KEY POINTS:
Prime Minister Helen Clark strove yesterday - against a plunging Auckland Airport share price - to dispel fear of Government interference in an overseas bid for the strategic asset.
She insisted that any Government decision to approve or block a sale of more than 50 per cent of the airport to Dubai Aerospace Enterprise would be made under strict criteria for assessing foreign investments in sensitive land holdings.
Her assurance, at her post-Cabinet news briefing, followed remarks by Trade Minister Phil Goff at a party-political meeting on Sunday that the Government supported the majority view of Aucklanders who wanted their airport shares kept in public ownership.
He was at pains yesterday to explain that his remarks referred to the 22.8 per cent stake in the airport held by Auckland and Manukau cities and were not intended to pre-empt the Government's statutory role in assessing applications for overseas investment.
But his comments had an immediate chilling effect on the utility's share price.
It tumbled more than 6 per cent from $3.29c to $3.08c before rallying to $3.13c by last night - representing a net loss of more than $195 million.
Dubai executives have left New Zealand and could not be reached for comment but a representative assured the Herald last night that they were "not going to walk away" from the airport.
"They are in it for the long term," she said.
But airport company chairman John Maasland, who has welcomed the bid as offering the New Zealand business extra aviation and tourism development experience, indicated frustration at Mr Goff's remarks.
Helen Clark acknowledged a fortnight ago public opposition to the privatisation of such assets and said on Newstalk ZB yesterday morning that she agreed with what her minister told the City Vision meeting.
"What Mr Goff said ... and I agree with what he said, is this is a huge issue for local elections because two of our councils, Auckland City and Manukau City, have significant minority stakes in Auckland International Airport and anyone who is going to stand up and say they'll sell that stake, I suspect, is not going to find a lot of favour with voters.
Yesterday afternoon, however, the Prime Minister was keen to distinguish between local political considerations and the Government's statutory duty to assess overseas investment applications according to strict criteria - including whether they are likely to benefit New Zealand.
In the case of "sensitive" land-holdings such as Auckland Airport, that was a determination to be made by Associate Finance Minister Trevor Mallard and Land Information Minister David Parker alone, she said.
"They have the discretion as to how much weight they put on any particular criterion and they are empowered to put conditions on any consent that they grant," she said.
"Mr Mallard and Mr Parker are the relevant ministers - they are not subject to cabinet responsibility or collective responsibility on this, they make those decisions in their own right."
She also said that any views which other ministers might wish to express about a particular proposal had to be done out of earshot of Mr Mallard and Mr Parker, in case their decision became subject to legal challenge.
National's finance spokesman, Bill English, said Mr Goff's comments had complicated what was a serious issue for consideration by Aucklanders and that he should left it to the statutory process.
"This is a strategic asset - there is a process to follow and it should be followed," he said.
Auckland City Mayor Dick Hubbard refrained from joining such criticism, saying he expected the airport's share price to remain volatile between now and when shareholders are asked to vote on the takeover bid in November, a month after the local body elections.
He said he accepted strong local opposition to a full sale of his city's 12.75 per cent stake, but wondered if the public would consider an option of "passing go and collecting $120 million" by reducing that to 10.1 per cent.
That would retain the strategic value of the stake, as a full takeover of the airport must gain approval from 90 per cent of shareholders compared with 75 per cent support needed for a majority purchase such as mooted by Dubai.
