KEY POINTS:
Auckland Mayor Dick Hubbard says his $500 million estimate of the trade generated by his trip to Hamburg was based on guesswork and "vibes".
The mayor and two council delegates travelled business class to Hamburg last October to discuss forging a "strategic alliance".
The delegation of Mr Hubbard, council member John Hinchcliff and the city's manager of international affairs, Caroline Lassiter, also flew to Busan in Korea to celebrate 10 years of a sister city relationship.
The whole trip cost up to $30,000 and was paid for by Auckland City ratepayers. The council spends about $120,000 a year on programmes with its five sister and two friendship cities.
Mr Hubbard said the cost of the trip included three $7500 return business-class tickets to Hamburg on Air New Zealand and Lufthansa, and three $600 economy flights from Osaka to Busan and back.
"I would say the whole trip cost $30,000 tops."
He told the Herald on Tuesday that trade links with Hamburg could be worth up to $500 million.
But he conceded yesterday that was "obviously an arbitrary figure". He had added it up in his head after talking to various people including investors in Auckland and Hamburg.
"It's guesswork. It might be $400 million, it might be $300 million. But I'm standing by my statement there could be up to $500 million worth of benefit. You can't expect to be more accurate than that at this stage.
"You go around and talk to people, you pick up the vibes, the degree of potential interest and you make judgment calls on what you think the potential could be."
He said there were no official estimates or projections.
"This is gut feel. It won't happen overnight. Even if the figure was $200 million, it totally justifies a six-day trip and the $30,000 investment."
He said he had one evening free in Hamburg, not one day as reported yesterday. They flew business class because they had a lot of meetings.
"I wanted to arrive in reasonable shape."
Citizens and Ratepayers Now councillor and former Auckland City finance boss Doug Armstrong said it was not satisfactory the mayor had calculated the figure himself.
"When we are justifying overseas trips on the basis of some sort of trade opportunity, we need to be quite careful that we have got some basis to make a statement of a certain figure. I think he needs to be a bit more careful before he bandies around figures to justify trips and things like that."
He said the delegation should have flown economy class given the nature of the trip. If they wanted to fly business class they should pay for it themselves.
Tim Hazledine, an economics professor at Auckland University, said it would be difficult to quantify how much trade links between Hamburg and Auckland would be worth because trade was measured country to country, not city to city.
Hubbard on Hamburg
Dear Sir
I take strong exception to the incorrect statements and inferences in your front-page article yesterday on my business trip to Hamburg last year.
The errors of fact are:
1. There is no evidence that Auckland City had become embroiled in another junket row before your article was published.
2. We did not travel to Hamburg on a fact-finding mission. The trip was to negotiate a strategic alliance with Hamburg city officials.
3. We only had three days in Hamburg, not four as stated. We did not have a day off.
4. It was not solely a business class trip. Short-leg trips between Osaka and Busan (two hours) were economy class.
5. The Auckland-Hamburg airfare did not cost $9919.00 before taxes. Our cost was 25 per cent less than that.
Aside from these regrettable errors of fact, I would also point out -
1. The trip was no junket. There was no down time. It was packed with successful meetings and I was back at my desk in Auckland within two hours of touchdown in Auckland.
2. I was required to visit Busan as part of our sister-city obligations. There was only a minor marginal cost in visiting Hamburg as well. It is incorrect to attribute the total cost of this visit to Hamburg.
3. The description of Hamburg as a sexy new sister with a photo of its red light district is misleading, gratuitous and insulting to our German colleagues.
Hamburg is primarily and proudly the number one trading city in Europe and this strategic alliance is a coup and of huge economic significance to Auckland. This alliance is part of the programme of economic transformation of Auckland that I have been championing. I consider the successful negotiation of this alliance one of the significant successes of my mayoralty.
Dick Hubbard
Mayor of Auckland City
