Why Retaining Whenuapai Airport and Developing It for Commercial Use

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

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.

Waitakere City Council Enterprise Waitakere Infratil Limited Te Kawerau a Maki 1 1

Recommendation

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.

Waitakere City Council Enterprise Waitakere Infratil Limited Te Kawerau a Maki 2 3

The Crown has decided to vacate Whenuapai: Whenuapai already exists as Auckland’s second fully functioning  Air force to shift to Ohakea over a 5 year period International and Domestic airport:  Why destroy a value enhancing piece of Infrastructure?  The Minister of Defence is required to recommend to Cabinet by the end of March 2004 the most logical future use of Whenuapai,  The cost and time to upgrade is modest in commercial terms, and the process for disposal of the airbase: and well recognised by Infratil which is providing the The Government is seeking feedback on what future use or uses of development capital. the site should be:  The opportunity cost to the Auckland Region of destroying  New Zealand Force discussion document, October 2003. Auckland’s second and functioning Airport is considered This is the submission of Waitakere City Council and interested significant. The cost and difficulty of creating a second airport for parties: Auckland in the future, at another location, would be immense.  Waitakere City passed 11 resolutions in December 2002 Whenuapai as an airport can save the Auckland Region $341million detailing its commitment to retain Whenuapai as an International in future transport costs: and Domestic airport.  Auckland regional transport model used to measure.

 Waitakere City entered a partnership agreement with listed  Whenuapai is more conveniently located for at least half of the infrastructure investor Infratil Ltd, to provide the resources and regions citizens. expertise needed to transform Whenuapai from a military to The Whenuapai land has no strategic value to Waitakere City if it Commercial Airport, with associated commercial and industrial is not a commercial airport: development.  Waitakere City’s and the Regional Growth Strategy already  Enterprise Waitakere is a trust established to proactively identifies other areas of land for future industrial, commercial encourage economic development within Waitakere City. and residential use.

 Te Kawerau A Maki is the mana whenua of Waitakere City  Land becoming available at Whenuapai as a result of the The loss to Waitakere City resulting from the Air Force leaving Air Force withdrawal has no strategic benefit for the city, Whenuapai is estimated at $230 million pa including 1647 jobs and unless a commercial airport is developed. 826 families:  Unused Whenuapai Airbase will be a significant liability to the  NZIER report July 2003 owners and to the City, possibly for decades.

 Counterfactual compares it to surrounding rural residential.  Waitakere City’s development corridor is planned to proceed along the edge of the Metropolitan urban limit ( which Whenuapai  Potential for significant social and economic disruption to a nascent City. is well outside) and along state highway 16 to the west. If not retained as an airport the Crown or Waitakere City can not  The loss is equivalent to 135% of the City Council’s annual expenditure undertake any commercial or industrial development as a public work:  NZDF is Waitakere City’s largest employer  A designated operational airport offers the widest range of Besides mitigating those losses, Waitakere wants to use the development options. opportunity to build a future economic generator for itself and the  Waitakere City and Infratil’s proposal envisages commercial and North Western sector of the Auckland region: industrial development associated with a commercial airport.  Commercial Airports become economic generators by providing enhanced connectivity to and from a defined region.  The Public Works Act disposal process must be followed if Whenuapai is not retained as an airport. It could be decades  The Economic Impact of the US Airport Report, 2002 before anything is able to happen on the land, which also requires demonstrates the value of airports. expensive remediation if it is not to be used as an airport.  Commercial Airports attract commercial/private sector  It is estimated that to dispose of the runway would require the investment removal of 46,000 truckloads of concrete. This equates to 200  Why destroy a valuable piece of infrastructure which has truck movements per day for a year. the potential to drive economic growth, improve traffic flows,  There is uncertainty, delay and loss of control for the Crown and employment and assist tourism? Waitakere City if airport operations cease and the Public Works Whenuapai is situated at the center of New Zealand’s fastest Act disposal process is invoked. 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. 2 3

Whenuapai as an airport can redress economic loss to the North Infratil and Waitakere City are essential partners for success: West Auckland Region and add more jobs than those being  Infratil is a respected international advisor and investor in removed by the Crown: airports.  BERL report 2002  Infratil has access to capital, long term commercial vision,  The Economic Impact of U.S. Airports, 2002 and international experience and success at Airport Mangere will face complementary competition: development, including mixed civil and military  Mangere is a long haul airport charging aircraft on a weight basis.  Waitakere City has developed and implemented world class sustainable city policies and practices  Whenuapai will have a different model and the ability to relieve Mangere of the low value aircraft movements. Wellington Airport’s successful rejuvenation is a model to follow:  The rejuvenation of the facilities at Wellington is a testament  Competition must enhance the attractiveness of the region, and New Zealand to Airlines and travellers alike. to Infratil’s skill in the successful management of Airports.  Wellington Airport’s enhanced relationships with its neighbours  Competition will be good for both Whenuapai’s and Mangere’s customers. highlight best practice behavior for a public/private infrastructure asset. The Whenuapai airport proposal represents a sound commercial model. The airline market is moving in the direction that Whenuapai Only Development Dollars at risk are the commercial investor’s: will take:  Infratil will contribute all the development capital required.  Low cost no frills air travel is a successful and profitable  Waitakere’s partnership with Infratil allows the City to contribute business model capital and acquire a shareholding only if it chooses to do so.

 Regional short haul is strong for low cost no frills  Infratil is realistic about the potential costs and capital it must provide for a successful redevelopment of Whenuapai as a  Air travel is growing strongly, creating the need to build new airports and/or expand existing ones. commercial airport. The 5 year phase down is a perfect window to test the thesis:  hub and spoke model increasingly complemented by point to point  It’s not unusual for military and civilian activities to co-exist, with proper safeguards.  Early stage positive interest from International Airlines.  Any other use for the Whenuapai land could be decades away Public support for Whenuapai as an airport is high:  Whether or not commercial operations can begin during the  Recent region wide polls show strong public support for an airport at Whenuapai five year period, it makes sense to test the commercial airport model first, since choosing any other option involves destruction Whenuapai as an Airport provides positive assistance to the NZ of the existing airport infrastructure. Transport Strategy, the Tourism Strategy, and the Sustainable Cities programme:  The 5 year period allows time to test the commercial viability.  Tourism; Low cost no frills will be particularly important in driving  All other options still remain open if the commercial airport traffic from New Zealand’s biggest inbound market, Australia. cannot be made to work.

 Tourist ventures in the north and west will benefit from an The most logical future use for Whenuapai is: airport at Whenuapai.  As an Airport with ancillary surrounding Commercial/Industrial  Transport; $341m benefit for no input. and Urban development.

 Sustainable cities; local jobs, less traffic congestion, less The best process for disposal is: environmental impacts on the region.  For the Crown to act both proactively and transparently in Waitakere City’s local Iwi support Whenuapai’s redevelopment partnership with Waitakere City and Infratil to produce the as an Airport: best outcome in a timely manner.  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. 4 5

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

REGIONAL POPULATION DENSITY

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Contents

Waitakere City Council Submission 7 5. Economic 14

a) The Regional Economy 14 1. Introduction 8 i) Prescriptions for Growth 14 a) Air Force Leaving Whenuapai 8 ii) Collaboration Required 14 b) Significant Economic Loss 8 iii) Traffic Congestion 14 c) What Is Required to Address these Losses? 8 b) The Auckland Regional Economic Development Strategy 14 d) Airports Are Catalysts for Economic Development 8 c) The Waitakere Economy 15 e) Partnership Approach with Crown 8 i) Local Jobs Required 15 f) Connectivity and Competitive Advantage 9 ii) A Breakdown of the Waitakere City Economy 15 iii) Waitakere Growth Prospects 15 2. Addressing the NZDF Discussion d) Whenuapai Airport 15 Document 10 i) Complementing Current Development 15 a) Options 10 ii) Connections with Other Cities 16 b) Considerations for Evaluation 10 iii) Employment Opportunities 16 c) Additional Considerations which NZDF Will Evaluate 10 e) The BERL Report 16 d) Desired Outcomes 10 e) Waitakere City’s Objectives for Whenuapai 10 6. Infrastructure 17 a) The Airport Already Exists 17 3. The Logical Choice for i) Challenging a Monopoly 17 the Government 11 ii) A Once Only Opportunity 17 a) The Disposal Process 11 b) Seeking to Leverage the Region’s Natural Advantages 17 i) Disposal under the Public Works Act 11 c) The New Zealand Tourism Strategy 17 ii) Creation of Airport under the Airport Authorities Act 11 b) Fragmentation of the Land has Risks and Cost 7. Strategic Fit 18 to Waitakere Ratepayers 11 a) Consistency with Local and Central Government Policies 18 c) Local and Regional Planning Will Affect Outcomes 11 b) Government Initiatives for Auckland 18 d) Commercial Airport Option Enables Reuse of Asset c) Auckland Regional Growth Strategy 18 and Adds Value 11 d) Regional Growth Strategy Implications for Whenuapai 18 e) Quick and Efficient Exit Process with Widest Options 12 e) Northern and Western Sector Agreement 20 4. The Case for Retaining the Existing Airport f) Fastest Growing Region in New Zealand 20 and Developing It for Economic Use 13 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 6 7

8. Transport 23 12. Alternative Options 30 a) Impact on North Shore and Rodney 23 a) Public Work and/or Urban Development 30 b) Traffic Demand Management 25 b) Industrial/Development Site 30 c) Public Transport Stimulated 25 c) Rural Residential Sites 30 d) Benefits to Regional Road Users from Having d) Combination of the Above 30 an Airport at Whenaupai 25 e) The Major Variables Affecting the Results Are: 25 f) Investing for Growth: the Government 13. Community Views 31 Transport Package for Auckland 26 a) Public Opinion Surveys 31 9. Partnership 27 b) Iwi 31 c) Business Community 31 a) Cooperation and Collaboration Is Essential 27 d) Opposition to Proposal 31 i) New Local Government Powers and Responsibilities 27 i) Comment on Expressed Opposition 31 ii) Working Together 27 ii) Residents under Flight Paths 32 b) Crown Decision Will Change Council’s iii) Other Grounds for Opposition Revealed Growth Planning 27 in TNS Survey 32 c) Existing Airport Gives Land Strategic Value 27 14. Conclusion 33 d) Existing Growth Management Framework 27 a) Recommendation 33 10. Experience 28 Supporting Submission of Infratil Limited 34 a) Commercial Partnership with Infratil 28 b) Airport Expertise 28 Supporting Submission of c) Ownership and Capital Resources 28 Te Kawerau a Maki 57 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 6 7

Waitakere City Council Submission

Year commercial operations ceased at Whenuapai 1966 People employed at Whenuapai 1420 Number of years before the Airforce departs 5 Size of land of base 311 hectares Kinds of aircraft using Whenuapai Hercules, naval helicopters, Air Force 727’s, Fokker Number of take offs and landings a year at present 22,000 Noise levels Commercial aircraft are quieter than military aircraft and fewer flights are envisaged initially How does the city recognise the airbase? Through the District Plan What is the underlying zoning of land? “Countryside living” Number of people living within 16km of Whenuapai 453,000 Number of people living within 16km of Mangere 442,000 Proportion of Waitakere residents who work outside the city 60% Who is providing the development capital? Infratil 8 9

