20 Apr 2012

Casino papers note PM's role in 2009

11:46 am on 20 April 2012

Labour leader David Shearer says that the controversial tender process for Auckland's proposed new convention centre was a one-horse race from the start because of perceived political intervention by the Prime Minister.

He says the public will oppose the proposal to build a convention centre being linked to Sky City gaining approval to operate more gaming machines in its casino.

Official papers released by Labour on Thursday show John Key told officials in 2009 to stop work on the development of an Auckland Convention Centre, and to wait for a Sky City proposal - details the party interprets as Mr Key's "fingerprints" on the deal.


Mr Shearer says Mr Key says he did not intervene, but he did.

"John Key stopped that business-case preparation being done, went on and talked to Sky City about changing the law ... then the tender process was taken up and lo-and-behold, Sky City ended up winning the contract," he says.

Papers from the Ministry of Economic Development show officials briefed Mr Key on a feasibility study for an international convention centre in August 2009.

Soon after Mr Key directed officials to defer their work, pending a proposal from Sky City.

Mr Key has admitted discussing the convention centre and gambling legislation at a Sky City board dinner a few months later.

Sky City later won the tender, and there has been speculation that there will be a change to gambling legislation to allow it to operate more gaming machines in its casino.

Mr Shearer is calling on Prime Minister John Key to - in his words - come clean about the perception a secret deal was done behind the backs of taxpayers.

Greater transparency sought

Mr Key says that as Tourism Minister he approached a number of parties about building a centre, but all except SkyCity wanted a government contribution.

That initial approach to SkyCity was the limit of his involvement, he says, and the tender process was handled by the Ministry of Economic Development in the usual manner.

But Mr Shearer told Radio New Zealand's Morning Report programme on Thursday the deal is not in the interests of New Zealanders and he does not believe Mr Key has been totally transparent about his dealings with SkyCity.

"He offered them to change our gambling act in order that SkyCity could have 500 more pokie machine. I think that that sounds like he was interfering in the deal.

"What I want to know is exactly what the situation is here, and I think we should be far more transparent than we are at the moment."

Mr Key has faced many questions about his involvement in a deal to build the centre, under the terms of which SkyCity's casino is likely to be allowed to operate more gaming machines.

In further explanation on Thursday, he indicated that SkyCity presented the possibility of a change to gaming laws after he asked them to come up with a proposal for building a convention centre.

Mr Key says when he told them to present a proposal that would not include government money, he also told them all options were open, and they subsequently proposed the trade-off of relaxing the gaming laws.

Rival contender says bidding was fair

A former spokesperson for an Auckland Council-owned venue, The Edge - which lost out to Sky City on the tender to build a new convention centre - says the bidding process was fair.

Paul Brewer, who worked for The Edge at the time its bid was put in two years ago, says it was a very robust process, and he understands why the Sky City's "cost-neutral" proposal was chosen.

But Mr Shearer says he supports a Green Party call for the tender process to be reopened.

Greens co-leader Metiria Turei says those who tendered were not on a level playing-field.

"There's just so much murkiness around this whole deal, including John Key's involvement now," she says, "that the only reasonable action is to can it and allow for a open process where it's very clear to the public and the tenderers what's on the table."

One bidder which that lost out to Sky City was infrastructure investment company, Infratil, and of the people involved in that bid, Steven Proctor, says the Government's tender process was too quick and lacked detail.

Mr Proctor says that, given the chance, it would re-submit a bid.

Iwi willing to re-bid against SkyCity

Auckland hapu Ngati Whatua O Orakei, says it also bid to build the convention centre, but was aware from the outset that the Government had been talking directly to Sky City.

The chief executive, Tiwana Tibble, says it would also re-submit its offer should the tender process be reopened.

"We knew that SkyCity had been talking with the Crown prior to the tender process," Mr Tibble says. "Subsequently they won the tender process anyway.

"But the fact is none of us could come up with a financial mechanism that didn't involve taxpayers' money."