment and roading) to be addressed. Neither does it address the significant remediation work that would need to be carried out for any uses alternative to an airport.

b) Industrial/Development SiteThere is no ability to ensure this outcome under the disposal processes identified in the NZDF consultation document. It relies on the land being offered back to original owner or the market. It potentially creates a fragmented land ownership pattern as the disposal process reverts the land back to the titles prior to the land being taken for Defence purposes. , Because of the way that the land has been held for Defence purposes, without the ability for the local authority to acquire financial contributions or rates, there are significant risks and costs to the ratepayers of Waitakere City under this scenario.

Such development is contrary to the Regional and Local Growth strategies and planning documents. There is no strategic benefit to use this land for an industrial/development site, when there are other planned areas for this activity which are consistent with the local and regional planning framework.

This option also does not provide a mechanism to deal with the liability issues as noted above for the Public Work and/or Urban Development option.

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Two business breakfasts were held, one in Waitakere and one on the North Shore. These were well attended (84 at Waitakere and 65 on the North Shore) with opinion again strongly supportive.

d) Opposition to ProposalVarious grounds are cited for opposition to the proposal that Whenuapai Airport be used for commercial operations.

i. Opposition from Mangere Airport, the existing monopolistic supplier, on the basis that Mangere’s planned second runway will meet demand for decades to come.

ii. Opposition from people who have purchased or developed dwellings under an existing flight path.

iii. Various other reasons given by the 13% opposed to the concept in the TNS poll, not all of which stand up to logical scrutiny, reflecting a lack of awareness of the detail of the NZDF process and the Waitakere City/Infratil proposals.

i) Comment on Expressed OppositionThe acknowledged benefits of competition also apply to airports. Why would the owners of Mangere airport be concerned at a proposal to develop a second commercial airport in the region? Because it gives their airline customers the option of moving to another base if they are able to offer superior prices, facilities and services. These benefits are likely to be reflected in airfares and airfreight charges. Auckland International Airport is currently running a public campaign to advise the public how to cope with the shortage of parking. Airlines are advising international travelers to arrive at the airport three hours before their flights so as to cope with the congestion.

Virgin Blue, after expressing interest in check-in facilities for proposed Trans-Tasman service, was told by Auckland Airport that they may have to consider building their own terminal.

Airlines are watching the Whenuapai proposal with great interest, and are open to operating from there if they can negotiate acceptable terms. It is particularly attractive to them that half of the population in the greater Auckland region lives closer to Whenuapai and that considerable regional airfreight is generated by enterprises in the north west of the region.

Secondary airports tend to attract more airlines to provide services, because the economics of doing so become more attractive when there is competition. Population is not the only driver of the need to create second airports. Topography, traffic congestion, the availability of land for an additional airport are all factors. Some cities with only one airport find it difficult to create a second airport simply because they do not have sufficient suitable and affordable land available in the right location. With Whenuapai, Auckland is indeed fortunate in this respect.

A second commercial airport at Whenuapai will clearly provide meaningful and beneficial competition for Mangere, without wastefully replicating the infrastructure necessary to provide that competition. However, it is not envisaged that Whenuapai would ever be more than a secondary regional airport, using its natural advantages to attract several airlines to use it as a base, serving its

a) Public Opinion SurveysIn December 2003, a poll of the Auckland region was undertaken by TNS, a large professional market research firm (see appendices).

The TNS study was conducted by telephone, interviewing a total of 300 residents in the greater Auckland region.

In summary, results showed that there was reasonable awareness of the Whenuapai proposal (61%). North Shore residents were significantly more likely to be aware of the proposal (79%). Near to half of all respondents were in favour (strongly or somewhat) of the proposal (46%) and interestingly, North Shore residents were no more in favour nor more opposed to the suggested developments than residents in other areas of Auckland.

The main reasons for support of the proposal were the belief that Auckland was growing rapidly, the area around the existing airport is getting too congested, travel time for residents of the North Shore and West Auckland is too long and inconvenient, and that it would be good economically (employment/development/service & pricing competition).

Nearly a third of those interviewed (31%) would not mind whether or not a commercial airport is developed at Whenuapai.

Of those interviewed, 13% were opposed to the proposal (strongly or somewhat).

The main reasons for opposing the proposal were concerns of noise pollution, Auckland not being large enough to support two airports, land/resources/money should be going towards housing/education/health/other means of public transport, and that North and Western motorways are already becoming congested.

A poll of readers conducted by the Western Leader also showed strong support for the concept of a commercial airport at Whenuapai.

b) IwiWaitakere City Council has a long-standing relationship with the local iwi, Te Kawerau A Maki.

Te Kawerau A Maki are the original inhabitants of the area (recognized by, among others, the Waitangi tribunal and the Maori Land Court).

The tribe fully supports the proposal to retain Whenuapai for airport operations, citing the City’s pressing need for economic growth and development. The iwi has serious concerns about environmental effects, particularly on the Upper Harbour, should options such as urban development be pursued.

A formal submission from Te Kawerau A Maki is attached.

Waitakere City also engages with urban and iwi Maori through its Standing Committee Te Taumamta Runanga.

c) Business CommunityEnterprise Waitakere has been consulting extensively with local Business networks and individual businesses in Waitakere, North Shore and Rodney. Overwhelmingly these support Waitakere’s proposition as evidenced by the submissions appended.

13 Community Views

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natural catchment area much better than it is served at present, and stimulating local area growth and employment.

ii) Residents under Flight PathsOpposition from people who have purchased and developed dwellings under the flight path is equally understandable. Many people, when given the choice of continued aircraft activities or no aircraft activities, will prefer no aircraft activities. There are currently 22,000 aircraft movements a year at Whenuapai. It is anticipated that commercial operations will initially produce less noise than the current military operations. However, there will clearly be ongoing noise impacts if Whenuapai continues to operate as an airport and noise levels will increase as the volume of commercial flights increases. It is not envisaged that Whenuapai will ever service the level of air traffic carried by Mangere. Plans are to service only New Zealand, Pacific and east coast Australia destinations. The rate or extent at which commercial services will expand at Whenuapai cannot be accurately predicted. The issue of future noise levels will be dealt with when the operator applies for resource consent for commercial activities at Whenuapai and the effects are assessed under that process. The Resource Management Act provides the process to deal with environmental issues, such as noise, not the disposal process the Crown is currently undertaking.

iii) Other Grounds for Opposition Revealed in TNS SurveyThe main reasons for opposing the proposal were concerns of noise pollution, Auckland not being large enough to support two airports, land/rescources/money should be going towards housing/education/health/other means of public transport, and that North and Western motorways are already becoming congested.

Clearly there is a lack of understanding that under the Waitakere City/Infratil agreement, all of the development capital required to adapt the existing Whenuapai facilities for commercial use is to be provided by Infratil, not by the Crown or Waitakere City, and that it is Infratil which will carry the commercial risk. Infratil capital is not available for suggested alternatives such as education, health, buses and trains, and it is Infratil that will carry the main financial risk

of whether a commercial airport proves to be viable.

Similarly, objecting to a commercial airport on the grounds that the Air Force should not be leaving is not a valid reason for objecting, as that decision has already been made.

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The Commercial airport option is not only the most logical future use of the Whenuapai Airport site, it is also the only the only viable option available to meet government’s identified outcomes.

The commercial airport option has the least legal uncertainty, least strategic risk, and least liability to the Crown and to Waitakere City Council.

The commercial airport option allows the greatest deal of control for both the local authority and for the Crown in partnership that is compatible with current and future Defence needs.