1 Introduction

a) Air Force Leaving Whenuapai commercial and industrial areas. For this competitive advantage Following a Cabinet decision to consolidate RNZAF activities to function, it is essential not to destroy the airport, creating at Ohakea, the Government has announced its decision to bare land requiring considerable and costly remediation with undertake a staged withdrawal of the Air Force from Whenuapai no particular features to distinguish it from any other available over a five year period. land. Waitakere City already has plans for other areas to be The New Zealand Defence Force is conducting a consultation used for industrial, commercial and residential activity which process on four main options for future use of the land. are consistent with regional policies to contain urban sprawl. These include converting the airport to commercial use, d) Airports Are Catalysts for Economic Development public work/urban development, industrial/commercial uses Waitakere City is an “edge city” characterised by its post-war and rural/residential. The Minister of Defence is required by suburban development with reliance on the motor car and the Cabinet to recommend to Cabinet the most logical use of separation of the functions of a city, such as work-places remote Whenuapai and the process for the disposal of the airbase from living areas. For Waitakere City this means that over 60% by the end of March 2004. of its workforce commute out of the city for employment. b) Significant Economic Loss Employment within the city is dominated by low-paying service Whenuapai Airport is located within Waitakere City. As a military type jobs. installation Whenuapai Airport has contributed significantly to the Over the last 10 years Waitakere City Council has sought to attract social and economic well-being of Waitakere City for many years. higher-paying jobs to suit its predominantly blue-collar workforce The withdrawal of the Air Force will have a significant negative through targeted cluster development centred around clear impact on the economy of Waitakere City, unless alternative competitive advantages. This has begun the positive transformation uses are found to address this loss. to a higher rating base, which has allowed Waitakere City to fund Waitakere City and its economic development agency, a broader range of amenities at a higher standard. Enterprise Waitakere, commissioned the New Zealand Institute Waitakere City’s primary objective is to develop an economy and of Economic Research to undertake a social and economic society that supports sustainable urban development by reducing impact assessment of the impending closure of the airbase. reliance on the motorcar, providing local employment opportunities In summary that report found the following: and addressing the financially unsustainable situation of a City that has evolved without a solid commercial sector.  The withdrawal of the Air Force will result in a loss within Waitakere City of $230 million per annum. Commercialisation of Whenuapai Airport supports the Regional Growth Strategy and Central Government investment in  The loss of the Base’s 1,061 (full-time equivalent) jobs would Auckland transport infrastructure through the creation of local result in the loss of an additional 586 jobs in Waitakere City. employment and local economic stimulation. This helps address The two principal contractors employed by the Base expect the economic issue of Auckland’s urban sprawl and its effect on to make 90 staff (75 full-time equivalents) redundant following travel demand patterns. its closure. Other local businesses are likely to experience a short-term decline in sales, until the houses currently occupied Through a Crown decision to relocate from Whenuapai Airport, the by Base staff are reoccupied. city is now facing an estimated $230 million per annum in economic loss. Waitakere City is seeking the chance to reinvent a community c) What Is Required to Address these Losses? through the reuse of an existing infrastructure asset. Making more industrial, commercial and residential land available To achieve this aim, the cooperation of central, regional and local is not the best way of mitigating this loss. The City government is required to implement a comprehensive plan for is already planning to ensure that there is a staged release of addressing the economic, social and environmental loss, in a industrial and commercial land in its planned new growth areas, manner that benefits the Auckland region and New Zealand as which are identified in the Auckland Regional Growth Strategy. a whole. Making land available at Whenuapai for these purposes will provide The retention of Whenuapai as an airport is the only mechanism no particular reason for businesses to relocate to Waitakere City, available to allow comprehensive planning and development other than those who would naturally relocate there anyway. over time within the existing national, regional and local The NZDF wish to dispose of the Air Base provides a unique planning frameworks. opportunity to use this asset in a way that attracts new businesses to the region through reuse of the existing airport asset as a e) Partnership Approach with Crown commercial airport and for ancillary industrial and commercial uses. Recognising that it does not have the access to capital or other In addition to direct benefits generated by a commercial airport resource on a scale that would enable this to happen in the short operation, this will stimulate economic development by the creation term, Waitakere City has initiated a partnership with Infratil of a new competitive advantage for planned new and existing Limited, a listed Wellington based company to provide capacity and expertise in developing infrastructure alongside local government. 8 9

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 Advantage The 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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2 Addressing the NZDF Discussion Document

The NZDF discussion document identifies options for the site and e) Waitakere City’s Objectives for Whenuapai describes both considerations for evaluation of the options, and a With the closure of a large military industrial facility there are range of desired outcomes. a number of issues of particular concern for the Council. These are as follows: These are as follows: 1. The social and economic impacts of the closure are a) Options addressed and mitigated.  Commercial Civilian Airport 2. The transition to future uses is commenced as soon as  Another Public Work and or Urban Development possible so that the adverse impacts of the closure of the  Industrial/development site base can be progressively addressed.

 Rural residential sites 3. Future development of the land is carried out in a planned and comprehensive manner and maximises and compliments  A combination the future development of the Waitakere City’s Northern b) Considerations for Evaluation Strategic Growth Area.  take account of NZDF operational and wider security issues; 4. Future development does not compromise Waitakere City’s  protect the Government’s wider interests in the property; or region’s growth strategy.

 use existing statutory processes in a transparent manner; 5. That a potential future economic growth engine is not lost without being tested.  provide a quick and efficient exit process for the NZDF; and 6. The infrastructure liabilities that go with the land are  provide a fair market return to the NZDF. addressed in a manner that allows for the ongoing use of c) Additional Considerations which NZDF Will Evaluate physical resources without impacting on the ratepayers of  Amenity, facilities the city. The existing infrastructure that services the base (Continued use of swimming pool, playing fields, golf course, is past its economic life and likely to need replacing at an availability of airfield for civilian flights). estimated cost of $20 to $30 million.

 Noise Disturbance 7. The Government and Waitakere City adopt a partnership approach to future use of the base so that protracted and  Impact on those living and working close to the airport. unproductive litigation is avoided. The complex issues and  Infrastructure Intentions and Plans liabilities that go with the land and potentially fall to the  Impact of possible upgrade of sewerage services along Council to address should the land holding be fragmented, Hobsonville corridor to cope with projected growth. need to be recognised by the government, and managed to avoid cost being passed to the City’s ratepayers.  Environmental Considerations 8.The impacts of the closure of the military airport on the civil  Impact on the Upper Waitamata Harbour. Historical and architectural considerations. Views and appearance of the site. defence capabilities of the city and the region are considered and addressed.  Iwi and Maori Representation 9. The government makes a timely decision so that meaningful  Views of interested groups. progress can be made in addressing the social and economic  Local Economic Benefits impact of the Defence Force’s departure, and so that the City can take into account implications for its long term development  Contributions to local and regional economy and jobs. planning, and so that the community is given as much certainty d) Desired Outcomes as possible of the 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. 10 11

3 The Logical Choice for the Government

The following sections will put the case for the airport’s retention b) Fragmentation of the Land Has Risks and Cost to and in doing so will respond to the evaluation considerations put Waitakere Ratepayers forward in the NZDF consultation document. (However, some Without the airport, neither the Crown nor a local authority can of these considerations can only be evaluated if fully developed guarantee to undertake industrial or commercial development proposals for an option are put forward and assessed under the as a public work. The land must be passed to either former land Resource Management Act regime.) Preceding that is a brief review owners, through the Treaty of Waitangi Settlement mechanism, of the disposal options available to the Crown that have major or disposed of directly to the open market. Disposal through offer- impacts on the final decision that the Crown can make. back or to open market creates significant issues for the City.

a) The Disposal Process Firstly, it presents some strategic development issues as the The NZDF document identifies a number of potential options for land sits outside the Region’s planned growth area and the ability to the future use of the land. However in reality the future uses of the manage desired outcomes is constrained by the individual owner’s Airport is determined by the disposal process as the government aspirations and the provisions of the Resource Management Act. has stated that it will use existing processes to affect the disposal Also, the land has been held and developed by the Crown under of Whenuapai. regimes that have not allowed the Council to require financial Two options have been identified: contributions, or rates. If the land is disposed of under the Public Works Act in a manner that allows the land to be fragmented (i) Disposal under the Public Works Act. without regard to the residual liabilities attributable to the way the (ii) Creation of an airport under Airport Authorities Act and land has been legitimately developed and held by the Crown for transfer of the base under this mechanism. Defence purposes, there are potentially significant costs that could i) Disposal under the Public Works Act fall on the ratepayers of Waitakere City. These would normally have The Crown can decide if it wants the land for another public work, been paid for by a developer or by the normal rating process but or dispose of it under the Public Works Act. There is effectively could now fall on Waitakere City ratepayers. only one decision for the Crown to make under this legislation. c) Local and Regional Planning Will Affect Outcomes Does it have another public work use for the land? All non-public work or non-airport options rely on the local authority If the Crown decides that it does not have a public work regulating land uses to achieve industrial, commercial or urban requirement, then the local authority can decide if it requires the residential outcomes. Within a regional planning framework that land for a public work. If the local authority does not require it for sees the Whenuapai Airport land located outside the identified a public work, it develops the regulatory framework under which growth area for the City for at least the next thirty to fifty years, the land is developed. The Crown then loses control or influence it would require a very compelling case for the regional and local over any future outcome under these existing processes. authorities to depart from a regional growth strategy developed ii) Creation of Airport under the Airport Authorities Act since 1993. Disposal under the Airport Authorities Act to a local authority d) Commercial Airport Option Enables Reuse of Asset consortium, allows the Crown and the local authority to and Adds Value undertake comprehensive planning for the future of the site with Only by retaining Whenuapai as an airport can ancillary industrial the greatest options and the greatest level of control to achieve and commercial uses be developed around it. the outcomes identified in the Crown’s consultation document. Decisions to urbanise the land should the airbase be closed, Disposing of Whenuapai as an airport provides a different statutory including commercial or industrial uses, are not decisions that planning framework by virtue of allowing the site to be designated the Crown can make under the existing legislative framework, for airport uses including those commercial and industrial uses unless an airport authority is established and the Crown retains ancillary to an airport. Mangere Airport sits outside the Metropolitan an interestin that authority. Urban Limit. Commercial and industrial development around this airport has provided significant competitive advantages to the In order to develop industrial or commercial uses, the Crown growing businesses around it. only has one option – the airport option. In order to achieve its identified outcomes, there is also only one option – that is to This process also provides the mechanism by which a smooth retain Whenuapai as an airport. By retaining Whenuapai as an transition of uses can occur. It provides for commercial operations airport, industrial and commercial uses ancillary to the primary to scale up as military operations decrease. 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. 12 13

e) Quick and Efficient Exit Process with Widest Options The 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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4 The Case for Retaining the Existing Airport and Developing It for Economic Use

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 14 15

5 Economic

a) The Regional Economy iii) Traffic Congestion Auckland has been one of the fastest growing areas of the New Transport congestion remains the key bottleneck to growth. Zealand economy over the past decade with real economic growth The economic cost of congestion in Auckland has been averaging 3.7 per cent, which is above the national average. estimated at around $1 billion per annum. Improving the However, true economic growth requires that the total income of transport sector will provide a solid fillip to growth and enhance society must rise more rapidly than the population. A better target is productivity, which, in turn drives up living standards. per capital regional GDP growth. Over the last decade, the average Progress is being made. New trains have been purchased, growth rate of per capita GDP in the Auckland region has been the existing fleet has been refurbished, the Britomart Centre below the national average. has been opened and improvements have been made to the i) Prescriptions for Growth infrastructure of the road system with, for example, the Grafton There are two standard prescriptions for increasing the region’s Gully product and the widening of the Southern Motorway growth rate. The first is to add more inputs (extensive growth). between Symonds Street and the Newmarket Viaduct. In other words, we need to add more workers or we need to add But more needs to be done in terms of adding to infrastructure, more capital equipment. The second prescription is to improve the identifying appropriate pricing mechanisms and public transport efficiency of the production process (intensive growth). In short, initiatives. Whenuapai represents one such opportunity. do things smarter and better. It is this form of growth that fosters Stronger growth will, in turn, place pressure on land resources. higher per capita incomes. Typically this means calls for innovation, Population growth may have positive implications for the economy, better education, better infrastructure, better quality jobs. but Auckland’s rapid growth has exerted pressure on the land Local and central government can facilitate the virtuous growth available in the region for residential and commercial development, circle because it can provide some services at a lower cost than transport and infrastructure. Any future development options the private sector. Free market principles do not work in some recommending more residential and/or industrial development areas, necessitating intervention. In such cases the benefits of must be considered in this context. activities are diffused through to the economy as a whole as the The Auckland Regional Growth Strategy strongly promotes land social rate of return of some activities, such as education, use intensification to minimise the negative effects of growth. exceeds the private rate of return. This involves concentrating growth around town centres and The challenge for policy-makers in both the local and central major transport routes to create higher density communities while government area is to foster an environment conducive to ensuring that beaches and green spaces are protected. stronger growth and living standards, while balancing social objectives at the same time. b) The Auckland Regional Economic Development Strategy The communities of the Auckland region are ready for sustainable ii) Collaboration Required economic development under a strategy which identifies where Greater collaboration is required and a start has been made. we are now, where we want to be in the future and how we are For example, central government has recognised the need for going to get there. The strategy not only communicates a set of a coordinated approach to economic development with closer priority activities, it provides a vision, leadership and direction to integration between the various agencies involved. Central help guide decisions about how to use limited resources and how government and local government authorities in Auckland are to manage conflicts and trade-offs. coordinating activities in several workstreams under the banner of the Sustainable Cities Programme of Action, launched in The strategy framework combines eight elements which connect Auckland earlier this year. the region with the world through an outward focus and improved regional performance on a platform of exceptional people, One of the workstreams includes joint central/local government cultures, environment and infrastructure. implementation of the Auckland Regional Economic Development Strategy. Other recent regional initiatives have included the Of particular interest to this submission are those strategies that development of a Business Location Strategy and the formation focus on improving the Region’s connectivity with the outside of the Joint Officials Group to investigate transport funding in the World and encourage the building of relationships with and Auckland region. The Tertiary Education Commission is also success in, overseas markets. Initiatives that attract Foreign working with regional groups to promote a collaborative approach Direct Investment in key sectors and that link priority industry to skills provision in the region. sectors with key markets. The key is to get the conditions right so that businesses can The region’s growth is dependent on its export performance. prosper. In looking at the Auckland region, some particular Therefore the strategy encourages dynamic, well-prepared issues can be identified as restraining business prospects. companies which are exporting successfully and focuses on These include congestion, a lack of co-ordination across companies and sectors with the potential to lead improved interested parties, and skill shortages. export success. 14 15

