Million-dollar windfall for councils

Auckland City and Manukau ratepayers are set to receive a windfall of up to $67 million from their shareholdings in Auckland Airport to spend on capital projects such as buying waterfront property.

A bulging balance sheet means the airport company has more money than it needs and has decided to return between $100 million and $300 million to shareholders. A final decision is expected before the end of the financial year in June, with payouts before the end of the year.

The company said building new terminal facilities and runway improvements could be paid out of retained cash flows and increased debt. Higher debt levels could easily be sustained.

The payout will be worth between $12.8 million and $38.4 million to Auckland City Council and between $9.6 million and $28.8 million for Manukau City Council.

Auckland City Mayor Dick Hubbard and Manukau Mayor Sir Barry Curtis last night said they would recommend to their councils that the money be spent on capital works and not used for day-to-day spending.

That would exclude money being used to cushion rate rises, which are forecast to rise this year by 9.7 per cent in Auckland City and 5.9 per cent in Manukau.

Mr Hubbard, who was relaxed about selling airport shares at last year's local body elections, said the shares were seen as part of the family silver and any windfall should be used for capital projects that had a long-term benefit, such as buying waterfront land.

Sir Barry said the money would replace the need to raise debt for the council's capital works programme, saving ratepayers debt-servicing costs.

He said the shares were a "licence to print money", with the council receiving $78 million in dividends and capital returns since corporatisation of the airport. The council's shares are worth $255 million.

"That decimates the debt of Manukau City Council. I have always believed the Auckland Airport shares ought to be treasured."

* North Shore opponents of an airport at Whenuapai are vowing to fight their city council's decision to support commercial flights at the Air Force base. They are also disappointed Mayor George Wood used his casting vote on Wednesday night to allow the council to investigate the airport proposal.