The commercial airport option best supports central, regional and local government policy particularly in tourism, transport and sustainabale development.

The commercial airport option has the support of Waitakere City and the mana whenua iwi.

Only the commercial airport option will provide a timely outcome that is ready to go now with a commercial rate of return to the Crown.

a) RecommendationTherefore Waitakere City Council seeks the following recommendation to Cabinet:

That the New Zealand Defence Force recommends to Government that the Waitakere City Council/Infratil proposal to develop Whenuapai Airport for commercial use, with associated industrial and commercial development is the most logical future use of Whenuapai.

14 Conclusion

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Support Submission of Infratil

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Mr Peter BollmannDirector, Property RationalisationNew Zealand Defence ForceDefence HousePrivate BagWellington

Dear Peter

This submission addresses Infratil’s credentials to be chosen to work with the Crown to develop civil aviation operations at Whenuapai Airport.

It also outlines how the Crown (especially its military interests) could work with Infratil and Waitakere City Council so as to:

Allow efficient joint military-civil use of the Airport for as long as the Crown requires the military use.

Allow the Crown to realise fair value from the site as military use reduces.

Allow the civil operations to be developed given civil aviation and environmental restrictions.

We have not addressed the wider achievement of Government’s policy goals as this is covered in the submission of Waitakere City Council.

At this stage of the consultation process it is neither necessary nor desirable for the various parties to the outcome to have hard and fast terms. Consequently we have focussed our submission on setting out a case for New Zealand Defence Force to work with Infratil and Waitakere City Council to optimise the Crown’s outcomes from this process.

Our objective is to be as transparent in our proposal as commercial prudence and the consultation process allow.

Our partner, Waitakere City Council, has a strong civic case for the Whenuapai site to be developed as a civil airport and industrial/commercial hub for the Northern and Western areas of Auckland. Infratil intends to provide its aviation and airport management expertise and invest in this development so as to show an appropriate risk-adjusted return for its shareholders.

Confirming that such a return is feasible will be the objective of the next stage of this process once NZDF/Government has decided that Waitakere City Council’s proposal is worth investigating and developing.

We intend to show in this submission that NZDF/Government can regard Infratil as a capable and reliable partner in such a project with a unique set of skills and credentials.

Infratil is a predominantly New Zealand owned company with approximately 20,000 share and bond holders. It has an almost 10 year track record of investment in infrastructure and has maintained excellent returns to its owners over that period. It has New Zealand provided capital resources sufficient to meet all the plausible costs of progressing the development of successful civil aviation operations at Whenuapai.

Infratil’s experience at Wellington International Airport ideally equips it with the skills to understand and manage the difficult environmental, social and civil aviation issues of an airport in an urban area such as Whenuapai.

Infratil has direct international experience in providing airport facilities to airlines in the low cost sector (the primary target for Whenuapai’s operation) through its ownership and management of Glasgow Prestwick International Airport. This has been one of the UK’s fastest growing airports over each of the last three years. Since Infratil acquired a controlling interest, Glasgow Prestwick’s passenger throughput has more than doubled to two million passengers per annum.

Infratil has world-class commercial airport experience. In particular it has experience at “brown fields” airports such as Whenuapai, which have their own particular challenges in building airline, passenger and freight support.

Infratil has management experience of airports where military and civil operations co-exist.

Infratil has a long track record of working constructively with local government and community bodies. In 2003 Infratil was the INFINZ “best corporate communicator, emerging leader” and received the “Best and Fairest” award from the New Zealand Shareholders’ Association. These awards reflect the fact that as a utility investor Infratil takes seriously its wider social responsibilities and the obligation to communicate and operate in a transparent manner with the greatest of integrity.

I recommend our submission to you and look forward to having the opportunity to work with NZDF on the development of a successful civil aviation operation at Whenuapai Airport.

Yours sincerely

Kevin O’ConnorChairmanInfratil Limited

Infratil Chairman’s Letter

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Waitakere City Council and Infratil are offering to establish civil aviation operations at Whenuapai Airport as defence use declines over the next four to five years. Over this period a plan will be developed for the site identifying areas required for aeronautical use and land available for commercial development, social use, or sale.

The core elements of this proposal are:

1. That civil aviation operations at Whenuapai developed by Waitakere City Council and Infratil will be successful.

2. That successful civil aviation operations and the associated development of the rest of the site represent the best value proposition for the Crown.

3. That Waitakere City Council and Infratil are ideally and uniquely able to partner with New Zealand Defence Force (NZDF)/the Crown in this project.

Waitakere City Council / Infratil PartnershipWaitakere City Council invited Infratil to join in the development of a successful civil operation at Whenuapai Airport. Infratil and Waitakere City Council have entered into an agreement that entails:

Infratil providing expertise and funding for the development and operation of the civil operations.

Both parties having board appointment rights.

Waitakere City Council having the right to take up a one third shareholding in the airport company at any time over the next seven years.

In this submission Waitakere City Council and Infratil are also jointly referred to as “the Partners”.

Waitakere City Council/Infratil Proposal to NZDF/the CrownThe Partners’ proposal to NZDF/the Crown entails:

The parties working together to enable civil and military operations to coincidentally occur at the Airport.

Gradual assumption by the Partners of responsibility for the maintenance, operation and development of the Airport.

Agreement for the long-term improvement of the Airport and the development and realisation of non-aeronautical land and assets to optimise value for the Crown.

Return to the Crown of the site if civil use of the Airport is not successful (and/or implementation of an alternative site use/disposal plan if that was preferred by the Crown).

Whenuapai Airport Aeronautical RequirementsWhenuapai comprises 311 hectares of which between a third and a half is likely to be necessary for civil aeronautical operations over the longer term. The land not required for this purpose would be available for other uses.

At Wellington International Airport, aeronautical use (comprising aviation and aviation support) occupies some 93 hectares, 85 hectares of which is airfield (of total land of 110 hectares). As Wellington is also a short-haul airport this is a reasonable guide

to the likely minimum requirement of civil aviation at Whenuapai. (NB recognising that Wellington has no airlines based there, no significant freight or express parcel operation, no material aircraft maintenance, engine or component overhaul operations, etc. – all of which could be part of Whenuapai’s future.)

This scale may be compared against Auckland Airport which has over 1,000 hectares designated aeronautical. Although, of this, only 309 hectares is operational airfield and 321 hectares is held for the second runway. At Christchurch Airport 328 hectares is designated airfield.

The Partners are proposing to widely canvas those with an interest in operating at the Airport and to develop schemes for aero/commercial land use to optimise the value of the site.

The Viability of Civil Aviation Operations at WhenuapaiPreliminary evaluation of the likely costs and revenues associated with civil operations at Whenuapai indicates that a viable commercial business is prospective for an investor willing to invest for long-term returns. This reflects projected capital and operating costs, and likely revenue levels, all of which have been based on preliminary information.

Proving up the commercial proposition will be a priority once NZDF has decided to progress discussions with the Partners.

The Partners intend to develop Whenuapai Airport to focus on low cost passenger services that would operate on a short haul basis to other airports in New Zealand, east coast Australia and the Pacific.

Ideally the Airport will attract support from carriers such as Freedom, Pacific Blue and Origin Pacific, which will provide “point to point” services.

Passengers will be attracted to utilise the air transport services by their low cost and will not mind the “simple” airport facilities.

The focus will be on high growth based on low costs/low frills services.

The civil operations will be complementary, rather than competitive, with those at Auckland Airport, which derives the majority of its economic value from long haul services and network carriers, and non-aeronautical property development.

