Airport plan may save ratepayers $1m

By CHRIS DANIELS

A plan by Manukau City to put its $190.5 million stake in Auckland International Airport into a council-controlled company may save ratepayers $1 million a year in finance costs.

The idea, to put all the council's shares into a new company known as a Council Controlled Organisation, is part of the city's annual plan, adopted by the council last week.

At the heart of the plan is a ruling from Inland Revenue on the tax status of the new organisation, specifically whether it can take advantage of tax credits attached to dividends from Auckland International Airport.

Asked if the plan would place any restriction on the future ownership of the shares, the council said "definitely not".

In the proposal put in the latest annual plan, the council says: "Council currently contemplates remaining, directly or indirectly, a long-term holder of the AIAL shares."

From December this year the Auckland City Council can sell its 12.7 per cent stake. Costly projects, such as the eastern highway plan, may make a sale of the shares attractive.