KEY POINTS:
Auckland International Airport is a goose laying golden eggs for Manukau and the city should not sell its 10.05 per cent stake, says mayor Sir Barry Curtis.
Sir Barry said yesterday that he had been implacably opposed to selling his council's airport shares since 1987 and nothing had changed his mind.
"The airport, I believe personally, is a regional strategic asset. It ought to belong in the ownership of New Zealanders and in no circumstances should a controlling interest be sold to a foreign company or a foreign authority."
Middle Eastern company Dubai Aerospace Enterprises has bid $2.6 billion for a controlling stake in the airport.
However, it and other potential purchasers are likely to need the shares of either the Auckland or Manukau city councils or their consent to assume control of the airport.
Sir Barry said he had strong financial reasons for wanting Manukau to retain its "family silver". While other local councils had sold their shares for between $1.80 and $2.20, Manukau retained shares that the Dubai offer valued at $3.80 apiece.
Those shares had proven to be a multimillion-dollar-earning investment for Manukau and should continue to do so, Sir Barry said.
"Since 1998, when the company was listed, Manukau City Council has obtained $108 million in dividends, special dividends and capital repayment. It has been a magnificent investment for the people of Manukau.
"Auckland International Airport is not just an airport, it's almost a land development company with an airport attached, because it earns more from its development activities than it does from airport landing dues ... It has the potential to become the largest employment centre in New Zealand before long."
Auckland Airport owns almost 1200ha zoned for airport use and an additional 194ha besides.
Most of its land can be used for business activity, plus it also has plans to begin building a second runway by 2010.
Sir Barry said that was a significant and strategic land holding which would be vital for the future success of Manukau City.
The income that could be derived from it would finance the building of long-term infrastructure for both the airport and Manukau, and would ultimately be of value for the whole country, he said.
"Everywhere I go, and I am at functions every hour of the day almost ... people say to me, 'Mr Mayor, don't you dare sell those airport shares'," Sir Barry said.
"I think the public at large are aware that they don't want to see another Tranz Rail situation, they don't want to see another Telecom. They want to see infrastructure created by New Zealanders kept under the wing of New Zealanders."
One of the selling points of the Dubai bid is the company's close ties to Emirates, the world's eighth largest airline.
With Sheikh Ahmed bin Saeed al Maktoum as the chairman of both companies, hopes are harboured that a successful bid could advance Emirates' plans to make Auckland a secondary hub for flights en route to the west coast of the United States.
Sir Barry said he believed Auckland could secure its position as a strategic destination without the need for foreign ownership of the city's airport, and that investment to fund the airport's ambitious expansion plans could be found locally.
"There is no reason why the Auckland International Airport couldn't do exactly the same thing with the expertise it has, the shareholding that it has at the moment," Sir Barry said.
"I am sure that the Auckland International Airport has the capability of accessing funding.
"It is well known by merchant bankers and those involved in the sharemarket that the Auckland International Airport shareholding is very much a blue chip."
Manukau has already had discussions with two investors about its airport shares: the Canadian Pension Plan and one as-yet-unnamed party.
Sir Barry said there might be other investors "hovering about" and he would be very surprised if the Dubai proposal took flight.
However, his personal position was that a majority shareholding in the airport should not be taken by a foreign company or a foreign interest.