Regulatory & Community Relations ManagementDevelopment of civil operations at Whenuapai faces a number of regulatory hurdles. Civil Aviation Authority (CAA) will be required to approve the airfield and operations. Consents will be required under Waitakere City’s District Plan.

At Wellington International Airport, Infratil has had considerable experience of both sets of needs.

Wellington is a compact airport in an urban setting. It faces safety, environmental and community relation challenges. Its success in each of these areas has been brought about by a long-term concerted programme of sympathetic engagement with its immediate neighbours and assiduous compliance with CAA requirements.

Background / Summary

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These experiences and skills will be a major attribute in the development of civil operations at Whenuapai.

The Case for SuccessThe Partners’ case for being selected by NZDF to be invited to develop the civil operations at Whenuapai is based on:

Consistent with global aviation trends, the high probability of success of the low cost/low frills approach.

The catchment of airport users who are likely to support air services operating from Whenuapai.

Infratil’s credentials and commitment to the development.

Waitakere City Council’s credentials and commitment to the development.

These factors are in addition to the other social/policy criteria addressed in the Waitakere City Council proposal.

Crown Achievement of Fair Value and Mitigation of RiskThe Partners contend that their proposal offers the Crown the best prospect of achieving, and gaining benefit from, the highest value use of the site.

Further, if the Partners’ proposal to develop successful civil aviation operations at Whenuapai fails, then the site will revert to the Crown for development of whatever alternative use the Crown deems appropriate at that time.

The Crown is not being asked to accept any risk in respect of the development.

The development of successful civil aviation operations at Whenuapai will optimise the site value and deliver the highest value return to the Crown.

If the Partners do not bring about successful civil operations in a reasonable time, then full control of the site would revert to the Crown for alternative use.

38 39

Waitakere City Council and Infratil are the ideal parties to be chosen by NZDF/the Crown to progress development of civil operations at Whenuapai.

Further, they also offer the Crown the best possible prospect in respect of optimising the use, and hence value, of the Airport.

Partnership AgreementOn 17 April 2003 Infratil and Waitakere City Council entered into an agreement to progress the commercial development of Whenuapai Airport as military use declines.

The Partners entered into the agreement following a vote of the Waitakere City Councillors.

Salient features of the agreement are outlined below. A copy of the agreement is available to NZDF.

The Partners are to work together on the development on an exclusive basis.

Infratil is to provide expertise and all funding for the development.

When development progresses it is expected that an Airport Company will be formed with Infratil appointing four directors and Waitakere City Council two.

At any time over the next seven years Council has the right to take up (and thereafter maintain) a 33% shareholding. The price of shares taken up to be set so as to provide Infratil a 10% per annum return on funds invested to that point.

Waitakere City Council is thus able to participate in any value upside above a 10% per annum return, while being completely insulated from the risk that returns are less than this.

Waitakere City Council is at liberty to take up its share entitlement and to then sell its shares as a way of capturing value from the option.

Credentials of Waitakere City Council & InfratilThe credentials of the Partners are set out elsewhere in this submission. The key benefits the Partners bring include:

Waitakere City Council has rights, as the local territorial authority, under the Crown’s disposal process and it wishes to exercise these rights in accordance with its policies to progress the City’s long-term goals. In particular, these goals include being able to stimulate economic activity and develop jobs within the city so that residents will not have to travel long distances to work. Council’s policy goals accord with those of Government.

Council is uniquely positioned to determine the optimal social and economic use of the site and to progress that use. It so happens that the uses favoured by Council will also optimise the Crown’s outcome.

Infratil is a world-class airport operator, with a proven record and ideal skills to achieve the development of successful civil aviation operations at Whenuapai. It has direct international experience in the low cost airline sector and in managing ‘joint use’ airport facilities. Its financial resources and credibility are impeccable.

Infratil has a long track record of unimpeachable corporate behaviour and willingness to stick with projects to deliver long-term value. It can provide references from a wide variety of Council and community groups as well as having established good relations in its dealings with Government and its agencies.

Waitakere City Council / Infratil Partnership

38 39

The Partners proposal to NZDF/the Crown for Whenuapai Airport entails a three-stage process (albeit, the stages will overlap):

1. The production of civil use of the Airport and the gradual substitution of military use as this winds down.

2. The production of a comprehensive development plan to determine long-term use of the 311 hectares, whether military/civil aviation, commercial development, social, or disposal.

3. Implementation of the comprehensive development plan and realisation of value to the Crown as land and assets not required by the Airport are brought into alternative productive use.

The proposal also envisages conditions to the Crown’s commitment to the Partners. The Partners are proposing to progress the development of successful civil operations at Whenuapai Airport. If this is not achieved the Crown would have the opportunity to resume its assets and dispose of them into alternative use (or require the Partners to progress some alternative disposal plan).

Today, the market value of Whenuapai Airport is low as it has no capacity to operate, or gain commercial benefit from, civil services and its alternative uses are of low intensity. The Partners’ goal is to work with the Airport military users and NZDF/the Crown to build up a successful civil aviation operation and to use this as the basis for ancillary commercial development of the surrounding area.

Joint Civil-Military UseAt present it is intended that military use of the Airport continue until at least 2007. It will be of considerable benefit to both the existing military users and the Partners’ civil operations if the civil operations can start as soon as possible.

The military users will be able to share costs with the incoming civil operations.

By initially leasing services and excess capacity from the military the civil operator will be able to minimise costs at a time when revenues would also be expected to be low.

From the wider community perspective there would not be the large dislocation of military operations winding down and civil operations winding up.

Infratil offers experience of “joint-use” airports. The priority needs of the military can be accommodated alongside the commercial requirements of the civil operation.

Coordination of Joint Civil-Military UseIt is expected that the Partners would submit a plan to the Airport’s current military users to gain ground space, to allow utilisation of aeronautical services (safety, ATC, etc), to share maintenance and operational costs, and to allow coordinated aviation operations. It is presumed that this will entail operational protocols to ensure priority military use, which also recognise the desirability of scheduled passenger services occurring to timetable.

There are a number of ground spaces that could be segregated from military use. The preferred positioning is likely to depend on the military’s own withdrawal plan.

The coordination of incoming civil operations with outgoing military will require some planning, but should not impinge on the viable operation of either party. There will be issues surrounding the Partners’ rights to actually undertake construction on the site, but there is no reason why this should impinge on military capability.

Transfer of Control from Military to Civil UsersAs defence gradually withdraws it is envisaged that the civil operations would expand.

The process of expanding civil use would be subject to meeting commercial and regulatory constraints:

Preliminary evaluation of Whenuapai’s aeronautical infrastructure has shown that it could cost in the vicinity of $50 million to bring the Airport up to the standard necessary to gain all Civil Aviation approvals and offer a basic level of facilities to domestic and international jet services.

Before such a sum was spent it would be necessary to gain expressions of commitment from airlines to use the Airport. It would also be necessary to gain, on a forward-looking basis, civil aviation and resource consents.

At some point it is anticipated that military use of the Airport will become incidental. At that time it is expected that the Partners will assume control and the military users will become the tenants, ie. a reversal of roles. The military users may of course depart altogether if they wish.

Site UseOnly a part of Whenuapai Airport’s 311 hectares will be required for aeronautical (aviation and aviation support) use (whether civil or military). As the parties are developing protocols for joint civil-military use of the Airport, a comprehensive development plan will also be progressed.

This will entail identification of areas required for aeronautical use (the priority) and the areas available for other applications.

The likely optimal use of the site will entail a range of applications and will depend on the Crown’s wider goals. Land would be available for commercial or social development or sale.

