Eden Park guardians wary of rising debt

The guardians of Eden Park are concerned about the level of debt being racked up to complete the park's upgrade for the Rugby World Cup.

Auckland ratepayers are underwriting the final $40 million towards the $256 million upgrade - and pressure is on the guardians to avoid a ratepayer bailout.

John Waller, who chairs the Eden Park Trust Board and the BNZ, yesterday acknowledged the board was taking on more debt than it would like, and this would constrain what it could do in the way of improvements after the cup.

He said a nine-year business plan for the park contained assumptions and risks, but was confident it was prudent and contained robust projections.

The financial figures in the business plan have not been made public, but it is understood the park is budgeting to make a small profit after the cup and reach comfortable profit levels in subsequent years.

The board is budgeting to finance a $6.5 million loan from the Auckland City Council, an outstanding bank loan from the construction of the ASB North Stand and the $40 million loan to complete the current upgrade.

However, it is understood the board will have difficulty meeting depreciation costs to maintain the assets of the park.

Auckland City Council officers have warned the business plan may not work, and poses a significant risk to Auckland ratepayers.

"This risk is not insignificant in the short term," senior financial officers wrote in a report.

"There is a risk that Eden Park's new business model may not work, leading to a default on its debt and the requirement that council pay."

Officers said banks were unlikely to have the confidence to lend money to the trust, and without the guarantee, Eden Park might not be ready for the cup.

Auckland City Mayor John Banks - who earlier promised not to put a cent of ratepayers' money into the project - voted with councillors in May to underwrite the $40 million shortfall for the $256 million re-development after the Government said its $190 million contribution was final.

A contribution of $10 million from the New Zealand Rugby Union, $10 million from the Auckland Regional Council and $6 million from the ASB Community Trust completes the funding package.

Mr Waller said the biggest challenge for the board was generating sufficient income from four sources - events at the park, sponsorship, grants and functions. How many people attended events and functions at the park were crucial.

The board also had to assess the costs and/or benefits arising from the new 22,000-seat South Stand, and how to pay down its debts.

"We are doing everything we can to mitigate those risks and make sure we have an outstanding stadium."