24 Jan 2014

Christchurch assets sale mooted

10:16 pm on 24 January 2014

The Christchurch City Council is reviewing its assets and has acknowledged that selling some is one option to help pay for its share to rebuild the earthquake-hit city.

An aerial view of the Christchurch central business district showing demolished sites. Taken March 2013.

An aerial view of the Christchurch central business district showing demolished sites. Taken March 2013. Photo: PHOTO NZ

The council has nearly reached its borrowing limit and says it has to keep all options open to help pay for the $40 billion rebuild following damaging earthquakes.

Its assets combined are worth more than $1 billion and include Christchurch Airport, Lyttelton Port and lines company Orion.

Chair of the finance committee Raf Manji said the council could not borrow any more money and needed to get a good handle on how its assets were operating.

Lyttelton Harbour.

Lyttelton Harbour. Photo: PHOTO NZ

Mr Manji said the council did not yet know what its final rebuilding costs and insurance payout would be and needed to prepare in case there was a shortfall.

"Ultimately you can realise capital either through increased dividends coming from the individual organisation, or you can decide those assets are best sold because either you can get a good price or they no longer have a strategic fit within the council."

He said a review by financial advisory firm KordaMentha, due in March, would first help find what investments could be tweaked to make more money. Then, he said, potentially selling part or all of some assets would be considered.

Mr Manji said the council would probably begin discussing possible action with the public in June.

The Canterbury Employers Chamber of Commerce says it is relieved the council is reviewing its assets.

Chief executive Peter Townsend said strategic assets that are monopolies - such as the airport and Lyttelton Port - shouldn't be sold, but the council doesn't necessarily need all its land.

"The council are the second largest property owner in New Zealand next to the Government, they don't need to own all that land, in my opinion. There are also some council-controlled companies that they could look at selling down shares in or selling altogether. But I don't have the information myself to make that analysis."

However the council's housing committee chair, Glenn Livingstone, said land is extremely valuable for creating affordable rentals.