In summary, productivity growth remains critical to raising living other parts of the Region. Most businesses deal directly with standards. Population enhanced growth does not add materially the public, with only 31% selling mainly to other businesses. to living standards. While the pie expands so do the numbers iii) Waitakere Growth Prospects seeking a slice. Over the past decade, the Auckland region’s Development prospects for a modern economy depend on out- performance of the national average has come entirely from the quality of the workforce and the tools they have available. population growth rather than doing things smarter. If the Region Specifically, an educated workforce and access to information, is to continue to prosper it needs to manage limited resources, communication technology and connectivity are crucial. infrastructure, education of workers and the nature and way it Business size and type also affect the prospects of the does business, better. economy to adapt to changing circumstances and requirements. c) The Waitakere Economy The reality is the Waitakere City economy has not performed i) Local Jobs Required well in these crucial areas impacting negatively on the City’s Waitakere City accounts for 15% of the Auckland Region’s overall economic performance. population, but generates only 8% of the Region’s gross domestic Waitakere City is on Auckland’s periphery, so a key requirement product and jobs. Because of its lower ratio of jobs to population, is transportation links for goods, customers and employees both more than half of the Waitakere work force still commutes to jobs inbound and outbound. After a period of negative growth the in other Cities of the Region. This creates a variety of negative Waitakere’s economy expanded 1.7% over the year to March 2002 economic, environmental and social impacts. The City needs to and while the economy expanded further to March 2003 this still generate more local jobs, which means it needs more economic lagged significantly behind the regional growth. development. Factors impacting on the City’s growth prospects have been: ii) A Breakdown of the Waitakere City Economy  The defence sector declining Until recently the City was mainly a mixture of agriculture, horticulture, dormitory suburbs and a small manufacturing sector.  Some labour intensive industries relocating overseas Population growth and urban sprawl have stimulated local retail,  The slow recovery of the construction industry despite rising construction and service industries but displaced more added value house demand sectors such as agriculture and horticulture. Manufacturing has  The industries that are growing rapidly are still relatively small been gradually declining while the services sector generally has been growing as it has been globally. The City needs to improve its accessibility to markets in order to present investors with a valuable point of differentiation. Most of the 11,500 businesses in Waitakere City are in the service sector. Within this sector, business and financial services, In response to this situation the City Council has developed a construction and retailing have the greatest number of businesses draft Economic Development Strategy which integrates with accounting for 68% of all businesses located in the City. This in regional initiatives and specifically sets about addressing some itself presents a fundamental challenge to the local economy as of the fundamental issues/weaknesses impacting on the City’s these industries are more prone to the affects of market volatility. economic performance. A copy of this draft strategy is attached. Manufacturing accounts for 10% of Waitakere City businesses The strategy acknowledges the importance of Whenuapai airport with just over 1,000 business units. Waitakere manufacturers are to the health and wellbeing of the City. particularly strong in textiles and clothing, wood and wood products, d) Whenuapai Airport paper products, plastics and boat building. The clothing and textile i) Complementing Current Development sector has been impacted significantly by the removal of tariffs over The development of a commercial airport at Whenuapai will the past 5 years. complement the development of the economies in Rodney District, Property and business services has the highest number of business North Shore City and Waitakere. It will complement the Housing units in the City with 25% of the total but employ only 10% of the New Zealand planned development at Hobsonville, through City’s working population. supporting local job creation. It will also complement the planned The West is well known for its long association with viticulture and significant commercial and industrial centres within the areas of horticulture, however, with the increasing urban sprawl many of Waitakere already identified for urban growth. Redeveloping the these businesses have moved elsewhere in the region/country. airport land for other purposes will make it extremely difficult for the Auckland region to ever develop a second airport given the Waitakere City’s economic fortunes are closely linked to the near impossibility of acquiring sufficient land in an appropriate success of the Auckland Region as a whole. However, Waitakere area and obtaining the necessary consents for a new airport. City businesses tend to be smaller and less export focused, leaving them more susceptible to change in local and regional The success of modern economies relates directly to the degree conditions. Waitakere City retailers and service providers depend that the economy connects to the outside world via networks. heavily on the spending power of local customers employed in 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. e) The BERL Report An airport provides another level of connection. A commercial In July 2002 Business and Economic Research Limited (BERL) airport is an important piece of infrastructure that will supplement undertook a study of the potential benefits of a rejuvenated and support and develop the nascent economy of Waitakere City Whenuapai Airport (see appendices). The report found that and the north west region. the direct impacts of additional inbound overseas visitors to the ii) Connections with Other Cities region could generate up to 1,200 FTE’s, with an additional 800 The Whenuapai area is well connected with other regional business FTE’s as a result of the airport operation itself. The report also centres and in particular connects the creative trades workforce identified the potential of Whenuapai to expand the infrastructure of the Waitakere area, the hightech industries of North Shore City, base of the north west sector of the Auckland Region providing and the agrarian export sector of Rodney District. The Whenuapai new dimensions and a growth node for economic activity and site provides an opportunity to specifically design, develop and development. Commercial operations at Whenuapai would provide integrate an economic hub, and a gateway into nearby business a major stimulus to business service enterprises to locate in the areas. Over time industrial and commercial activities ancillary to “Northern Growth Zone” as well as a major boost to tourism, the airport activity can be developed, but only if a commercial technical jobs, and logistics industries. 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 Opportunities Whenuapai 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. 16 17

6 Infrastructure

a) The Airport Already Exists leverages natural advantages. The existence of a functioning i) Challenging a Monopoly airport at Whenuapai provides the critical point of difference Auckland has only one operating commercial airport, located at for a networked urban form that retains and strengthens the Mangere, a location which has become increasingly difficult to elements of harbour life and lush setting, social cohesion and access, particularly for passengers from the fast growing north amenity, and economic dynamism and infrastructure efficiency. and west of the Auckland region. These customers can spend Compared to this, the alternative of destroying a functioning twice as long getting to Mangere airport as flying from Mangere airport and facilities to create more bare land in Waitakere City airport to Wellington. would be an unexciting outcome, creating ownership and planning Mangere is a monopoly, owned and operated by a company and liability issues that are likely to see the land remain unused whose principal motivation is to deliver the best possible returns for decades. to its shareholders. Predictably, Auckland International Airport Ltd c) The New Zealand Tourism Strategy opposes the development of a competing commercial airport at Whenuapai. Nor is it likely to contemplate creating a second airport Towards 2010: Implementing the New Zealand Tourism Strategy elsewhere in the region. Its plan to cope with growth is to build a identifies six fundamental components focusing on the sustainable second runway at Mangere, at a cost of several hundred million development of tourism in New Zealand, including: dollars. Monopolies commonly attempt to exploit their monopoly  Focusing on quality position, particularly if the barrier to entry for a potential competition  Sustainability of infrastructure is very high, as would be the case if another operator had to acquire  land and build a new airport. Ensuring the sustainability of natural, business and social environments. ii) A Once Only Opportunity The withdrawal of the Air Force from Whenuapai Airport creates The strategy identifies that providing the infrastructure required to a once only opportunity to establish a second commercial airport for support tourism growth and development is a key challenge to the the Auckland region for a fraction of the cost that would otherwise long term sustainability of the tourism industry. One key aspect be involved, by making best use of existing assets. It is not a simple of this infrastructure will be air services to ensure tourist access issue of providing sufficient capacity to handle all commercial flights to and within New Zealand meets market demands both now and for the next 50 years. Whenuapai Airport will complement the into the future. International visitor arrivals are growing at an annual capacity of Mangere in a manner which provides the best outcomes average rate of over 6%. This means tourist numbers could easily and choices for the Auckland region, including competition, more double in 10 to 12 years. desirable traffic flows, and greater convenience. A commercial airport at Whenuapai has the potential to widen the This is not an issue about whether or not another airport operator tourism base of the country, especially as the airport will help to can build new facilities to meet future demand. It is about using an attract budget airlines. It also provides an alternative entry point existing resource as a catalyst to enhance the economic growth of to the Auckland Region, close to many iconic landscapes and north west sector of the Auckland region, retaining and developing experiences upon which New Zealand tourism is marketed, an airport in a location more convenient for half the people in the such as the west coast beaches. Alternative uses for the air Auckland region, and creating valuable benefits in terms of regional base will not generate the same benefits as a commercial airport. transport flows and as an attractor to business. Residential and rural residential development will not assist with meeting the objectives of the Tourism Strategy. 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 Advantages What Waitakere City is actively seeking to generate at Whenuapai is not just a viable commercial airport but a development which 18 19

7 Strategic Fit

a) Consistency with Local and Central Government Policies selective intensification. The strategy also highlights the importance The NZDF consutlation document notes that the decision to be made of partnerships between central and local government in ensuring by the Government must be consistent with relevant government the success of the strategy. The Regional Growth Strategy is a non- policies. Waitakere City as the Territorial Local Authority involved statutory document but has been reflected in the Auckland Regional must further ensure that any proposal fits in with its objectives and Policy Statement and it is clear that central government seeks to those agreed by the Auckland Regional Council. strengthen rather than weaken this planning. b) Government Initiatives for Auckland d) Regional Growth Strategy Implications for Whenuapai The Government announced on 19 December 2003 major funding The strategy has significant implications for the future use of the initiatives and changes to governance structures to address Auckland’s Whenuapai Airport in terms of: transport crisis. Transport issues in the regional have been identified  Residential development as a major impediment to sustainable economic development.  Employment The Government’s “Beehive” official web site contains a fact sheet  on “Auckland Transport and Governance and Regulatory Issues” Infrastructure which states:  The overall ability to manage the effects on the environment “The Government will engage expeditiously with the ARC to discuss of urban development. a change to the Auckland Regional Policy Statement to reflect key To promote the containment of urban activities, residential develop- parts of the Auckland Regional Growth Strategy and the Auckland ment is being focused around selected centres and transport hubs. Regional Land Transport Strategy in order to give clearer guidance This process is occurring quickly in the North-West, as well as other about transport priorities and integration with land use policies, and parts of the Auckland Region. A significant amount of this intensive greater certainty in the consideration of resource consents for key development is occurring on brownfields land (old industrial areas). Auckland transport projects” Mixed use, intensive development on such brownfields land makes The Auckland Regional Growth Strategy proposes strengthening sense where such development is located close to transport routes, of the regional urban form. Central government is recognising that but a consequence of the policy is that some industry is now continual urban expansion places unsustainable demands on the looking for peripheral sites. Auckland Transport Network, and that there is a strong linkage Other trends are also pushing some industry to the edges of between land use and travel demand patterns. the metropolitan area. An important trend is businesses seeking Two of the options put forward in the NZDF consultation document; accessible sites on the motorway network, away from the Public Work/Urban Development and Industrial/Commercial uses, congested inner isthmus. are contrary to the regional growth strategy and would encourage For Waitakere City these trends are recognised in its planning for urban sprawl. The Airport option supports the Government’s the Northern Growth Corridor (the area extending from Massey in initiatives by changing travel demand patterns: the west to the Upper Waitemata Harbour to the east). A significant proportion of the land Northern Growth Corridor is identified for  As an airport it provides an alternative destination to Mangere and therefore spreads demand across the network more efficiently. business activities, partly to off-set the conversion of business land to residential activities around Henderson and New Lynn.  As an economic growth engine it stimulates economic The planning for the area also recognises the importance of State development in an area where the majority of the workforce Highway 18 and the “ring road” role of this piece of infrastructure. leave the city to travel to work each day. It is Waitakere City’s policy that priority will be given to the release c) Auckland Regional Growth Strategy of new urban land that contributes to the economic development The Auckland Regional Growth Strategy: 2050 is a response to of the City. Land for residential activities in the Northern Growth the rapid and unrelenting population growth of Auckland, and the Corridor is unlikely to become available for at least 7 years, unless it pressures this places on the infrastructure and natural resources occurs as part of a mixed use development that supports the City’s of the region. “Urban Village” development philosophy. The City wants to ensure The history of Auckland is one of rapid growth and change and that the social and economic infrastructure (and land to support the Auckland Regional Growth Strategy seeks to set the direction this) is in place before allowing wider urbanisation to occur. This is for the region’s future urban form. It was developed through the to ensure that the suburban sprawl that has characterised the City’s 1990s through a consensus building process with Auckland’s development in the past does not continue in its new urban areas, local authorities and seeks to contain the outward spread of the and that local jobs are created to support its existing residential metropolitan area so as to protect and enhance the values and population. This policy is entirely consistent with the Auckland qualities that make the Auckland Region a successful living and Regional Growth Strategy and Auckland Regional Policy Statement working environment. To achieve this, the strategy proposes and therefore supports the Crown’s initiatives to strengthen the containing the growth of the urban area of the region and promoting Auckland Regional Policy Statement. 18 19

