Orion cChristchurchc Cityh Holdingsl Christchurch Airport Christchurch City Holdings Limited is a wholly-owned subsidiary of Christchurch City Council. Lyttelton Port Company Enable Services City Care Red Bus Development Christchurch annual EcoCentral report 2016 C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 6 A N N U A L R E P O R T 2016 snapshot $1.2 $113.9 6,000 people work on the billion million Christchurch airport the capital and the dividend campus dividend payments CCHL paid to The largest employment site CCHL has made Christchurch City in the South Island. to the Council Council since 1995 for the 2016 year. Allowing major investments in community assets, while reducing the impact on rates. over % 16 5.6 2 million improvement million New Zealanders in crane rates at Red Bus fleet kms serviced by City Care Lyttelton Port during the year 2016 and beyond The CCHL group has grown significantly in value over the years, and the Council is in the position of owning a valuable portfolio of trading assets. We will work proactively with the Council in implementing its capital release programme over the next few years. eight the number of subsidiary companies 195,000 that make up CCHL the number of Orion, Christchurch Airport, Lyttelton Port Company, homes & businesses Enable Services, City Care, to which Orion Red Bus, Development Christchurch and EcoCentral. distributes power 25,817 the number of business, school and 8,086 home broadband tonnes users which were recovered for resale connected to Enable’s by EcoCentral fibre network the rebuild The CCHL group continues to play a vital role in the rebuild of Christchurch and Canterbury following the series of earthquakes that struck the region in 2010 and 2011. CCHL remains ready to assist its 100% shareholder Christchurch City Council as it addresses the multitude of challenges in rebuilding Christchurch. C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 6 A N N U A L R E P O R T Contents 2 The CCHL Group 3 About CCHL 4 The CCHL Group subsidiaries 9 Chairman’s Report 14 Financial Overview 16 Group position and results 17 Corporate Governance Statement 19 Board of Directors 20 Subsidiary and associated companies: 20 Orion New Zealand Ltd 22 Christchurch International Airport Ltd 24 Lyttelton Port Company Ltd 1 25 Enable Services Ltd 26 City Care Ltd 30 Red Bus Ltd 32 EcoCentral Ltd 34 Development Christchurch Ltd 36 Monitored entities: 36 Canterbury Development Corporation CCHL Financial Statements 38 97 Statutory Information Report of the Auditor-General 99 102 10 year Summary CCHL Directory and Group contacts 103 Photo courtesy www.rsphotos.co.nz C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 6 A N N U A L R E P O R T THE CCHL Group 75% 100% Christchurch Lyttelton Port International Airport Ltd Company Ltd % % 89.3 ▲ ▲ 100 Orion Enable New Zealand Ltd Services Ltd 100% ▲ ▲ Christchurch City Holdings Ltd Enable Networks Ltd Connetics Ltd 100% Associate INFRASTRUCTURE cChristchurchc Cityh Holdingsl is the commercial and investment arm of % % 100 ▲ 100 ▲ 2 City Care Ltd Development Christchurch Ltd ▲ ▲ CONTRACTING 100% 100% Red Bus Ltd EcoCentral Ltd URBAN DEVELOPMENT URBAN ▲ MONITORING Canterbury Development ROLE Corporation C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 6 A N N U A L R E P O R T ABOUT CCHL Christchurch City Holdings Ltd (CCHL) is the commercial and investment arm of Christchurch City Council (the Council). The company is responsible for managing the Council’s investment in eight fully or partly-owned trading companies – Orion New Zealand Ltd, Christchurch International Airport Ltd, Lyttelton Port Company Ltd, Enable Services Ltd, City Care Ltd, Red Bus Ltd, EcoCentral Ltd and Development Christchurch Ltd. CCHL also monitors the Canterbury Development Corporation on behalf of the Council. CCHL’s key purpose is to invest in and Financial contribution Independent governance of promote the establishment of key Christchurch City Council’s decision in trading companies infrastructure, and this now extends 1993 to retain its key infrastructural One reason for such a strong growth to assisting the Council in the rebuild assets through the establishment and return rate is the independent and redevelopment of Christchurch of CCHL has created a successful and commercial approach taken by following the Canterbury earthquakes, public ownership model. The model the boards and management of the and to working with