Editorial: Shoddy dealing spoils marina sale

Year after year international surveys have applauded the integrity of this country's corporate culture. Whatever the drawbacks of doing business here - a high corporate tax rate, for example - overseas investors could be confident of a climate devoid of corruption or, as events this week disclose, lesser shenanigans. That, however, is not what foreign bidders for the Westhaven Marina must be thinking right now. They are the losers in a sale that became a sham. Worse still, those who connived to ensure the Government's $52 million bid was successful are revelling in the success of their skulduggery.

It seems clear that the marina was destined for overseas ownership until the Government was alerted to the situation. Quickly a working group of ministers fashioned an 11th-hour bid. The Government was able to trump an overseas offer because it knew precisely what that was. "We knew within the last million where it was going to end," a source boasted to the Herald.

Apparently, some of Auckland's most powerful businesspeople saw nothing wrong with providing information on other parties' bids because they did not want Westhaven to fall into foreign hands. Never mind that such a tender is meant to be confidential - and that the size of bids should never be revealed at any stage of, or after, the process. The leaking of such information represents, on the surface at least, a clear breach of commercial confidence.

Auckland Mayor John Banks has been at pains to assert that Ports of Auckland, the seller of the marina, handled proceedings with complete integrity. But, whatever the source of the leaks, the company cannot escape scrutiny. As a stock exchange-listed company it has a responsibility to ensure that asset sales are handled with the highest degree of propriety.

Yet from the outset it surprised many in the investment world by employing a real estate company, not a merchant bank, to handle Westhaven. And just as the outcome reflects badly on the ports company, so it tars a stock exchange trying hard to shake off a wild west image.

The Government was drawn into the sale process because bids from both the Auckland City Council and a consortium consisting of yacht clubs and marina users were not up to the mark. Clearly it was determined that Westhaven would not fall to a foreign buyer. That, in itself, is laudable. When the waterfront of the country's biggest city is at stake, sovereignty becomes an issue.

But the Government's motivation was not utterly pristine. It would not have acted so urgently merely to meet Aucklanders' concerns about a foreign investor blotting a popular ambling and angling spot with high-rise apartments. Rather, its focus would have been the political problems arising from a prime piece of foreshore being sold to overseas interests. The significance of such a sale would not have been lost on Maori.

Equally questionable were the Government's tactics. Most of the purchase price for the marina will be laid off on Auckland City ratepayers, who will stump up $46 million for Westhaven and the nearby Hobson West marina. That is not the ideal outcome, even if the city council makes a small profit from running the marinas.

It would have been preferable for the consortium of yacht clubs and marina users to have won the bidding and to have assumed the operating risk. The Government could have heightened that prospect by acting as a guarantor for the consortium. Alternatively, a joint bid by the council and the consortium would have had a greater chance of success, and reduced ratepayers' commitment.

The fact that Westhaven remains in New Zealand hands is pleasing. But nothing else about the sale provides cause for celebration. Worst of all, this country's reputation for business straight-shooting has been tarnished. No longer will foreigners regard investing here as plain sailing.