AUCKLAND: A DYNAMIC REGION GROWTH CONCEPT 2050

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WAITAKERE CITY’S NORTHERN GROWTH CORRIDOR f) Fastest Growing Region in New Zealand Collectively 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. ��

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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 One of the major issues this presents is the relationship with travel would be to the north of the proposed Metropolitan Urban Limit demand patterns and the ability to provide employment locally. (SH 18), raising issues of unconstrained growth. It will also see a Currently the majority of the future supply of commercial land is significant population cut-off from the retail, community and service located to the south of the North West region. Job creation is activities on the southern side of SH 18. below labour force supply. If this is to continue, Auckland will face e) Northern and Western Sector Agreement continued pressure on it’s roading network as a large proportion of The Northern and Western Sector Agreement provides further the North West work force commutes through the narrow isthmus detail on how the Regional Growth Strategy is to be implemented. each day to work. 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

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identifies a shortage of business land in Waitakere City, and the � �

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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 While Waitakere City is planning for significant employment  To promote good spatial distribution and a range of employment opportunities at different skill levels areas in it future urban areas, one of the challenges is to create a competitive advantage to attract business to these locations,  To recognise the current role of the Whenuapai base and to keep as well as locations in the wider north west region. The proposed options open for its future use options of rural residential sites, or industrial/commercial The only future use of Whenuapai airbase which supports all these development, do not create competitive advantage to attract agreed principles as deliverable outcomes is to retain Whenuapai businesses to this location. Only the regeneration of Whenuapai Airbase as a functioning commercial airport. 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 20 21

has occurred in the last 20 years, with urban growth expanding consolidation. This strategic direction is fully consistent with the outwards from Henderson, Te Atatu and New Lynn and at the urban Auckland Regional Growth Strategy. 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. k) Waitakere’s 50 Year Development Vision The urban environment of Auckland has changed significantly over Waitakere City Council has indicated a long-term vision for the City the last 20 years and will change significantly over the next 20. that includes: Managing this growth and providing infrastructure in a sustainable  protection of environmental features manner will require hard decisions. If present trends continue to the  promotion of community wellbeing year 2050, Waitakere City’s population will double to approximately 300,000 people.  economic development  innovative solutions to development issues h) Population Waitakere City’s population was assessed at 168,753 at the  provision of public transport systems 2001 census and is projected to increase to 237,100 by the 2021 For the Northern Growth Corridor this means in particular that there Census. A quarter of its population is under the age of fifteen and is an emphasis on balanced development, with an initial focus on a third of its residents are under the age of 20. It is one of the three attracting economic development activity and securing land for the local authorities of the Auckland Region that are collectively known social and economic infrastructure that is necessary to create a as the North Western Sector. The North Western Sector is the balanced urban environment. A significant challenge for the City fastest growing sub-region of the Auckland Region. is how land for economic and social activity is preserved and protected from residential encroachment. i) Low Wage Work Force Almost half the jobs in Waitakere City are in low wage employment l) The Northern Strategic Growth Area categories such as hospitality and manufacturing. Not only does Waitakere City’s Northern Strategic Growth Area is an area of Waitakere City have the lowest level of personal income of all Cities some 3000 hectares currently in mainly rural land uses. It borders in the Auckland Region but also of the eight largest cities in New Rodney District Council to the west and the Upper Waitemata Zealand as well. Around 60 percent of the city’s labour force leave Harbour to the north and east. the City each day for employment. The Auckland Regional Growth Strategy has signalled that certain The cost of transport is as significant barrier to finding employment areas of the Northern Strategic Growth Area are suitable for to those who are unemployed. There is also an economic and social urban development in the future and these areas are the focus cost for time spent travelling to and from employment. of the City’s planning for urban expansion. The Northern Growth Corridor is the area that has been agreed “in principle” for urban j) Waitakere City’s Development Strategy development and is located generally south of the proposed State The Council adopted the international Agenda 21 program in 1993 Highway 18 motorway and west of Don Buck Road. which has significantly influenced its development strategy, and it policies. The Council has worked collectively with the region on the The Northern and Western Sectors Agreement is the Regional development and now the implementation of the Auckland Regional Growth Strategy implementation document that provides a growth Growth Strategy. The Council’s strategy is to encourage the management framework for Rodney, Waitakere and North Shore development of a compact City based on the understanding that City. It was signed in October 2001 and provides a local level continual expansion of the urban boundary does not constitute framework for the implementation of the Auckland Regional Growth sound management of the environment, nor does it produce Strategy. So far detailed planning has been undertaken for parts of cohesive communities. This strategy has begun the process of the Hobsonville Peninsula, the Hobsonville Corridor, and Massey evolution of Waitakere City from a series of dormitory suburbs, to a North/Westgate. The city’s focus in the Northern Growth Corridor City with defined town centres surrounded by suburban and rural is to prioritise land uses that promote economic development. lifestyles. The key factor in this evolutionary process is to grow the m) Metropolitan Urban Limit local economy in order to provide local employment opportunities The current Metropolitan Urban Limit runs along Hobsonville and to provide a balanced financial basis for the City’s development. Road and excludes the Hobsonville Peninsula, Hobsonville The Council developed its strategic direction for the City in the Corridor, Massey North and Redhills areas. Through the Northern mid 1990s. The City’s strategy is to intensify urban development and Western Sectors Agreement, the Auckland Regional Council in and around the three town centres of New Lynn, Henderson has agreed in principle that it could be moved to the new SH18 and Massey North/Westgate, and along major transport corridors alignment to provide for future urban growth over the next 20-30 such as Lincoln Road. The strategy includes a range of related years. However there has been no formal application yet and no programs, including protection of the Waitakere Ranges from determination at this point by Waitakere City Council as to where urban encroachment, and investment in town centres supported the Metropolitan Urban Limit should be located or the staging of by investment in roading and public transport networks to support new urban land releases. It will be a protracted process to move the 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. 8 Transport

a) Impact on North Shore and Rodney Developing 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. 24 25

WHENUAPAI AIRPORT TRANSPORT ROUTES

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b) Traffic Demand Management new airport at Whenuapai. Any reduction in total transport costs The Auckland Regional Land Transport Strategy 2003 identifies over the region is a benefit deriving from Whenuapai operations. Traffic Demand Management as a key project shaping the region. The ART model incorporates all expected changes to the regional This includes land use considerations and the effect these have road system, regional land use, population, etc up to 2021. on the transport network. Traffic Demand Management includes The model itself is run from the year 2011 extrapolated out to a number of measures that are intended to influence travel patterns 2035. Benefits are attributed to the region’s road users based so that existing infrastructure is used more efficiently. It is in this on the value of time and fuel saved from reduced congestion area of changing the transport demand patterns incrementally and shorter journeys. over time that Whenuapai is likely to have the most significant transport benefits. e) The Major Variables Affecting the Results Are:  The Auckland Regional Land Transport Strategy identifies that eight The assumed pattern of flight-related traffic going to and million passengers travel though the Mangere airport annually (it is from Whenuapai from throughout the region understood that this is a 2001 figure and that current throughput is  The assumed rate of growth of air transport and hence flight in the vicinity of 10 million passengers), with an expected increase related traffic to around 18 million people a year by 2010. This equates to an  The percentage share of total regional air traffic that is annual rate of increase of 9.5 % per year over these years. captured by Whenuapai Mangere Airport is a strategic piece of privately owned  The rate of development in the Waitakere Northern Strategic infrastructure. The costs of an increase in passenger throughput Growth Area at the airport on the regional transport infrastructure is borne by the taxpayers of the country and the ratepayers of the region. The Base-case assumptions for the above variables, in each of Improvements to the network feeding the airport are costly and the modeled years from 2011 to 2035, are: difficult due to the geography of the Auckland Isthmus and the  100% of the households and businesses in the Rodney, availability of, and value of, land and existing land uses. While North Shore and Waitakere areas consider using Whenuapai commercial operations at Whenuapai will not provide the complete commercial airport. But only 50% of Auckland City and 20% of answer to this problem, by providing an alternative destination Manukau households and businesses consider using Whenuapai. for airline passengers, and creating employment throughout the  The assumed rate of growth of air transport and hence flight wider north west region, it provides an opportunity to significantly related traffic is 4% per annum, consistent with the regional influence the traffic demand pattern. growth rate of 3.7% from 1995-2002.

c) Public Transport Stimulated  The percentage share of total regional air traffic that is captured A commercial airport at Whenuapai has the potential to stimulate by Whenuapai is 15%. both the supply and demand of public transport services. It is  The rate of development in the Waitakere Northern Strategic conceivable that a ferry service could be established to the Growth Area is as indicated in the Northern and Western Sectors Whenuapai area from Central Auckland. The region is already Agreement of the Regional Growth Strategy for 2021. i.e. there planning multi-million dollar investment in upgrading existing ferry is no accelerated growth outside the proposed Metropolitan infrastructure and new services. In addition the planned State Urban Limit as a result of the airport development. Highway 18 has provision for a dedicated rapid transit system,  and the north western rail line could conceivably be extended The values of time used to calculate benefits to road users are: to Whenuapai (a few kilometres over flat land). – Morning peak $14.40 / hour

d) Benefits to Regional Road Users from Having an Airport – Interpeak $17.85 / hour at Whenaupai – Evening peak $13.75 / hour As explained above, Whenuapai is likely to generate the most  Vehicle operating cost savings are valued at $0.20 per kilometre. 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 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 Auckland An 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. 26 27

9 Partnership

a) Cooperation and Collaboration Is Essential i) New Local Government Powers and Responsibilities Recent 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 Together The 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, urban limits. If it is not continued to be used as an airport it with an estimated 46,000 truck neighbouring local authorities, local iwi and the regional council is represents a significant liability, loads of concrete (or 200 truck movements per day for a year) the key to achieving the outcomes identified by the government. to be disposed of, (comprising the runway), and an estimated b) Crown Decision Will Change Council’s Growth Planning $20-30 million of infrastructure liabilities. Who pays? Waitakere City’s plans for new urban growth have been centred  Waitakere City, in conjunction with it economic development on the creation of a new town centre at Massey North/Westgate. agency, Enterprise Waitakere, commissioned a report on the Those plans include the creation of a mixture of activities closure of the airbase (NZIER Report, see appendices). including commercial, industrial and retail activities as well as That report concluded that there would be an annual loss of residential activities. $230 million with a further $20 million to the Rodney District With the Crown’s decision to vacate Hobsonville airbase, and and North Shore City. now Whenuapai Airport additional options have become available d) Existing Growth Management Framework because of the opportunities to stimulate economic development inherent in this land. The deep water access afforded at Hobsonville Planning for growth in Waitakere City has occurred within the Airbase has resulted in plans for the creation of a marine industrial framework of its own consolidation strategy and eco-city principles, park. Whenuapai creates the opportunity to stimulate economic and within the regional planning framework. Planning for urban development throughout the north west of Auckland, but more expansion is undertaken in a cooperative manner with the Auckland particularly in the new growth areas of the city. Regional Council and the Local Authorities of the region and is controlled though the imposition of Metropolitan Urban Limits Planned comprehensively with the cooperation of central, regional through the Auckland Regional Policy Statement. and local government, the economic, social and environmental benefits will substantially increase, to the benefit of Auckland and Any decisions to expand an urban area ultimately sits with the New Zealand as a whole. Auckland Regional Council. Unless a compelling case is brought to the Auckland Regional Council and Waitakere City Council to shift c) Existing Airport Gives Land Strategic Value the Metropolitan Urban Limit, only the current activity or underlying  If Whenuapai had not been developed as an airport it would just zoned uses will be permitted at Whenuapai within the Council’s be another piece of land located outside Waitakere City’s and Operative District Plan. As this underlying zoning is for Countryside the region’s planned growth area. It would have no advantages to Living, this would probably exclude a number of the Government’s distinguish it from any other area outside of the planned new options from coming to fruition. 28 29

10 Experience

a) Commercial Partnership with Infratil  Tauranga District Council, Tauranga Electricity Consumers Trust In seeking to progress the commercial development of Whenuapai Rotorua Energy Charitable Trust. Airport, Waitakere City Council decided to form a commercial  CentralPower Electricity Consumers Trust, Palmerston North City partnership with an airport owner/developer/operator. Without Council, New Plymouth District Council. such a partner, Council would not have proceeded to support the  commercial redevelopment of Whenuapai. Wellington City Council, Christchurch City Council. Waitakere City Council chose Infratil as its partner to maximise the Of great importance, Infratil is also a company with unimpeachable commercial viability of its case for the civil use of the Airport and to integrity that is regarded as having excellent management and a ensure that it had a partner with the right expertise, resources and highly transparent approach to all its investments. patience.  IFINZ 2003 award Best Corporate Communicator emerging Waitakere City Council is promoting the civil use of Whenuapai leaders. Airport because it is of the view that this is the best ongoing use  Shareholders Association 2003 Best and Fairest award. of the site and the Crown’s existing investment in its development. e) Experience with “Joint-Use” Civil-Military Airports Council’s comfort that its goals can be met (if given the opportunity by Government) is founded on Infratil being the partner with the Infratil has experience managing civil airport operations alongside best prospect of delivering a successful civil airport operation those of the military: within a meaningful period.  At WIAL there is a small RNZAF presence and terminal.