Waitakere City Council / Infratil Proposal

40 41

Optimisation of Crown ValueIt is envisaged that the Crown will grant the Partners a long-term lease over most, or all, of the Airport.

This may be actually entered into once the Partners have agreed to take primary responsibility for maintaining, operating and developing the Airport. This may occur after an initial period of civil operations and after the comprehensive development plan has been developed, but some form of agreement will be necessary before Infratil commits capital for runway repairs, terminal development, etc.

The lease between the Crown and the Partners will be structured to ensure the Crown achieves optimal value from non-aeronautical assets and that failure of the Partners to achieve their goal of establishing a successful civil operation at the Airport will result in the return of leased assets to the Crown so that alternative uses may be progressed.

The Airport has negligible value without consents, infrastructure and customers. It will be the Partners’ role to invest in developing successful civil aviation operations. Having achieved this, the Partners and the Crown will benefit from the increasing value of the non-aeronautical areas of the site.

Indications of how a successful civil airport will flow onto the value of surrounding land, especially that which is actually part of an airport precinct is illustrated in Mangere. Evaluation of recent land development near the Mangere airport is set out later in this proposal.

Extraction of ValueThe scale of value that may be derived from the site is not known at present and it will take several years to prove and extract value. The agreement between the Partners and the Crown will have to allow reasonable time for civil operations at the Airport to become a success and for this to flow onto the value of non-aeronautical land. How this increased value would be passed to the Crown will require discussions between the interested parties once Government has chosen to allow implementation of the Partners’ proposal.

Factors that will impact the value of the non-aeronautical site include:

How successful the civil aviation operations become. The more successful they are, the greater is likely to be the value of the surrounding site.

The split between aeronautical and non-aeronautical land. Up to 170 hectares could be available for non-aeronautical development.

How much of the non-aeronautical land Government is willing to see developed for ancillary commercial purposes. Recognising that some may be designated for recreational, conservation, social, etc. uses.

40 41

Whenuapai comprises 311 hectares and the allocation of this land between airport, commercial and other use will be important in respect of the value derived by the Crown from the non-aeronautical area.

Set out in this section are some preliminary ideas about how the airport operations may be developed on the site, and the consequences in respect of residual land that could be developed into commercial use, or designated by Government for social/recreational/cultural use.

The development of a comprehensive plan will be an extensive process and how and when it evolves will depend on the terms of the relationship with the Airport’s military users.

It is likely that the Partners’ development of a scheme for land use will take time and final decisions may only occur when Defence has effectively handed aeronautical control to the Partners.

Airport / Commercial DesignationThe intended approach will be iterative and is likely to entail:

In the first instance it is up to the Crown to stipulate ultimate site usage. This may be “civil airport and commercial”, but it may also include some space for recreational use, retention of the existing village, etc. This stipulation may form a definite blueprint, or it may be set out as guidelines to be developed as the Partners, and Government agencies, develop a site use plan.

The Partners will canvas potential users of the Airport and from this will develop a perspective on the likely space/utility needs of the Airport over the next 10-20 years.

Having identified the likely needs of the Airport, the Partners will then map out “surplus” land. “Surplus” in the sense of being available for other use. The use for this land will then be developed, again with possible input from Government agencies.

Long-term Use of the Airport LandInfratil has undertaken preliminary work to scope up likely uses of the site. This has entailed identifying likely minimum needs for aeronautical use and the likely best use of residual space.

The site has been divided into six sub-areas:

1. Runway 03/21 and related operational area.

2. Area east of runway 03/21 (golf course and wetlands).

3. Apron and hangar precinct – the future terminal area.

4. Runways 08/26 and 12/30.

5. Accommodation and recreation area.

6. Housing and other land to the south west.

Each of these areas, and how their use is likely to be allocated between Airport/Other, is briefly described below:

1. Runway 03/21 and Related Operational Area This is the core of the Airport and would form the bulk of the aeronautical area. It amounts to approximately 100 hectares.

Given the nature of air services being considered for Whenuapai, the immediate objective is likely to be to maximise the use of the runway consistent with not having to achieve full precision approach standards, meaning operating from a 150 metre rather than 300 metre strip, accepting a high minima and, depending on the requirements of commercial operators, making progressive decisions on whether to retain full approach lighting, reduce to shorter configuration per runway 08/26, or delete the lighting altogether. ILS capability would preferably be retained, although operations could revert to systems equivalent to those used at airports such as Queenstown and Palmerston North.

Decisions about these factors will be made once the Partners are better informed about the condition of navigational aids and the likely timetable for major runway reconstruction. There has not been an opportunity to undertake a detailed review of the condition of the runway. Its condition is known to be poor and a major reconstruction will be required over time.

While a timetable for runway reconstruction will be developed in due course, once its condition is better appreciated and likely use better known, the following are likely to form part of the redevelopment:

1. Immediate removal of any remnants of the arrestor system.

2. Reconfiguration of the western end.

3. Possible partial westward relocation and lowering of Brigham Creek Road below the obstacle limitation surfaces removing the requirement for manual intervention from the control tower to restrict traffic movements.

4. Provision of a 90 metre RESA beyond the runway strip end to a point immediately adjacent to the road with the 21 localiser aerial at the end of the RESA. Creation within the RESA of a starter extension with the western end of that starter extension approximately 40 metres from the end of the RESA.

5. Reconstruction of the eastern portion. Either a partial re-build or short to medium term abandonment of this end for operations on 03, but use as starter extension for operations on 21.

6. Reconstruction of the central portion of the runway is likely, but whether this would entail a full 45 metres, or just the centre 30 metres will only be known after site work.

The western end changes could provide up to 150 metres of usable runway for operations for both 03 and 21. This could be applied as an addition to the available 2,031 metres or used in substitution for the longitudinally sloped section at the eastern end, which is likely to require reconstruction at some point.

Airport / Commercial Development

42 43

Over the more medium term the following developments would also occur:

7. The apron edge taxiway, which acts as a parallel taxiway, is too close to the runway and therefore does not comply with CAR 139.06 for code C and D aircraft. However, initially at least, this would be dealt with via operational procedures rather than reconstruction.

Longer term, a parallel taxiway would be created based on a 103 metre separation between the centrelines of the taxiway and runway allowing contemporaneous Code D (say military B757) and Code C operations.

8. It is expected that the VORTAC navigational aid would be moved as its current position is likely to limit long-term commercial development of the Airport. Over time it is also likely that PAPI would be installed to replace the VASIS.

9. The operational area would be fenced to CAA standards.

How the Airport is to be operated and the plan for investment in infrastructure will depend on likely airline interest in providing services and the condition of existing infrastructure. Developing the operating/upgrade plan would be a priority.

2. Area to the East of Runway 03/21 (Golf Course and Wetlands)This area would not be directly required for the Airport’s civil operations. It amounts to approximately 45 hectares and a development or disposal programme could be determined with NZDF/the Crown.

As this land would be contiguous with the Airport, it would be important that its long-term use was compatible with the Airport operations. If the land were sold, its use would have to be constrained and future owners restricted from participating in any action against the Airport activities.

The wetland area could be retained by the Crown for environmental reasons, or vested in the appropriate authority once it has received an appropriate bill of health (it was formerly used as a land fill).

3. Apron and Hangar Precinct (The Future Terminal Area)Over the medium term this area of approximately 40 hectares would be required for the terminal and related activities.

The current apron and hangars are close to the runway, constraining the depth available for the terminal precinct. The optimum location for the terminal will reflect the need to provide space to the airfield (takeoff, landing, taxiing, parking) on the one hand, and terminal needs on the other.

