Secret details on marina bids given to Cabinet committee

By BERNARD ORSMAN

Some of Auckland's most powerful businesspeople provided crucial commercial information to help a secret Cabinet committee stop Westhaven Marina falling into foreign hands.

Former National Party minister and Auckland City Mayor John Banks fed the information to the committee of five Cabinet ministers, set up to put in a last-minute bid without going through the normal Cabinet process.

A source told the Herald last night that businesspeople, some of whom paid up to $250,000 for a mooring at Westhaven and were determined to keep it in public hands, rallied to provide information about the bids of other parties.

"We knew within the last million where it was going to end," the source said.

The Government's successful bid of $52 million for Westhaven Marina and still-to-be-confirmed bid of $2 million for Hobson West Marina was believed to have just topped the next highest bid.

Under the deal, the Government will sell the two marinas back to the council for $46 million, subject to a special consultative process.

Associate Finance Minister Trevor Mallard last night said it was essential to maintain absolute secrecy about the Government's bid in case it pushed up the price.

Ministers and the few Treasury officials brought into the loop all signed confidentiality agreements.

Mr Mallard said the matter came up in the Cabinet about five weeks ago when concerns were raised about the marina coastal land falling into private hands and being turned into apartments.

A week later, a working group of ministers - Mr Mallard, Prime Minister Helen Clark, Finance Minister Michael Cullen, Local Government Minister Chris Carter and Economic Development Minister Jim Anderton - was formed with power to act.

The Minister for Auckland Issues, Judith Tizard, a minister outside the Cabinet, was not part of the group but knew what was going on.

Helen Clark and Mr Mallard learned from Mr Banks that the council bid was going to be $10 million light.

"We came to the conclusion at the end we just had to buy it on the market," Mr Mallard said.

Ideas were bounced around with Auckland City and it was decided that if the Government bid was successful, it would sell on the assets to the council for $46 million with taxpayers making up the shortfall.

The bid was put in within hours of them closing on March 31.

Mr Banks said he started to get worried three months ago about who might be bidding.

He said about a month ago he told Judith Tizard the council was likely to lose Westhaven. A week or so later he told Helen Clark and other ministers the council was facing defeat.

"They came up with a number of scenarios they wanted to keep secret and they came back to me with this proposition (for the council to buy the assets). I said that suits us fine. I believe that this is the kind of money that will be successful.

"They were working their contacts. I was working my contacts and we stayed close to each other," Mr Banks said.

Asked how he knew what level of bid would be successful, Mr Banks said: "That is one of the things that no one will ever get to know."

He said at all stages through the sale process, Ports of Auckland handled the matter with complete integrity.

Westhaven deal

* The Government pays Ports of Auckland $54 million for Westhaven and Hobson West marinas.

* Auckland City Council buys the marinas for $46 million.

* Taxpayers wear the difference - $8 million.

Asset buybacks

The Clark Government has spent millions buying back privatised assets and stopping the sell-off of others since 1999. Here are some examples:

* $50 million on the country's rail network and Wellington Railway Station.

* $81m for Auckland's rail corridors.

* $1 billion to buy 82 per cent slice of Air New Zealand.

* $158 million to buy and upgrade pensioner housing in Auckland City.

* $11.8 million for South Island High Country Birchwood and Poplars Stations.

* $3.5 million Coromandel's Waikawau Bay.