Factors contributing to the decision of Waitakere City Council to  At GPIA the Royal Navy has a search and rescue base that uses partner with Infratil include: three Mk5 Sea King helicopters and employs 75 personnel. The Navy has an agreement with GPIA for priority access to aviation b) Airport Expertise facilities. In addition, the Airport provides a range of aeronautical Infratil is the 66% controlling shareholder of Wellington International services to a wide variety of itinerant military aircraft on both Airport (WIAL) and the controlling shareholder of Glasgow programmed and ad hoc operations. Prestwick International Airport (GPIA).  When Infratil management were in control of Darwin Airport  WIAL is recognised as one of the most efficient airports in the they had direct experience of a Joint Use airport with the Royal world (As identified by Standard & Poor’s, Transport Research Australian Airforce. This airport was managed in accordance Laboratories, and others, including Air New Zealand before the with a comprehensive joint use agreement that governed day Commerce Commission). to operations and the longer term maintenance of common  GPIA is a second tier UK airport focussed on freight and low-cost infrastructure, capital expenditure planning and implementation, passenger airlines. It is experiencing huge growth as a result of master planning and development controls, etc. European aviation deregulation resulting in greater competition, f) Waitakere City Council Experience lower airfares and many more people flying. To date, the experience of Waitakere City Council (and Enterprise  The management team at Infratil have great experience in the Waitakere) has been that Infratil has delivered on its expressions airport field including purchase and management of Perth, of interest. This includes entering into an agreement that gives Darwin, and Alice Springs airports when they were privatised Waitakere City Council ongoing representation on the board of by the Australian Commonwealth. They have investment in, and any company formed to progress the commercial development of board representation on, Airport Group International, then the Whenuapai Airport. Council has also been granted an option that world’s largest airport ownership company, and numerous airport would enable it to acquire a 33% stake in the Airport company investment projects in Europe. and will enable the City to gain a financial benefit from the Airport c) Ownership and Capital Resources investment if it provides a good return. Infratil 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 Integrity In 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: 28 29

11 Defence Needs

a) Operational and Wider Security Needs Whenuapai Airbase in terms of Emergency Management is as The Whenuapai Airport proposal allows for a phased withdrawal a landing and airlift base. Airports can be used to transport in (see Infratil submission) of the airforce whilst the commercial airport emergency equipment, personnel and supplies in case of an is being established. Civil aviation requirements are likely to require emergency. This use is not reliant on retention of the base as a that the perimeter fencing be upgraded for the establishment of an military facility, and could be maintained were Whenuapai converted international commercial airport. This can only benefit the operation into a commercial airbase or a commercial/military shared facility. of the airforce base for as long as the airforce use continues. iv) Risk Management As noted in the Infratil submission Infratil have a great deal of Auckland is New Zealand’s major urban conurbation nearing 1.4 experience in working with joint use airports both in New Zealand million in population. Relying on one airport instead of two is an and overseas. “all eggs in one basket approach”, particularly when the second Keeping Whenuapai as an operational airport preserves the airport already exists. Mangere is low lying, and on a harbour and option for its use in emergencies in both civil and military could within the realms of possibility be affected by an emergency emergencies throughout the Pacific region. event. More importantly it relies on access to the region via SH1 or 20 which could be affected by an emergency event. Retaining b) Civil Defence Issues Whenuapai provides a backup option to Mangere, or a primary i) CDEMG option should Mangere not have the capacity required for normal Waitakere City is part of the Auckland Region Civil Defence and emergency requirements. Whenuapai also provides a facility Emergency Management Group (CDEMG). The Group is close to the northern part of the region if this is where emergency responsible for planning and putting in place and maintaining requirements are most pressing. reduction, readiness, response and recovery measures and c) Emergency Military Uses capability for the Auckland Region. While the purpose of this submission is not to address military In the event of a large-scale emergency, air transport and support policy, retention of Whenuapai as an airport if the military presence from national and international sources could be vital. Whenuapai is withdrawn, allows the Government to maintain a small military currently provides both a military presence to provide support presence close to Auckland, with the ability to use the facility to services, and an airport facility to supplement or replace the main increase operations if ever required. With Auckland being the regional airport at Mangere. largest City this would seem desirable. It would also provide a place ii) Trained Resources for military personnel to land if they were required for Emergency The closure of the Military presence at Whenuapai will remove a Management response duties. 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 Management Operationally, 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 30 31

12 Alternative Options

Waitakere City has assessed the four alternative options to an c) Rural Residential Sites airport listed in the NZDF discussion document. Given the existence of substantial development on the site and thousands of cubic meters of concrete, it is not realistic to consider  Another Public Work and or Urban Development this option for much of the land. It does not address the liability  Industrial/Development Site issues, would not provide any economic benefit, and would not fund  Rural Residential site the necessary work required to remediate the site. Any proposal for this option would need to take these issues into account when  A combination transferring the land out of crown ownership. It would also have a) Public Work and/or Urban Development potential risks to the Council as noted above due to fragmented The Crown may or may not have a public work requirement for all land ownership that would result from the necessary disposal process. 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 d) Combination of the Above significant economic impact. However, such a development would The Airport proposal as outlined in this submission (and detailed be likely to engender strong public debate, and is not likely to in the attached Infratil submission) is the only option that allows require all the land available. a combination of these options to occur while achieving the government’s aims. 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 Site There 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. 30 31

13 Community Views

a) Public Opinion Surveys Two business breakfasts were held, one in Waitakere and one on In December 2003, a poll of the Auckland region was undertaken by the North Shore. These were well attended (84 at Waitakere and 65 TNS, a large professional market research firm (see appendices). on the North Shore) with opinion again strongly supportive.

The TNS study was conducted by telephone, interviewing a total of d) Opposition to Proposal 300 residents in the greater Auckland region. Various grounds are cited for opposition to the proposal that In summary, results showed that there was reasonable awareness Whenuapai Airport be used for commercial operations. of the Whenuapai proposal (61%). North Shore residents were i. Opposition from Mangere Airport, the existing monopolistic significantly more likely to be aware of the proposal (79%). Near to supplier, on the basis that Mangere’s planned second runway will half of all respondents were in favour (strongly or somewhat) of the meet demand for decades to come. proposal (46%) and interestingly, North Shore residents were no more in favour nor more opposed to the suggested developments ii. Opposition from people who have purchased or developed than residents in other areas of Auckland. dwellings under an existing flight path. The main reasons for support of the proposal were the belief that iii. Various other reasons given by the 13% opposed to the concept Auckland was growing rapidly, the area around the existing airport is in the TNS poll, not all of which stand up to logical scrutiny, getting too congested, travel time for residents of the North Shore reflecting a lack of awareness of the detail of the NZDF process and West Auckland is too long and inconvenient, and that it would and the Waitakere City/Infratil proposals. be good economically (employment/development/service & pricing i) Comment on Expressed Opposition competition). The acknowledged benefits of competition also apply to airports. Nearly a third of those interviewed (31%) would not mind whether Why would the owners of Mangere airport be concerned at a or not a commercial airport is developed at Whenuapai. proposal to develop a second commercial airport in the region? Because it gives their airline customers the option of moving to Of those interviewed, 13% were opposed to the proposal (strongly another base if they are able to offer superior prices, facilities or somewhat). and services. These benefits are likely to be reflected in airfares The main reasons for opposing the proposal were concerns of and airfreight charges. Auckland International Airport is currently noise pollution, Auckland not being large enough to support two running a public campaign to advise the public how to cope with the airports, land/resources/money should be going towards housing/ shortage of parking. Airlines are advising international travelers to education/health/other means of public transport, and that North arrive at the airport three hours before their flights so as to cope and Western motorways are already becoming congested. with the congestion. A poll of readers conducted by the Western Leader also showed Virgin Blue, after expressing interest in check-in facilities for strong support for the concept of a commercial airport at proposed Trans-Tasman service, was told by Auckland Airport that Whenuapai. they may have to consider building their own terminal.

b) Iwi Airlines are watching the Whenuapai proposal with great interest, Waitakere City Council has a long-standing relationship with the and are open to operating from there if they can negotiate local iwi, Te Kawerau A Maki. acceptable terms. It is particularly attractive to them that half of the population in the greater Auckland region lives closer to Whenuapai Te Kawerau A Maki are the original inhabitants of the area and that considerable regional airfreight is generated by enterprises (recognized by, among others, the Waitangi tribunal and the Maori in the north west of the region. Land Court). Secondary airports tend to attract more airlines to provide services, The tribe fully supports the proposal to retain Whenuapai for airport because the economics of doing so become more attractive when operations, citing the City’s pressing need for economic growth and there is competition. Population is not the only driver of the need development. The iwi has serious concerns about environmental to create second airports. Topography, traffic congestion, the effects, particularly on the Upper Harbour, should options such as availability of land for an additional airport are all factors. Some urban development be pursued. cities with only one airport find it difficult to create a second airport A formal submission from Te Kawerau A Maki is attached. simply because they do not have sufficient suitable and affordable Waitakere City also engages with urban and iwi Maori through its land available in the right location. With Whenuapai, Auckland is Standing Committee Te Taumamta Runanga. indeed fortunate in this respect. A second commercial airport at Whenuapai will clearly provide c) Business Community meaningful and beneficial competition for Mangere, without Enterprise Waitakere has been consulting extensively with local wastefully replicating the infrastructure necessary to provide that Business networks and individual businesses in Waitakere, North competition. However, it is not envisaged that Whenuapai would Shore and Rodney. Overwhelmingly these support Waitakere’s ever be more than a secondary regional airport, using its natural proposition as evidenced by the submissions appended. advantages to attract several airlines to use it as a base, serving its 32 33

natural catchment area much better than it is served at present, and stimulating local area growth and employment. ii) Residents under Flight Paths Opposition 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 Survey The 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. 32 33

14 Conclusion

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) Recommendation Therefore 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. 34 35

Support Submission of Infratil 34 35

Infratil Chairman’s Letter

Mr Peter Bollmann Director, Property Rationalisation New Zealand Defence Force Defence House Private Bag Wellington

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’Connor Chairman Infratil Limited 36 37

Background / Summary

Waitakere City Council and Infratil are offering to establish civil to the likely minimum requirement of civil aviation at Whenuapai. aviation operations at Whenuapai Airport as defence use declines (NB recognising that Wellington has no airlines based there, no over the next four to five years. Over this period a plan will be significant freight or express parcel operation, no material aircraft developed for the site identifying areas required for aeronautical use maintenance, engine or component overhaul operations, etc. – all of and land available for commercial development, social use, or sale. which could be part of Whenuapai’s future.) The core elements of this proposal are: This scale may be compared against Auckland Airport which has 1. That civil aviation operations at Whenuapai developed by over 1,000 hectares designated aeronautical. Although, of this, only Waitakere City Council and Infratil will be successful. 309 hectares is operational airfield and 321 hectares is held for the second runway. At Christchurch Airport 328 hectares is designated 2. That successful civil aviation operations and the associated airfield. development of the rest of the site represent the best value proposition for the Crown. The Partners are proposing to widely canvas those with an interest in operating at the Airport and to develop schemes for aero/ 3. That Waitakere City Council and Infratil are ideally and uniquely commercial land use to optimise the value of the site. able to partner with New Zealand Defence Force (NZDF)/the Crown in this project. The Viability of Civil Aviation Operations at Whenuapai Preliminary evaluation of the likely costs and revenues associated Waitakere City Council / Infratil Partnership with civil operations at Whenuapai indicates that a viable commercial Waitakere City Council invited Infratil to join in the development business is prospective for an investor willing to invest for long-term of a successful civil operation at Whenuapai Airport. Infratil and returns. This reflects projected capital and operating costs, and Waitakere City Council have entered into an agreement that entails: likely revenue levels, all of which have been based on preliminary  Infratil providing expertise and funding for the development and information. operation of the civil operations. Proving up the commercial proposition will be a priority once NZDF  Both parties having board appointment rights. has decided to progress discussions with the Partners.