When airfield and terminal needs are overlaid on Whenuapai it is clear that much of the existing apron and hangar area parallel to 03/21 is not suitable in the long-term for a commercial terminal area, but is still useable for aircraft parking and general aviation. The area best suited for a commercial terminal lies further back from the runway.

4. Runways 08/26 and 12/30This area of approximately 65 hectares would be designated for a mixture of aviation and ancillary commercial use, mainly the latter. Depending on demand it may be allocated to aircraft basing, maintenance, etc.

Runway 08/26 is not likely to be required over the longer term for civil aviation, but in the short term it may be a useful substitute for 03/21 during that runway’s reconstruction.

It is likely that the area would be progressively brought into ancillary commercial and industrial use, possibly with parts being retained for general aviation.

Precise dimensions of the commercial/aviation areas cannot be estimated at this time. This is an area that would be expected to deliver value to the Crown at the time it was brought into development for activities ancillary to the primary airport use.

Runway 12/30 is already closed and would not be required for commercial aviation purposes. The area that extends to the east of 03/21, currently used for engine run-up, would also not be required for aviation purposes.

5. Accommodation and Recreational AreaThis area of approximately 40 hectares would be used for a mixture of terminal and commercial use.

Land to the east of the entrance road and stream delineated by Kupe Avenue is likely to be allocated to commercial development.

Access to the terminal area would need to be on the existing main road system (Tamatea Avenue, Tainui Crescent and Takitimu Street).

Vehicle parking for the terminal may initially be on areas of apron, but in the longer term it is likely the recreation field would be converted to asphalt.

The topography of the land to the west of the stream means it may be best suited to community, recreation or housing uses. Relocation of some base houses is an option. The area could also accommodate residual non-airfield NZDF activities after the bulk of the military operation has shifted to Ohakea. Facilities that are an asset to the community, such as the pool, may be retained for social use over the medium term.

42 43

LEGEND

Possible Surplus

Commercial/Aviation

Terminal/Commercial

Approved Motorway

Military

WHENUAPAI AIRPORT INDICATIVE OVERALL LAYOUT

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WHENUAPAI AIRPORT REVIEW

44 45

6. Housing and Other Land to the South WestOnly a small part of this area of approximately 20 hectares is likely to be required by the Airport. The remainder could be disposed of in its current use or developed over time for commercial use.

Any properties sold would need covenants placed on their titles that note the presence of airport noise and activities and limit the ability of future owners to bring actions against the airport.

A part of the grazing land to the east of the houses is likely to be needed for road realignment and would fall within the medium term needs of the Airport. The remainder of this area could be developed or sold over time.

Conclusions An important part of the Partners’ proposal to NZDF/the Crown is that Whenuapai Airport offers sufficient space for both a successful civil Airport and a number of other land uses.

Over time, the optimal value of the site will be achieved by allowing the development of a successful civil airport and the parallel commercial development of surrounding areas.

However, recognising that Government may have other than purely value maximising objectives, the land surplus to airport needs could also be placed in civil or conservation use if that outcome was preferred.

The programme for the Crown to extract value will take some considerable time to develop. It will entail Waitakere City Council, Infratil and NZDF working together to develop an agreed site use plan. Once this is in place the parties will need to develop a plan for the development of, and realisation of value from, the non-aeronautical areas.

Over the long-term the 311 hectares may end up as:

Long-Term Allocation of Airport Land (hectares)

Airfield 100

Civil terminal area 20

Military terminal area 20

Commercial aeronautical 75

Other / Surplus 96

Total Airport 311

44 45

The Partners intend to develop civil aviation at Whenuapai Airport to suit low-cost/low-frills/low-fare services. There may be limited freight operations (likely to be mail and express parcel services), but the main focus will be on passengers. A development of this nature is likely to stimulate additional market growth rather than simply drawing from existing Auckland airport traffic.

Very preliminary discussions have been held with a number of local airlines and parties with interest in this area. Feedback has been favourable, albeit contingent.

The development of the Airport operations will depend on how expressions of interest coalesce into firm commitments to use. Significant capital spending on the Airport will only occur once there is certainty of use.

Clearly this is a “chicken and egg” issue, but it largely relates to the speed with which development will occur.

Slow development may entail a period of regional services from turbo-prop aircraft demonstrating passenger demand. Achieving this is likely to entail little spending on the airport and Infratil expects to be willing to invest in the Airport in anticipation of turbo-prop services as the value at risk will be relatively modest.

Faster demand and airport growth would entail jet use. For the Partners to invest to accommodate jet services there will need to be some certainty that the services will occur. The cost of upgrading the Airport for jet services is likely to be significant and Infratil would want to be certain of some airline interest before making such a commitment.

Preliminary Airline InterestMeetings with airline representatives have indicated that Whenuapai is of interest. In part because Whenuapai offers access to an attractive catchment of potential passengers, in part because of benefits Whenuapai offers relative to Auckland Airport.

A recent Massey University study forecasts an increase in the Auckland area population by 434,800 over the period 2001 to 2021. A large part of this population growth will occur north of the Auckland isthmus. The existing and committed land and harbour transport network for Auckland means that Whenuapai is, and will continue to be, the more accessible airport for a large part of Auckland’s population, up to 520,000 people. In 20 years this may be 1,000,000 people.

Whenuapai’s civil operations are not intended to be in the same league as those of Auckland Airport. The Partners’ 10-year target is to stimulate a market equivalent to approximately 15% of the base Auckland air travel market.

In addition to its scale, the nature of civil operations at Whenuapai would differ to those at Mangere. The focus will be on offering a base for low-cost/low-fare services. A multi-user terminal would be created to allow aircraft to come in as domestic and depart as international (and vice versa) with minimal ground time.

Modest airport facilities (cheap and cheerful) would complement the nature and style of low-fare airline services. Experience has shown that the key needs of this sector are:

Speedy turnaround times and few delays (given spare airfield capacity at Whenuapai this is the most easily delivered need).

Efficient passenger processing facilities.

Minimisation of charges and a close linkage of costs to services/benefits – airport and ground handling costs being a significant focus of low cost airline operation.

Large population base within a reasonable connect time (ie. reflecting both the size of the population and access).

Low-fare Airline GrowthThe intention of the Partners to focus Whenuapai on low-fare airlines is based on awareness that such services are the high growth section of the world aviation market and that they are not being effectively accommodated at Mangere.

An irony of Auckland Airport’s recent growth surge from full service carriers such as Emirates is that it has not been able to accommodate Pacific Blue which has been the highest growth airline in Australasia since setting up a little over three years ago.

Case Studies of Low-cost / Low-fare Airlines1. Southwest Southwest invented the low-cost / low-fare airline model in 1971. Since then:

Southwest has become the world’s most valuable airline by market capitalisation. Its success belies the famous Warren Buffet bon mot “If there had been a capitalist down there [at Kitty Hawk the day the Wright brothers made their first flight] the guy should have shot down Wilbur! ... one small step for mankind, and one huge step backwards for capitalism!”

Since listing in 1974 Southwest has out-performed the US share market S&P500 index by 16,000%.

Southwest has 385 aircraft and 122 on order. Its operations are entirely internal of the USA.

Airport Market

46

2. RyanairRyanair initiated a strategy to imitate Southwest in 1985. Since then it has grown to be the largest low-cost/low-fare airline in Europe and has achieved an explosive impact on the routes it flies.

Ryanair has proven the price elasticity of air travel. In its evaluation of airline and airports the New Zealand Commerce Commission has used elasticity rates of 1.1% to 1.5%, ie. a 10% drop in travel costs increases travel demand 11% to 15%.

