Wellington airport stake in the air

The possible sale of Wellington City Council's stake in its airport to Infratil has been floated by the city's deputy mayor, Alick Shaw.

The airport is 66 per cent owned by listed infrastructure investor Infratil. Shaw said last week the lack of dividends from the airport company meant the council should look at selling its stake.

"I want ratepayers to understands that their rates are 2.5 per cent to 3 per cent higher than they should be. That's how important this lack of a dividend is."

He also wanted ratepayers to start understanding what impact there would be on reducing council debt.

Shaw said he had no problem with the way the airport was being run; in fact, Infratil's strategic aim for the company was the same as the council's. That was another reason for the council to consider selling, since there was little problem in the way it was being developed.

Infratil executive Tim Brown said the company had been talking to the council for some time, "scoping out" alternatives for its investment, one of which could be a full sale.

There was, however, "a lot of water still to go under the bridge".

One possibility is taking up its stake in the form of convertible notes that would give a stable annual payout.

Brown said Infratil would be interested in moving to full ownership of the airport.

The National Government's decision to sell its 66 per cent stake in the airport company to Infratil in 1998 prompted its then coalition partner, New Zealand First, to leave the Cabinet.

Shaw said the company's finance and dividend policy was structured in the interests of Infratil, not the council.

"We are not unhappy with the airport's management - it's a great little airport. One can only be impressed by the increase in the revenues and the value of that asset that has been achieved over the last six years or so."

But he said the council needed to earn revenue from its assets, rather than force ratepayers to fund them.