 Waitakere City Council having the right to take up a one third The Partners intend to develop Whenuapai Airport to focus on low shareholding in the airport company at any time over the next cost passenger services that would operate on a short haul basis to seven years. other airports in New Zealand, east coast Australia and the Pacific. In this submission Waitakere City Council and Infratil are also jointly Ideally the Airport will attract support from carriers such as referred to as “the Partners”. Freedom, Pacific Blue and Origin Pacific, which will provide “point to point” services. Waitakere City Council/Infratil Proposal to NZDF/the Crown The Partners’ proposal to NZDF/the Crown entails: Passengers will be attracted to utilise the air transport services by their low cost and will not mind the “simple” airport facilities.  The parties working together to enable civil and military operations to coincidentally occur at the Airport. The focus will be on high growth based on low costs/low frills services.  Gradual assumption by the Partners of responsibility for the maintenance, operation and development of the Airport. The civil operations will be complementary, rather than competitive, with those at Auckland Airport, which derives the majority of its  Agreement for the long-term improvement of the Airport and the economic value from long haul services and network carriers, and development and realisation of non-aeronautical land and assets non-aeronautical property development. to optimise value for the Crown. Regulatory & Community Relations Management  Return to the Crown of the site if civil use of the Airport is not successful (and/or implementation of an alternative site use/ Development of civil operations at Whenuapai faces a number of disposal plan if that was preferred by the Crown). regulatory hurdles. Civil Aviation Authority (CAA) will be required to approve the airfield and operations. Consents will be required under Whenuapai Airport Aeronautical Requirements Waitakere City’s District Plan. Whenuapai comprises 311 hectares of which between a third and At Wellington International Airport, Infratil has had considerable a half is likely to be necessary for civil aeronautical operations over experience of both sets of needs. the longer term. The land not required for this purpose would be available for other uses. Wellington is a compact airport in an urban setting. It faces safety, environmental and community relation challenges. Its At Wellington International Airport, aeronautical use (comprising success in each of these areas has been brought about by a aviation and aviation support) occupies some 93 hectares, 85 long-term concerted programme of sympathetic engagement with hectares of which is airfield (of total land of 110 hectares). As its immediate neighbours and assiduous compliance with CAA Wellington is also a short-haul airport this is a reasonable guide requirements. 36 37

These experiences and skills will be a major attribute in the Crown Achievement of Fair Value and Mitigation of Risk development of civil operations at Whenuapai. The Partners contend that their proposal offers the Crown the best prospect of achieving, and gaining benefit from, the highest value The Case for Success use of the site. The Partners’ case for being selected by NZDF to be invited to develop the civil operations at Whenuapai is based on: Further, if the Partners’ proposal to develop successful civil aviation operations at Whenuapai fails, then the site will revert to the Crown  Consistent with global aviation trends, the high probability of for development of whatever alternative use the Crown deems success of the low cost/low frills approach. appropriate at that time.  The catchment of airport users who are likely to support air  The Crown is not being asked to accept any risk in respect of the services operating from Whenuapai. development.  Infratil’s credentials and commitment to the development.  The development of successful civil aviation operations at  Waitakere City Council’s credentials and commitment to the Whenuapai will optimise the site value and deliver the highest development. value return to the Crown.

These factors are in addition to the other social/policy criteria  If the Partners do not bring about successful civil operations in a addressed in the Waitakere City Council proposal. reasonable time, then full control of the site would revert to the Crown for alternative use. 38 39

Waitakere City Council / Infratil Partnership

Waitakere City Council and Infratil are the ideal parties to be chosen Credentials of Waitakere City Council & Infratil by NZDF/the Crown to progress development of civil operations at The credentials of the Partners are set out elsewhere in this Whenuapai. submission. The key benefits the Partners bring include:

Further, they also offer the Crown the best possible prospect in  Waitakere City Council has rights, as the local territorial authority, respect of optimising the use, and hence value, of the Airport. under the Crown’s disposal process and it wishes to exercise these rights in accordance with its policies to progress the City’s Partnership Agreement long-term goals. In particular, these goals include being able to On 17 April 2003 Infratil and Waitakere City Council entered into an stimulate economic activity and develop jobs within the city so agreement to progress the commercial development of Whenuapai that residents will not have to travel long distances to work. Airport as military use declines. Council’s policy goals accord with those of Government. The Partners entered into the agreement following a vote of the  Council is uniquely positioned to determine the optimal social and Waitakere City Councillors. economic use of the site and to progress that use. It so happens Salient features of the agreement are outlined below. A copy of the that the uses favoured by Council will also optimise the Crown’s agreement is available to NZDF. outcome.

 The Partners are to work together on the development on an  Infratil is a world-class airport operator, with a proven record and exclusive basis. ideal skills to achieve the development of successful civil aviation operations at Whenuapai. It has direct international experience  Infratil is to provide expertise and all funding for the development. in the low cost airline sector and in managing ‘joint use’ airport  When development progresses it is expected that an Airport facilities. Its financial resources and credibility are impeccable. Company will be formed with Infratil appointing four directors and Waitakere City Council two.  Infratil has a long track record of unimpeachable corporate behaviour and willingness to stick with projects to deliver long-  At any time over the next seven years Council has the right to term value. It can provide references from a wide variety of take up (and thereafter maintain) a 33% shareholding. The price Council and community groups as well as having established of shares taken up to be set so as to provide Infratil a 10% per good relations in its dealings with Government and its agencies. 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. 38 39

Waitakere City Council / Infratil Proposal

The Partners proposal to NZDF/the Crown for Whenuapai Airport There are a number of ground spaces that could be segregated entails a three-stage process (albeit, the stages will overlap): from military use. The preferred positioning is likely to depend on 1. The production of civil use of the Airport and the gradual the military’s own withdrawal plan. substitution of military use as this winds down. The coordination of incoming civil operations with outgoing military 2. The production of a comprehensive development plan to will require some planning, but should not impinge on the viable determine long-term use of the 311 hectares, whether military/ operation of either party. There will be issues surrounding the civil aviation, commercial development, social, or disposal. Partners’ rights to actually undertake construction on the site, but there is no reason why this should impinge on military capability. 3. Implementation of the comprehensive development plan and realisation of value to the Crown as land and assets not required Transfer of Control from Military to Civil Users by the Airport are brought into alternative productive use. As defence gradually withdraws it is envisaged that the civil The proposal also envisages conditions to the Crown’s commitment operations would expand. to the Partners. The Partners are proposing to progress the The process of expanding civil use would be subject to meeting development of successful civil operations at Whenuapai Airport. commercial and regulatory constraints: If this is not achieved the Crown would have the opportunity to  Preliminary evaluation of Whenuapai’s aeronautical infrastructure resume its assets and dispose of them into alternative use (or has shown that it could cost in the vicinity of $50 million to bring require the Partners to progress some alternative disposal plan). the Airport up to the standard necessary to gain all Civil Aviation Today, the market value of Whenuapai Airport is low as it has no approvals and offer a basic level of facilities to domestic and capacity to operate, or gain commercial benefit from, civil services international jet services. and its alternative uses are of low intensity. The Partners’ goal is to  Before such a sum was spent it would be necessary to gain work with the Airport military users and NZDF/the Crown to build expressions of commitment from airlines to use the Airport. It up a successful civil aviation operation and to use this as the basis would also be necessary to gain, on a forward-looking basis, civil for ancillary commercial development of the surrounding area. aviation and resource consents. Joint Civil-Military Use At some point it is anticipated that military use of the Airport will At present it is intended that military use of the Airport continue until become incidental. At that time it is expected that the Partners will at least 2007. It will be of considerable benefit to both the existing assume control and the military users will become the tenants, ie. a military users and the Partners’ civil operations if the civil operations reversal of roles. The military users may of course depart altogether can start as soon as possible. if they wish.

 The military users will be able to share costs with the incoming Site Use civil operations. Only a part of Whenuapai Airport’s 311 hectares will be required  By initially leasing services and excess capacity from the military for aeronautical (aviation and aviation support) use (whether civil the civil operator will be able to minimise costs at a time when or military). As the parties are developing protocols for joint civil- revenues would also be expected to be low. military use of the Airport, a comprehensive development plan will also be progressed.  From the wider community perspective there would not be the large dislocation of military operations winding down and civil This will entail identification of areas required for aeronautical use operations winding up. (the priority) and the areas available for other applications. Infratil offers experience of “joint-use” airports. The priority needs The likely optimal use of the site will entail a range of applications of the military can be accommodated alongside the commercial and will depend on the Crown’s wider goals. Land would be requirements of the civil operation. available for commercial or social development or sale.

Coordination of Joint Civil-Military Use It 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. 40 41

Optimisation of Crown Value Extraction of Value It is envisaged that the Crown will grant the Partners a long-term The scale of value that may be derived from the site is not known lease over most, or all, of the Airport. at present and it will take several years to prove and extract value. This may be actually entered into once the Partners have agreed to The agreement between the Partners and the Crown will have to take primary responsibility for maintaining, operating and developing allow reasonable time for civil operations at the Airport to become a the Airport. This may occur after an initial period of civil operations success and for this to flow onto the value of non-aeronautical land. and after the comprehensive development plan has been developed, How this increased value would be passed to the Crown will require but some form of agreement will be necessary before Infratil discussions between the interested parties once Government has commits capital for runway repairs, terminal development, etc. chosen to allow implementation of the Partners’ proposal. The lease between the Crown and the Partners will be structured Factors that will impact the value of the non-aeronautical site to ensure the Crown achieves optimal value from non-aeronautical include: assets and that failure of the Partners to achieve their goal of  How successful the civil aviation operations become. The more establishing a successful civil operation at the Airport will result in successful they are, the greater is likely to be the value of the the return of leased assets to the Crown so that alternative uses surrounding site. may be progressed.  The split between aeronautical and non-aeronautical land. The Airport has negligible value without consents, infrastructure Up to 170 hectares could be available for non-aeronautical and customers. It will be the Partners’ role to invest in developing development. successful civil aviation operations. Having achieved this, the  How much of the non-aeronautical land Government is willing to Partners and the Crown will benefit from the increasing value of the see developed for ancillary commercial purposes. Recognising non-aeronautical areas of the site. that some may be designated for recreational, conservation, Indications of how a successful civil airport will flow onto the social, etc. uses. 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. 40 41

Airport / Commercial Development

Whenuapai comprises 311 hectares and the allocation of this land Each of these areas, and how their use is likely to be allocated between airport, commercial and other use will be important in between Airport/Other, is briefly described below: respect of the value derived by the Crown from the non-aeronautical 1. Runway 03/21 and Related Operational Area area. This is the core of the Airport and would form the bulk of the Set out in this section are some preliminary ideas about how aeronautical area. It amounts to approximately 100 hectares. the airport operations may be developed on the site, and the Given the nature of air services being considered for Whenuapai, consequences in respect of residual land that could be developed the immediate objective is likely to be to maximise the use of into commercial use, or designated by Government for social/ the runway consistent with not having to achieve full precision recreational/cultural use. approach standards, meaning operating from a 150 metre rather The development of a comprehensive plan will be an extensive than 300 metre strip, accepting a high minima and, depending on process and how and when it evolves will depend on the terms of the requirements of commercial operators, making progressive the relationship with the Airport’s military users. decisions on whether to retain full approach lighting, reduce to It is likely that the Partners’ development of a scheme for land use shorter configuration per runway 08/26, or delete the lighting will take time and final decisions may only occur when Defence has altogether. ILS capability would preferably be retained, although effectively handed aeronautical control to the Partners. operations could revert to systems equivalent to those used at airports such as Queenstown and Palmerston North. Airport / Commercial Designation Decisions about these factors will be made once the Partners are The intended approach will be iterative and is likely to entail: better informed about the condition of navigational aids and the  In the first instance it is up to the Crown to stipulate ultimate site likely timetable for major runway reconstruction. There has not been usage. This may be “civil airport and commercial”, but it may also an opportunity to undertake a detailed review of the condition of the include some space for recreational use, retention of the existing runway. Its condition is known to be poor and a major reconstruction village, etc. This stipulation may form a definite blueprint, or it will be required over time. may be set out as guidelines to be developed as the Partners, While a timetable for runway reconstruction will be developed in due and Government agencies, develop a site use plan. course, once its condition is better appreciated and likely use better  The Partners will canvas potential users of the Airport and from known, the following are likely to form part of the redevelopment: this will develop a perspective on the likely space/utility needs of 1. Immediate removal of any remnants of the arrestor system. the Airport over the next 10-20 years. 2. Reconfiguration of the western end.  Having identified the likely needs of the Airport, the Partners will then map out “surplus” land. “Surplus” in the sense of 3. Possible partial westward relocation and lowering of Brigham being available for other use. The use for this land will then be Creek Road below the obstacle limitation surfaces removing the developed, again with possible input from Government agencies. requirement for manual intervention from the control tower to restrict traffic movements. Long-term Use of the Airport Land 4. Provision of a 90 metre RESA beyond the runway strip end to Infratil has undertaken preliminary work to scope up likely uses a point immediately adjacent to the road with the 21 localiser of the site. This has entailed identifying likely minimum needs for aerial at the end of the RESA. Creation within the RESA of a aeronautical use and the likely best use of residual space. starter extension with the western end of that starter extension The site has been divided into six sub-areas: approximately 40 metres from the end of the RESA. 1. Runway 03/21 and related operational area. 5. Reconstruction of the eastern portion. Either a partial re-build or 2. Area east of runway 03/21 (golf course and wetlands). short to medium term abandonment of this end for operations on 03, but use as starter extension for operations on 21. 3. Apron and hangar precinct – the future terminal area. 6. Reconstruction of the central portion of the runway is likely, but 4. Runways 08/26 and 12/30. whether this would entail a full 45 metres, or just the centre 30 5. Accommodation and recreation area. metres will only be known after site work. 6. Housing and other land to the south west. 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. 42 43