The scale of market growth delivered by Ryanair belies these statistics. In addition to its own growth based on the attractions of its low fares, Ryanair’s arrival on a route has also stimulated responses from competitors that have seen their volumes also grow.

The crucial message of Ryanair’s operations is that the market for air travel is as large as airlines make it. It depends on the cost and availability of services rather than being a function of the size or wealth of the local population.

3. Virgin Blue / Pacific BlueWhile Virgin Blue’s growth benefited from the demise of Ansett and regulatory restrictions placed on Qantas’ competitive response, its low fare/low frill service has resulted in it carrying over 8 million passengers after three years.

4. Air New Zealand ExpressAir New Zealand introduced pared back services and lower fares on domestic services in November 2002. The average Air New Zealand fare was reduced 20%. In its first year of operation Air New Zealand Express carried 14% more passengers and the New Zealand domestic passenger air travel market grew in the vicinity of 10%.

ConsequencesAs noted in the Waitakere City Council proposal and its supporting appendices, airports are major sources of economic stimulation. Pertinent evidence of this comes from a November 2003 study undertaken for Scottish Enterprise on the impact of passenger services at Infratil’s airport at Glasgow Prestwick. Most of the 2 million (47% inbound) passengers who used this airport in the last twelve months were carried by Ryanair.

Impact on the Scottish economy, £89 million per annum.

1,500 to 2,000 (full time) jobs in Scotland, 620 to 720 in Ayrshire.

90% of passengers described the cost of the flight as an “important” or “very important” reason for taking the trip.

Ryanair expects to fly 1.9 million passengers through Glasgow Prestwick in the year to 31 March 2004 based on 21 flights a day (NB. Relative to Wellington this is fewer aircraft movements because Ryanair flies larger 737-800 with an average load of over 160 passengers per flight).

Scottish Enterprise Chief Executive Evelyn McCann noted. “The presence of budget airlines like Ryanair at Prestwick is a key economic success factor both at a local and at a national level. Without a low-cost carrier such as Ryanair flying from Glasgow Prestwick, the evidence provided by this survey suggests that a significant proportion of passengers would not be setting foot in Scotland or Ayrshire at all.”

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Aerial View of Whenuapai Airport

Aerial View of Wellington International Airport

48 49

To convert, even if gradually, Whenuapai Airport to civil use will require a number of regulatory approvals.

The nature of the approvals, and the likely difficulty in gaining them, will determine the type of air services using the Airport and their frequency.

At present (Airways Corporation data 2001) the Airport has 22,000 movements a year. It also has events such as night-time engine testing. Initial analysis of the noise envelope of start up civil operations is that they will fit comfortably within the envelope utilised by the military.

As an indication of scale it can be noted that the ten-year target for Whenuapai will be about 2 million domestic and international passenger movements a year.

The number of aircraft movements that may be associated with this level of passenger throughput can be inferred from Wellington International Airport. In the twelve months to 31 October 2003, Wellington accommodated 3,700,000 domestic and 440,000 international passengers. Halving the number of aircraft movements gives an idea of likely Whenuapai throughput:

International Jet 2,447

Domestic jet 12,407

Domestic prop 36,517

On an average day there would be 20 jet take-offs and 50 turbo-prop take-offs. This is about three times the current level of activity, however the nature of the activity would be very different to that experienced now. Some local residents will notice a quieter airport and some will notice greater noise.

The exact consenting process for civil operations at Whenuapai has yet to be determined. Residents will have an opportunity to present their views and to have these views taken into account by a regulatory authority in determining the airport sound envelope and hence times and frequency of use.

In reaching a decision on such matters, a regulator will take into account a wide range of environmental, social and economic factors.

Civil Aviation StandardsThere has been little investment in the aviation infrastructure at Whenuapai for a number of years. Further, certain of the standards used to lay out the airport, such as taxiway – runway separation, are below that which is required for some levels of civilian operations.

Bringing the airport up to Civil Aviation standards will require investment and will face a number of challenges. There are however a range of options as to how the redevelopment is progressed:

The type of civil operation will influence the type of compliance required.

Compliance may be delivered through upgrading infrastructure and/or changing operating procedures.

An initially favoured model is for Whenuapai to be managed to comply with CAA requirements in a manner that is akin to Palmerston North or Hamilton (as opposed to Mangere or Christchurch).

Auckland Airport, as an example, invests in infrastructure to deliver the highest quality airfield for the largest aircraft. Whenuapai’s customers will be operating smaller aircraft on the low-cost airline model. This increases Whenuapai’s options, at least in the short term as volumes are building.

Whenuapai need not offer a precision approach with its consequential costs. However, accepting a less demanding standard means accepting some limitations on operations so that compliance is achieved through procedural methods rather than capital investments.

Infratil/Wellington International Airport Experience: SafetyWellington provides a model for optimising the cost/benefit of CAA compliance that is directly comparable to Whenuapai. Wellington International Airport occupies only 110 hectares of inner city land, bordered by sea at either end, hills to the north and west and housing close in to both sides.

These physical restrictions mean that in some areas it is simply impossible to deliver compliance through capital investment and Wellington International Airport has had to develop operating procedures to achieve compliance. For instance, the taxiway at Wellington is only 101 metres from the runway (standards require 168 metres), and the strip width is 150 metres (precision approach standards require 300 metres). In these instances the airport has worked proactively with CAA and airlines to place constraints on the way business is conducted to achieve acceptable safety observance.

This attitude and approach will be necessary at Whenuapai especially during the civil operation start up period. The experience and expertise of Wellington International Airport in these areas is unique.

Infratil/Wellington International Airport Experience: Community Relations & Environmental In its 2003 annual report, Infratil notes: As well as being a major source of economic activity for the region and having approximately 1,000 people employed at the Airport, WIAL also works with local interest groups to ensure it makes a positive impact on the immediate area. Leonie Gill, local ward city councillor who lives very close to the runway stated, “Over recent years WIAL has made a real effort to get on with its community and to be a good neighbour. Its financial support of the surf reef, which a group of local surfing enthusiasts hope to build in Lyall Bay to the west of the Airport, and its work to rejuvenate the area with a shopping mall are helping to lift the civic and economic environment.”

In addition to the requirements of CAA, Whenuapai must also comply with RMA and district plan rules. The nature of these means that fostering good relations with the immediate community is commercially essential, especially for an Airport such as Whenuapai which is in a reasonably urban setting.

Regulatory & Community Relations

48 49

When Wellington International Airport was initially corporatised it inherited poor community relations based on years of indifference on the airport’s part. Initially those in the immediate neighbourhood opposed the airport in all manner of areas.

To change this, Wellington International Airport implemented a programme of regular community consultation meetings and began, where practicable, to reflect community concerns in its operations.

As the airport’s financial circumstances improved it has also been able to invest in its appearance and to provide financial and other support to community initiatives.

The commissioning of the new terminal resulted in a significant improvement in community attitude towards Wellington International Airport. A 2002 survey found that 99% of Wellingtonians felt that the new terminal was better, or much better, than the old one.

In recent years Wellington International Airport has also provided support for the development of a new surf reef in Lyall Bay and the south coast aquarium. Perhaps more importantly it has started to function as the regional gateway by hosting events and displays that relate to events occurring within its region.

The Partners bring ideal credentials and expertise to the task of building good relations with the immediate community. Infratil’s, care of its dealings at Wellington, Waitakere City Council’s, care of its usual roles of dealing with, and on behalf of, its community.

NoiseIt is apparent from media coverage and face-to-face feedback that there is concern about noise from people living in Herald Island, Greenhithe and Paremoremo.