the Council has enabled CCHL to make over trading companies. to implement its capital release $1.2 billion of capital and dividend CCHL places a great deal of emphasis programme as outlined in its Long payments to the Council since on ensuring the group has first class Term Plan. Currently, this involves the 1995, allowing major investments in governance processes in place. release of up to $600m of capital from community assets, while reducing Through a structured, independent CCHL over the next three years. the impact on rates from such process, CCHL recommends director investments. appointments to subsidiary companies Over the same period, the asset value and monitors those companies on of CCHL through its trading companies behalf of the Council. Further detail 3 has grown from some $400m to regarding the company’s corporate CCHL’s key $3.4bn. Total group equity has risen governance polices is set out on pages from $261m in 1995 to over $1.8bn 17 and 18. purpose is to today (of which $1.6bn is attributable Accountability to the Council to Christchurch City Council as the invest in and 100% shareholder of CCHL). CCHL is accountable to the Council through a number of mechanisms, CCHL’s ordinary dividend to the promote the including: Council for the 2017 year is forecast at establishment of $40.6m, plus the return of any capital • Approval of CCHL’s annual release funds, potentially amounting Statement of Intent; key infrastructure. to $110m. • Council appointment of CCHL directors (four councillors and four external); • Confirmation of director appointments to subsidiary companies • Quarterly reporting to the Council; and • Publication of six monthly and annual reports. C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 6 A N N U A L R E P O R T THE CCHL Group subsidiaries Orion staff are on-hand in all Spitfire Square has 13 of 17 sites 89.3% weather conditions. 75% already leased. Orion New Zealand Ltd Christchurch International Airport Ltd 4 Orion owns and operates the electricity distribution Christchurch Airport is the Gateway to the South Island, the network that provides power to around 195,000 homes and busiest and most strategic southern air connection to the businesses. world's trade and tourism markets. It welcomed more than six million passengers in the past year. Orion aims to provide a safe, resilient, reliable and cost effective electricity distribution network. As one of the largest The airport is a major driver of the South Island regional electricity distributors in New Zealand, Orion’s network economy, with some 6000 personnel working on the airport covers remote rural areas, regional towns and the city of campus making it the largest site of employment in the Christchurch. South Island. Its network traverses 8,000 square kilometres between the It is one of the partners in the “South” initiative, which sees Waimakariri and Rakaia rivers and from the Canterbury all 15 regional tourism organisations working collegially to coast to Arthur’s Pass. Electricity retailers pay Orion for promote the South Island. the network delivery service and include this in their retail Christchurch Airport is consistently rated by an independent charges to homes and businesses. international quarterly travellers’ survey as the best airport in Around 180 employees work directly for Orion, and most Australia and New Zealand. days a further 250 contractors work on the network. All of these people are critical to Orion’s business as they plan, engineer, operate and control the network, manage finances and contracts, and give customers the best service they can. Orion owns Connetics – an electrical contracting service provider to utility network operators, local authorities, developers and commercial/industrial customers. C H R I S T C H U R C H C I T Y H O L D I N G S L I M I T E D I 2 0 1 6 A N N U A L R E P O R T Deploying fibre broadband 100% LPC’s new Pilot Launch. 100% in Christchurch’s CBD. Lyttelton Port Company Ltd Enable Services Ltd 5 Lyttelton Port of Christchurch (LPC) is the South Island’s Enable Services Limited and its subsidiary Enable Networks largest Port and Container Terminal, managing 80% of Limited (Enable Group) are building and connecting local the area’s container trade imports and more than half its homes and businesses to a world-class fibre network as part exports. Over 360,000 TEUs (20-foot equivalent units) of of the Government’s ultra-fast broadband (UFB) initiative.