Over the more medium term the following developments would also 4. Runways 08/26 and 12/30 occur: This area of approximately 65 hectares would be designated for 7. The apron edge taxiway, which acts as a parallel taxiway, is too a mixture of aviation and ancillary commercial use, mainly the close to the runway and therefore does not comply with CAR latter. Depending on demand it may be allocated to aircraft basing, 139.06 for code C and D aircraft. However, initially at least, maintenance, etc. this would be dealt with via operational procedures rather than Runway 08/26 is not likely to be required over the longer term for reconstruction. civil aviation, but in the short term it may be a useful substitute for Longer term, a parallel taxiway would be created based on a 03/21 during that runway’s reconstruction. 103 metre separation between the centrelines of the taxiway It is likely that the area would be progressively brought into ancillary and runway allowing contemporaneous Code D (say military commercial and industrial use, possibly with parts being retained for B757) and Code C operations. general aviation. 8. It is expected that the VORTAC navigational aid would be Precise dimensions of the commercial/aviation areas cannot be moved as its current position is likely to limit long-term estimated at this time. This is an area that would be expected commercial development of the Airport. Over time it is also to deliver value to the Crown at the time it was brought into likely that PAPI would be installed to replace the VASIS. development for activities ancillary to the primary airport use. 9. The operational area would be fenced to CAA standards. Runway 12/30 is already closed and would not be required for How the Airport is to be operated and the plan for investment commercial aviation purposes. The area that extends to the east of in infrastructure will depend on likely airline interest in providing 03/21, currently used for engine run-up, would also not be required services and the condition of existing infrastructure. Developing the for aviation purposes. operating/upgrade plan would be a priority. 5. Accommodation and Recreational Area 2. Area to the East of Runway 03/21 (Golf Course and Wetlands) This area of approximately 40 hectares would be used for a mixture This area would not be directly required for the Airport’s civil of terminal and commercial use. operations. It amounts to approximately 45 hectares and a Land to the east of the entrance road and stream delineated by development or disposal programme could be determined with Kupe Avenue is likely to be allocated to commercial development. NZDF/the Crown. Access to the terminal area would need to be on the existing As this land would be contiguous with the Airport, it would be main road system (Tamatea Avenue, Tainui Crescent and Takitimu important that its long-term use was compatible with the Airport Street). operations. If the land were sold, its use would have to be Vehicle parking for the terminal may initially be on areas of apron, constrained and future owners restricted from participating in any but in the longer term it is likely the recreation field would be action against the Airport activities. converted to asphalt. The wetland area could be retained by the Crown for environmental The topography of the land to the west of the stream means it reasons, or vested in the appropriate authority once it has received may be best suited to community, recreation or housing uses. an appropriate bill of health (it was formerly used as a land fill). Relocation of some base houses is an option. The area could also 3. Apron and Hangar Precinct (The Future Terminal Area) accommodate residual non-airfield NZDF activities after the bulk of Over the medium term this area of approximately 40 hectares would the military operation has shifted to Ohakea. Facilities that are an be required for the terminal and related activities. asset to the community, such as the pool, may be retained for social The current apron and hangars are close to the runway, constraining use over the medium term. 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. 42 43

WHENUAPAI AIRPORT INDICATIVE OVERALL LAYOUT

LEGEND

Possible Surplus Commercial/Aviation

Terminal/Commercial

Military

Approved Motorway

WHENUAPAI AIRPORT REVIEW

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6. Housing and Other Land to the South West The programme for the Crown to extract value will take some Only a small part of this area of approximately 20 hectares is likely considerable time to develop. It will entail Waitakere City Council, to be required by the Airport. The remainder could be disposed of in Infratil and NZDF working together to develop an agreed site use its current use or developed over time for commercial use. plan. Once this is in place the parties will need to develop a plan Any properties sold would need covenants placed on their titles that for the development of, and realisation of value from, the non- note the presence of airport noise and activities and limit the ability aeronautical areas. of future owners to bring actions against the airport. Over the long-term the 311 hectares may end up as: 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 Long-Term Allocation of Airport Land (hectares) needs of the Airport. The remainder of this area could be developed or sold over time. Airfield 100 Civil terminal area 20 Conclusions An important part of the Partners’ proposal to NZDF/the Crown is Military terminal area 20 that Whenuapai Airport offers sufficient space for both a successful Commercial aeronautical 75 civil Airport and a number of other land uses. Other / Surplus 96

Over time, the optimal value of the site will be achieved by allowing Total Airport 311 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. 44 45

Airport Market

The Partners intend to develop civil aviation at Whenuapai Airport In addition to its scale, the nature of civil operations at Whenuapai to suit low-cost/low-frills/low-fare services. There may be limited would differ to those at Mangere. The focus will be on offering a freight operations (likely to be mail and express parcel services), but base for low-cost/low-fare services. A multi-user terminal would the main focus will be on passengers. A development of this nature be created to allow aircraft to come in as domestic and depart as is likely to stimulate additional market growth rather than simply international (and vice versa) with minimal ground time. drawing from existing Auckland airport traffic. Modest airport facilities (cheap and cheerful) would complement the Very preliminary discussions have been held with a number of local nature and style of low-fare airline services. Experience has shown airlines and parties with interest in this area. Feedback has been that the key needs of this sector are: favourable, albeit contingent.  Speedy turnaround times and few delays (given spare airfield The development of the Airport operations will depend on how capacity at Whenuapai this is the most easily delivered need). expressions of interest coalesce into firm commitments to use.  Efficient passenger processing facilities. Significant capital spending on the Airport will only occur once there is certainty of use.  Minimisation of charges and a close linkage of costs to services/ benefits – airport and ground handling costs being a significant Clearly this is a “chicken and egg” issue, but it largely relates to the focus of low cost airline operation. speed with which development will occur.  Large population base within a reasonable connect time (ie.  Slow development may entail a period of regional services from reflecting both the size of the population and access). turbo-prop aircraft demonstrating passenger demand. Achieving this is likely to entail little spending on the airport and Infratil Low-fare Airline Growth expects to be willing to invest in the Airport in anticipation of The intention of the Partners to focus Whenuapai on low-fare turbo-prop services as the value at risk will be relatively modest. airlines is based on awareness that such services are the high growth section of the world aviation market and that they are not  Faster demand and airport growth would entail jet use. For the Partners to invest to accommodate jet services there will need being effectively accommodated at Mangere. to be some certainty that the services will occur. The cost of An irony of Auckland Airport’s recent growth surge from full upgrading the Airport for jet services is likely to be significant and service carriers such as Emirates is that it has not been able to Infratil would want to be certain of some airline interest before accommodate Pacific Blue which has been the highest growth making such a commitment. airline in Australasia since setting up a little over three years ago.

Preliminary Airline Interest Case Studies of Low-cost / Low-fare Airlines Meetings with airline representatives have indicated that Whenuapai 1. Southwest is of interest. In part because Whenuapai offers access to an Southwest invented the low-cost / low-fare airline model in 1971. attractive catchment of potential passengers, in part because of Since then: benefits Whenuapai offers relative to Auckland Airport.  Southwest has become the world’s most valuable airline by A recent Massey University study forecasts an increase in the market capitalisation. Its success belies the famous Warren Auckland area population by 434,800 over the period 2001 to Buffet bon mot “If there had been a capitalist down there [at Kitty 2021. A large part of this population growth will occur north of the Hawk the day the Wright brothers made their first flight] the guy Auckland isthmus. The existing and committed land and harbour should have shot down Wilbur! ... one small step for mankind, transport network for Auckland means that Whenuapai is, and and one huge step backwards for capitalism!” will continue to be, the more accessible airport for a large part of Since listing in 1974 Southwest has out-performed the US share Auckland’s population, up to 520,000 people. In 20 years this may market S&P500 index by 16,000%. be 1,000,000 people.  Southwest has 385 aircraft and 122 on order. Its operations are Whenuapai’s civil operations are not intended to be in the same entirely internal of the USA. 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. 46

2. Ryanair 4. Air New Zealand Express Ryanair initiated a strategy to imitate Southwest in 1985. Since then Air New Zealand introduced pared back services and lower fares on it has grown to be the largest low-cost/low-fare airline in Europe and domestic services in November 2002. The average Air New Zealand has achieved an explosive impact on the routes it flies. fare was reduced 20%. In its first year of operation Air New Zealand Ryanair has proven the price elasticity of air travel. In its evaluation Express carried 14% more passengers and the New Zealand domestic of airline and airports the New Zealand Commerce Commission has passenger air travel market grew in the vicinity of 10%. used elasticity rates of 1.1% to 1.5%, ie. a 10% drop in travel costs Consequences increases travel demand 11% to 15%. As noted in the Waitakere City Council proposal and its supporting The scale of market growth delivered by Ryanair belies these appendices, airports are major sources of economic stimulation. statistics. In addition to its own growth based on the attractions of its Pertinent evidence of this comes from a November 2003 study low fares, Ryanair’s arrival on a route has also stimulated responses undertaken for Scottish Enterprise on the impact of passenger services from competitors that have seen their volumes also grow. at Infratil’s airport at Glasgow Prestwick. Most of the 2 million (47% inbound) passengers who used this airport in the last twelve months The crucial message of Ryanair’s operations is that the market for were carried by Ryanair. 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  Impact on the Scottish economy, £89 million per annum. wealth of the local population.  1,500 to 2,000 (full time) jobs in Scotland, 620 to 720 in Ayrshire.

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��  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 3. Virgin Blue / Pacific Blue Prestwick, the evidence provided by this survey suggests that a While Virgin Blue’s growth benefited from the demise of Ansett and significant proportion of passengers would not be setting foot in regulatory restrictions placed on Qantas’ competitive response, Scotland or Ayrshire at all.” its low fare/low frill service has resulted in it carrying over 8 million passengers after three years.