Some people have indicated that they are not happy with the noise associated with aircraft movements, especially given the target of approximately doubling movements from current levels over the next 10 years.

In some instances it will not be possible to reconcile the residents to the civil use of Whenuapai Airport, but the Partners’ objective in the first instance will be to ensure that these residents have a better appreciation of the scale of the issue. A great deal of the concern expressed thus far is unwarranted given the actual level of noise that will eventuate, even if the Airport is very successful.

It is take-offs rather than landings that generate disruptive noise. 80% of take-offs will be to the west over very sparsely populated areas.

On the 20% of days when take-offs are going east (potentially 70 aircraft a day) it should be noted that at Greenhithe the aircraft will be at 1,000 feet which is about the height of an aircraft as it passes Roseneath on its way from Wellington Airport. A jet aircraft at this point on take-off makes about 80dBA if you are standing outside. This is the same experience as when a diesel bus drives past you. As Roseneath residents know, aircraft noise is not a major disturbance or hindrance to their lifestyles. At 70dBA you experience the same level of noise as a vacuum cleaner makes.

The charts on the following pages show the height contours for take-offs and landings at Wellington and Whenuapai and allow a comparison of the actual noise impact (Wellington) against the prospective (Whenuapai).

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Whenuapai Departure Flight Path

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Wellington Departure Flight Path

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Whenuapai Arrival Flight Path

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Wellington Arrival Flight Path

54 55

The Waitakere City Council/Infratil proposal to NZDF/the Crown contains three key elements:

A successful civil operation as the optimal use of Whenuapai Airport in the context of Government’s wider policy goals.

If the Partners cannot accomplish the goal of developing a successful civil airport then the site will revert to the Crown for alternative use.

The successful civil airport will enhance the value of non-airport land and will result in high density, high value use of that land. In turn this will result in the derivation by the Crown of the highest value from the site.

The Crown will benefit from the site being put to its highest and best value use and will carry negligible risk.

Optimal ValueTo illustrate how the value of surrounding land is likely to be enhanced by the development of a successful civil airport, recent market evidence from Mangere and the Whenuapai area is noted below.

Recent sales of bare, but developed, commercial and industrial land near Auckland Airport have been at $120 – $150 per m2. This developed land value reflects an estimated $35 m2 development cost. It also includes a developer’s margin of approximately $50 m2.

These figures come from TTP’s recently concluded sale of their development property, Airpark 1. Airpark 2 is now being marketed. TTP paid approximately $30/m2 for the 87 hectares that make up the two Airparks. It spent approximately $35/m2 on development. 81% of Stage 1 was marketable land. 73% of Stage 2. Stage 1 was sold for $120 – $140 m2 and Stage 2 is on offer at $140 – $150 m2.

Recent sales of life-style blocks in the vicinity of Whenuapai have been at between $20 and $60 per m2. The wide range apparently reflecting buyers’ estimates as to the relevant land’s likely future use. If the zoning is unlikely to change in future the value is at the low end of the value range. If the land is considered likely to be brought into higher density use reasonably quickly the value will be at the top end of the range.

The key determinant of land value is the use to which the land may be put and how quickly this may occur, although other important factors include the cost of land restitution, the cost of land development and the amount of a block that can be sold into productive use.

As has been identified in the Waitakere City Council submission, Council’s compliance with the Auckland Regional Growth Strategy, The Auckland Regional Policy Statement and its own district plan goals make it unlikely that this site would be zoned for high density residential use even over the medium term. In this context, zoning for ancillary commercial/ industrial use would only be consistent with the planning framework if undertaken as a part the development of successful civil aviation operations. This means that the alternative use value should be taken from “life-style” blocks, ie. in the vicinity of $20 to $60 per m2, minus the restitution cost and minus the cost of land that is consumed by the development, ie. as roadways, etc.

Risk MitigationThe Partners’ proposition for the development of civil aviation at Whenuapai entails:

The Partners will establish an Airport Company to lease capacity at Whenuapai from NZDF.

During an initial period, perhaps of four years ( ie. until when military use is expected to end), the Partners will work out the land use plan for development of the Airport and the surrounding site. It is likely that this would occur in conjunction with NZDF and/or other Government agencies.

During this initial period, the Partners would commit to undertake investment to allow the long-term civil operation of the Airport.

Also during this period the Partners and the Crown would agree milestones that would designate whether the Airport was on track for successfully civil development, eg. by achieving certain stipulated passenger numbers within a 10-year period.

The Partners and the Crown will have an agreement to share the benefits of development of the non-aeronautical areas of the Airport.

If the agreed commercial and passenger milestones are not achieved, the Crown would have the right to terminate the Partners’ rights and to progress such other disposal plans that may then be preferred.

Fair Value & Risk Mitigation

54 55

Infratil was chosen by Waitakere City Council as its partner in the development of Whenuapai Airport because it provides exactly the capabilities and expertise necessary.

Infratil is a New Zealand owned and domiciled public company with a track record of successful infrastructure investment, management and development. It has sufficient capital resources to finance the development of civil operations at Whenuapai. It is listed and has a strong reputation for clear and comprehensive communication with the market.

Infratil owns 66% of Wellington and 100% of Glasgow Prestwick international airports. Two investments that have been highly successful and are managed to “world’s best” standards.

Infratil has direct international experience in providing airport facilities to the low cost sector through its operation of Glasgow Prestwick International Airport.

Infratil’s management have experience of a wide variety of airports, including airports with joint military-civil operations and “brown fields” airports that have required comprehensive development of infrastructure and services.

Infratil has co-investment expertise with local authority and community shareholders.

Infratil RolesInfratil’s role in its partnership with Waitakere City Council will be to build and finance a strong and successful business, including:

Develop airline, passenger and business support for the use of Whenuapai.

Manage, plan and finance Airport expansion programmes to ensure cost effective provision of attractive and operationally efficient aeronautical services and passenger terminal facilities.

Assist with maximising property development opportunities.

Integrate the Airport activities with those of the surrounding community to maximise the Airport’s contribution to the regional economy and to develop a constructive relationship with nearby residents.

Infratil Credentials: Wellington International Airport (66% Infratil-owned)Infratil took ownership of Wellington International Airport in 1998. Since then:

The $120 million terminal area has been commissioned.

Income from terminal facilities (such as retail concessions) increased 19% per annum.

Aeronautical income rose 11% per annum.

Operating costs fell 2% per annum. (The decline would have been 4% per annum, but for a $1.0 million increase in insurance costs post September 11.)

EBITD rose 20.3% per annum.

The Airport has weathered the failure of Ansett and has recently concluded price resetting with its major airline customers, including reaching agreement with its major airline, Air New Zealand.

A major commercial development has commenced.

Wellington International Airport is a complex and difficult business to optimise. It is situated on a small site in a highly built area. Over 70% of aeronautical income is derived from a single airline, which is attempting to merge its local activities with the airport’s second most important airline customer. Over the last five years the business focus has been to achieve highly efficient operations and to maximise revenues from its primarily domestic passenger base.

Comparing Wellington’s operational and financial performance with the international survey compiled by the UK Transport Research Laboratory shows the airport to be managed to world best standards.

The above have been achieved in partnership with Wellington City Council the 34% shareholder. Infratil and the City have maintained excellent relations notwithstanding that commercial and civil goals are not always coincident.

Infratil Experience and Credentials

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56

Infratil Credentials: Glasgow Prestwick International Airport (100% Infratil-owned)Glasgow Prestwick International Airport has several features directly relevant to Whenuapai:

Glasgow Prestwick is Glasgow’s second airport (Glasgow’s population is approximately 650,000 and, unlike Auckland’s, is essentially static). Its business focus is on low-cost passenger services (mainly from Ryanair) and B747 freighters. The Airport was facing decommissioning until these two activities were developed.