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�� 46 Aerial View of Whenuapai Airport

Aerial View of Wellington International Airport 48 49

Regulatory & Community Relations

To convert, even if gradually, Whenuapai Airport to civil use will An initially favoured model is for Whenuapai to be managed require a number of regulatory approvals. to comply with CAA requirements in a manner that is akin to The nature of the approvals, and the likely difficulty in gaining them, Palmerston North or Hamilton (as opposed to Mangere or will determine the type of air services using the Airport and their Christchurch). frequency. Auckland Airport, as an example, invests in infrastructure to deliver At present (Airways Corporation data 2001) the Airport has the highest quality airfield for the largest aircraft. Whenuapai’s 22,000 movements a year. It also has events such as night-time customers will be operating smaller aircraft on the low-cost airline engine testing. Initial analysis of the noise envelope of start up model. This increases Whenuapai’s options, at least in the short civil operations is that they will fit comfortably within the envelope term as volumes are building. utilised by the military. Whenuapai need not offer a precision approach with its As an indication of scale it can be noted that the ten-year target consequential costs. However, accepting a less demanding for Whenuapai will be about 2 million domestic and international standard means accepting some limitations on operations so that passenger movements a year. compliance is achieved through procedural methods rather than capital investments. The number of aircraft movements that may be associated with this level of passenger throughput can be inferred from Wellington Infratil/Wellington International Airport Experience: Safety International Airport. In the twelve months to 31 October 2003, Wellington provides a model for optimising the cost/benefit of CAA Wellington accommodated 3,700,000 domestic and 440,000 compliance that is directly comparable to Whenuapai. Wellington international passengers. Halving the number of aircraft movements International Airport occupies only 110 hectares of inner city land, gives an idea of likely Whenuapai throughput: bordered by sea at either end, hills to the north and west and housing close in to both sides. International Jet 2,447 These physical restrictions mean that in some areas it is simply Domestic jet 12,407 impossible to deliver compliance through capital investment and Wellington International Airport has had to develop operating Domestic prop 36,517 procedures to achieve compliance. For instance, the taxiway at Wellington is only 101 metres from the runway (standards require On an average day there would be 20 jet take-offs and 50 turbo- 168 metres), and the strip width is 150 metres (precision approach prop take-offs. This is about three times the current level of activity, standards require 300 metres). In these instances the airport has however the nature of the activity would be very different to that worked proactively with CAA and airlines to place constraints experienced now. Some local residents will notice a quieter airport on the way business is conducted to achieve acceptable safety and some will notice greater noise. observance. The exact consenting process for civil operations at Whenuapai This attitude and approach will be necessary at Whenuapai has yet to be determined. Residents will have an opportunity to especially during the civil operation start up period. The experience present their views and to have these views taken into account by and expertise of Wellington International Airport in these areas is a regulatory authority in determining the airport sound envelope and unique. hence times and frequency of use. Infratil/Wellington International Airport Experience: Community In reaching a decision on such matters, a regulator will take into Relations & Environmental account a wide range of environmental, social and economic In its 2003 annual report, Infratil notes: As well as being a major factors. source of economic activity for the region and having approximately Civil Aviation Standards 1,000 people employed at the Airport, WIAL also works with There has been little investment in the aviation infrastructure at local interest groups to ensure it makes a positive impact on the Whenuapai for a number of years. Further, certain of the standards immediate area. Leonie Gill, local ward city councillor who lives very used to lay out the airport, such as taxiway – runway separation, are close to the runway stated, “Over recent years WIAL has made a below that which is required for some levels of civilian operations. 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 Bringing the airport up to Civil Aviation standards will require enthusiasts hope to build in Lyall Bay to the west of the Airport, and investment and will face a number of challenges. There are however its work to rejuvenate the area with a shopping mall are helping to a range of options as to how the redevelopment is progressed: lift the civic and economic environment.”  The type of civil operation will influence the type of compliance In addition to the requirements of CAA, Whenuapai must also required. comply with RMA and district plan rules. The nature of these means  Compliance may be delivered through upgrading infrastructure that fostering good relations with the immediate community is and/or changing operating procedures. commercially essential, especially for an Airport such as Whenuapai which is in a reasonably urban setting. 48 49

When Wellington International Airport was initially corporatised it Noise inherited poor community relations based on years of indifference It is apparent from media coverage and face-to-face feedback that on the airport’s part. Initially those in the immediate neighbourhood there is concern about noise from people living in Herald Island, opposed the airport in all manner of areas. Greenhithe and Paremoremo. To change this, Wellington International Airport implemented a Some people have indicated that they are not happy with the noise programme of regular community consultation meetings and began, associated with aircraft movements, especially given the target of where practicable, to reflect community concerns in its operations. approximately doubling movements from current levels over the As the airport’s financial circumstances improved it has also been next 10 years. able to invest in its appearance and to provide financial and other In some instances it will not be possible to reconcile the residents support to community initiatives. to the civil use of Whenuapai Airport, but the Partners’ objective in The commissioning of the new terminal resulted in a significant the first instance will be to ensure that these residents have a better improvement in community attitude towards Wellington International appreciation of the scale of the issue. A great deal of the concern Airport. A 2002 survey found that 99% of Wellingtonians felt that expressed thus far is unwarranted given the actual level of noise the new terminal was better, or much better, than the old one. that will eventuate, even if the Airport is very successful. In recent years Wellington International Airport has also provided  It is take-offs rather than landings that generate disruptive noise. support for the development of a new surf reef in Lyall Bay and the 80% of take-offs will be to the west over very sparsely populated south coast aquarium. Perhaps more importantly it has started to areas. function as the regional gateway by hosting events and displays that  On the 20% of days when take-offs are going east (potentially 70 relate to events occurring within its region. aircraft a day) it should be noted that at Greenhithe the aircraft The Partners bring ideal credentials and expertise to the task of will be at 1,000 feet which is about the height of an aircraft as building good relations with the immediate community. Infratil’s, care it passes Roseneath on its way from Wellington Airport. A jet of its dealings at Wellington, Waitakere City Council’s, care of its aircraft at this point on take-off makes about 80dBA if you are usual roles of dealing with, and on behalf of, its community. 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). Whenuapai Departure Flight Path

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Fair Value & Risk Mitigation

The Waitakere City Council/Infratil proposal to NZDF/the Crown As has been identified in the Waitakere City Council submission, contains three key elements: Council’s compliance with the Auckland Regional Growth Strategy, The Auckland Regional Policy Statement and its own district  A successful civil operation as the optimal use of Whenuapai Airport in the context of Government’s wider policy goals. plan goals make it unlikely that this site would be zoned for high density residential use even over the medium term. In this context,  If the Partners cannot accomplish the goal of developing a zoning for ancillary commercial/ industrial use would only be successful civil airport then the site will revert to the Crown for consistent with the planning framework if undertaken as a part the alternative use. development of successful civil aviation operations. This means that  The successful civil airport will enhance the value of non-airport the alternative use value should be taken from “life-style” blocks, land and will result in high density, high value use of that land. In ie. in the vicinity of $20 to $60 per m2, minus the restitution cost turn this will result in the derivation by the Crown of the highest and minus the cost of land that is consumed by the development, ie. value from the site. as roadways, etc.

The Crown will benefit from the site being put to its highest and Risk Mitigation best value use and will carry negligible risk. The Partners’ proposition for the development of civil aviation at Optimal Value Whenuapai entails: To illustrate how the value of surrounding land is likely to be  The Partners will establish an Airport Company to lease capacity enhanced by the development of a successful civil airport, recent at Whenuapai from NZDF. market evidence from Mangere and the Whenuapai area is noted  During an initial period, perhaps of four years ( ie. until when below. military use is expected to end), the Partners will work out the  Recent sales of bare, but developed, commercial and industrial land use plan for development of the Airport and the surrounding land near Auckland Airport have been at $120 – $150 per site. It is likely that this would occur in conjunction with NZDF m2. This developed land value reflects an estimated $35 2m and/or other Government agencies. development cost. It also includes a developer’s margin of  During this initial period, the Partners would commit to undertake 2 approximately $50 m . investment to allow the long-term civil operation of the Airport. These figures come from TTP’s recently concluded sale of  Also during this period the Partners and the Crown would agree their development property, Airpark 1. Airpark 2 is now being milestones that would designate whether the Airport was on 2 marketed. TTP paid approximately $30/m for the 87 hectares track for successfully civil development, eg. by achieving certain 2 that make up the two Airparks. It spent approximately $35/m stipulated passenger numbers within a 10-year period. 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  The Partners and the Crown will have an agreement to share offer at $140 – $150 m2. the benefits of development of the non-aeronautical areas of the Airport.  Recent sales of life-style blocks in the vicinity of Whenuapai have been at between $20 and $60 per m2. The wide range apparently  If the agreed commercial and passenger milestones are not reflecting buyers’ estimates as to the relevant land’s likely future achieved, the Crown would have the right to terminate the use. If the zoning is unlikely to change in future the value is at the Partners’ rights and to progress such other disposal plans that low end of the value range. If the land is considered likely to be may then be preferred. 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. 54 55

Infratil Experience and Credentials

Infratil was chosen by Waitakere City Council as its partner in the  The Airport has weathered the failure of Ansett and has recently development of Whenuapai Airport because it provides exactly the concluded price resetting with its major airline customers, including capabilities and expertise necessary. reaching agreement with its major airline, Air New Zealand.

 Infratil is a New Zealand owned and domiciled public company  A major commercial development has commenced. with a track record of successful infrastructure investment, Wellington International Airport is a complex and difficult business management and development. It has sufficient capital resources to optimise. It is situated on a small site in a highly built area. Over to finance the development of civil operations at Whenuapai. It is 70% of aeronautical income is derived from a single airline, which listed and has a strong reputation for clear and comprehensive is attempting to merge its local activities with the airport’s second communication with the market. most important airline customer. Over the last five years the  Infratil owns 66% of Wellington and 100% of Glasgow Prestwick business focus has been to achieve highly efficient operations and international airports. Two investments that have been highly to maximise revenues from its primarily domestic passenger base. successful and are managed to “world’s best” standards. Comparing Wellington’s operational and financial performance with  Infratil has direct international experience in providing airport the international survey compiled by the UK Transport Research facilities to the low cost sector through its operation of Glasgow Laboratory shows the airport to be managed to world best Prestwick International Airport. standards.

 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 Roles � �� Infratil’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. The above have been achieved in partnership with Wellington City Since then: Council the 34% shareholder. Infratil and the City have maintained excellent relations notwithstanding that commercial and civil goals  The $120 million terminal area has been commissioned. are not always coincident.  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. 56

Infratil Credentials: Glasgow Prestwick International Airport Infratil’s management have had experience at each stage. (100% Infratil-owned)  At Wellington there is a RNZAF terminal and occasional military Glasgow Prestwick International Airport has several features movements. directly relevant to Whenuapai:  At Glasgow Prestwick there is a permanent air naval  Glasgow Prestwick is Glasgow’s second airport (Glasgow’s establishment that provides sea surveillance and rescue services population is approximately 650,000 and, unlike Auckland’s, is and has priority over civil operations. In addition, the airport essentially static). Its business focus is on low-cost passenger frequently hosts itinerant military aircraft movements. services (mainly from Ryanair) and B747 freighters. The Airport was facing decommissioning until these two activities were developed.  Darwin Airport is a joint use airport with the Royal Australian Air Force. Both day to day operational arrangements and longer Infratil’s initial investment cost reflected the Airport’s marginal business term maintenance of common infrastructure, capital expenditure, case at that time. The current value reflects the huge growth in master planning and development, etc. are covered by a passenger throughput (up over 100%) since January 2001. comprehensive joint use agreement.  The Airport has a material military presence, both from itinerant use and a permanent navel sea rescue operation base. Infratil Credentials: Co-investment with Local Authority & Community Interests  The commercial goal at Glasgow Prestwick is to maintain Infratil was established at a time when Government policy changed aeronautical services/facilities to suit low-cost carriers, while from comprehensive Government (local and central) ownership increasing passenger services/facilities to build per-passenger value. of infrastructure to the encouragement of private capital and Infratil Credentials: Management Experience management disciplines. Most of Infratil’s New Zealand investments Infratil’s manager, HRL Morrison & Co Limited (“Morrison & Co”), have subsequently occurred alongside or in partnership with has undertaken numerous airport transactions and has been community interests. responsible for the acquisition, transition and ongoing management (in addition to Wellington and Glasgow Prestwick) of Perth TrustPower: Rotorua Electricity Charitable Trust, Tauranga District International Airport (5 million passenger movements per annum, Council, Tauranga Energy Community Trust. A$643 million acquisition cost) and the Australian Northern Territory airports at Darwin (1 million passengers), Alice Springs and Tennant CentralPower Palmerston North City Council, CentralPower Creek Electricity Community Trust. (0.8 million passengers) at a cost of A$110 million. Powerco New Plymouth District Council.

In all of these instances the acquisitions involved all aspects of IO Fund Christchurch City Council’s Orion Limited. arranging financing, valuing the business, closing the purchase, Port of Tauranga Bay of Plenty Regional Council. ongoing financing of the relevant airport and its day to day and strategic management. Wellington Airport Wellington City Council In addition to these successful transactions, Infratil’s management Whenuapai Airport Waitakere City Council 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. Infratil Credentials: Investment Strategy Infratil’s investment strategy entails:  Airports that have undeveloped infrastructure, usually because their prior use was military.  Investing in utilities and infrastructure where there is a prospect of above average risk-adjusted returns. Usually related to a “step  Partnerships with community interests. change” in value and/or a willingness to take a long-term view.  Airports where airline interest is being driven by the huge growth  Investing for the long term. of low-cost carriers such as Ryanair, which wish to escape the congestion they are creating at existing airports and are willing to  Investing where Infratil has expertise and can add value to align with low-cost airports. management via control or influence. The very long-term focus and provision of a strong expertise base Infratil Credentials: Joint Civil/Military Airports to the fields where it invests make Infratil a unique infrastructure At Whenuapai the relationship with the military users of the investor in New Zealand. Airport will clearly change over the next five years. Initially it is contemplated that civil operations will be a minor part of the Airport Infratil Management activities, but these will build up and the civil/military roles will be Infratil is managed under contract by Morrison & Co. Morrison & Co reversed. 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 58

Te Kawerau a Maki Chairman’s Letter

Minister of Defence NZ Defence Forces Defence House Molesworth St Wellington 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 Taua Chairman