Infratil’s initial investment cost reflected the Airport’s marginal business case at that time. The current value reflects the huge growth in passenger throughput (up over 100%) since January 2001.

The Airport has a material military presence, both from itinerant use and a permanent navel sea rescue operation base.

The commercial goal at Glasgow Prestwick is to maintain aeronautical services/facilities to suit low-cost carriers, while increasing passenger services/facilities to build per-passenger value.

Infratil Credentials: Management ExperienceInfratil’s manager, HRL Morrison & Co Limited (“Morrison & Co”), has undertaken numerous airport transactions and has been responsible for the acquisition, transition and ongoing management (in addition to Wellington and Glasgow Prestwick) of Perth International Airport (5 million passenger movements per annum, A$643 million acquisition cost) and the Australian Northern Territory airports at Darwin (1 million passengers), Alice Springs and Tennant Creek (0.8 million passengers) at a cost of A$110 million.

In all of these instances the acquisitions involved all aspects of arranging financing, valuing the business, closing the purchase, ongoing financing of the relevant airport and its day to day and strategic management.

In addition to these successful transactions, Infratil’s management have also been engaged in seeking out further opportunities for Infratil in Europe and North America. In both regions the focus has been on airports that are very similar in circumstance to Whenuapai.

Airports that have undeveloped infrastructure, usually because their prior use was military.

Partnerships with community interests.

Airports where airline interest is being driven by the huge growth of low-cost carriers such as Ryanair, which wish to escape the congestion they are creating at existing airports and are willing to align with low-cost airports.

Infratil Credentials: Joint Civil/Military AirportsAt Whenuapai the relationship with the military users of the Airport will clearly change over the next five years. Initially it is contemplated that civil operations will be a minor part of the Airport activities, but these will build up and the civil/military roles will be reversed.

Infratil’s management have had experience at each stage.

At Wellington there is a RNZAF terminal and occasional military movements.

At Glasgow Prestwick there is a permanent air naval establishment that provides sea surveillance and rescue services and has priority over civil operations. In addition, the airport frequently hosts itinerant military aircraft movements.

Darwin Airport is a joint use airport with the Royal Australian Air Force. Both day to day operational arrangements and longer term maintenance of common infrastructure, capital expenditure, master planning and development, etc. are covered by a comprehensive joint use agreement.

Infratil Credentials: Co-investment with Local Authority & Community InterestsInfratil was established at a time when Government policy changed from comprehensive Government (local and central) ownership of infrastructure to the encouragement of private capital and management disciplines. Most of Infratil’s New Zealand investments have subsequently occurred alongside or in partnership with community interests.

TrustPower: Rotorua Electricity Charitable Trust, Tauranga District

Council, Tauranga Energy Community Trust.

CentralPower Palmerston North City Council, CentralPower

Electricity Community Trust.

Powerco New Plymouth District Council.

IO Fund Christchurch City Council’s Orion Limited.

Port of Tauranga Bay of Plenty Regional Council.

Wellington Airport Wellington City Council

Whenuapai Airport Waitakere City Council

Infratil Credentials: Investment StrategyInfratil’s investment strategy entails:

Investing in utilities and infrastructure where there is a prospect of above average risk-adjusted returns. Usually related to a “step change” in value and/or a willingness to take a long-term view.

Investing for the long term.

Investing where Infratil has expertise and can add value to management via control or influence.

The very long-term focus and provision of a strong expertise base to the fields where it invests make Infratil a unique infrastructure investor in New Zealand.

Infratil ManagementInfratil is managed under contract by Morrison & Co. Morrison & Co has offices in Wellington, Brisbane and Berlin.

Infratil’s management has industry expertise in the fields of airports and renewable/waste energy generation and marketing.

56

Support Submission of Te Kawerau a Maki

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Minister of DefenceNZ Defence ForcesDefence HouseMolesworth StWellington

Tena koe e te rangatira.

I write to you in respect of the Whenuapai Airbase.

Firstly, Te Kawerau a Maki are the mana whenua of Waitakere City and surrounding areas. Te Kawerau a Maki Tribal Trust is the mandated legal entity that represents Te Kawerau a Maki iwi. We are the northern most iwi of Tainui and have lived in this area for over a thousand years, descending from our ancestor Maki. Our mana whenua status and interests in this area are well documented through the records of the Maori Land Court and in claims before the Waitangi Tribunal. We have historical interests in Whenuapai and are undeniably the iwi group with interests most closely associated with the land.

It should be made clear that Te Kawerau a Maki has a strong working relationship with Waitakere City Council.

In many quarters – including the Ministry of Maori Affairs – the relationship is hailed as a model of how local government and iwi can work constructively together. Waitakere’s Eco City philosophy of sustainable economic, social and environmental development sits comfortably within a Maori dimension.

The retention of Whenuapai Airbase and its infrastructure is another project that Te Kawerau A Maki looks forward to working with the Council and its commercial partner, Infratil, on.

Te Kawerau A Maki, therefore, strongly supports the proposal as presented by Waitakere City Council and Infratil and we are pleased to append our submission to theirs.

Employment and Economic Development: Employment opportunities for all people in the City – and most particularly the 13% of Maori residing in Waitakere – is crucial if the region is to develop further. An airport, supported by surrounding business will advance a range of economic and social challenges that face Waitakere City.

A commercial airport and the economic activity that will spring from it is the only sustainable option open to Crown decision makers.

It fits with a number of central and local government strategies, including the Auckland Regional Growth Strategy, NZ Sustainable Development Strategy, AREDS (Auckland Regional Economic Development Strategy) and Waitakere City’s own Long Term Council Community Plan.

Te Kawerau A Maki is, also, well positioned to capitalise on possible tourism opportunities (NZ Tourism Strategy) that may arise.

We note that should Whenuapai be retained as an airport, considerable infrastructure work will be carried out. Te Kawerau A Maki has a proven track record in working with regulatory authorities, particularly Waitakere City Council, on resource consent applications for major projects.

The iwi has also been closely involved in physical construction and architectural design; projects include the $14 million West Wave Aquatic Centre development recently opened by the Prime Minister and the $25 million Waitakere Stadium, due to be completed in June 2004.

Other Options:Other future use options for Whenuapai presented by New Zealand Defence Forces give rise to some concern for iwi. The base borders the upper reaches of the Waitemata Harbour, a traditional food “basket” for iwi. In recent years stormwater run – off and other pollutants have seriously degraded the water quality in the Harbour. We view the option of intense urbanisation (or housing) with associated stormwater and sewage issues with particular concern in this regard.

On the other hand, the investment in infrastructure planned by Infratil could indeed improve the current environmental situation.

Further, by raising the possibility (and therefore public expectation) of housing, shopping malls, entertainment precincts etc, the Crown (NZDF) has clearly overlooked its obligations to iwi in terms of the offer back process under the Public Works Act, 1993.

Consultation Process:In closing, Te Kawerau A Maki is pleased to have the opportunity to present this submission in support of the Airport option.

However we ask it to be placed on record that we are concerned that there has been no formal contact between Crown officials and iwi on this matter.

We sincerely hope – indeed expect – that during Stage 2 of its consultation on Whenuapai, the Crown will engage more openly with Te Kawerau A Maki on this important matter.

Yours truly,

Te Warena TauaChairman

Te Kawerau a Maki Chairman’s Letter

the case for whenuapai airport – why retaining whenuapai ...nzier report july 2003 counterfactual...

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