Christchurch City Council begins consultation on future of key assets

Marking the fourth anniversary of its major earthquake sequence (4th September), Christchurch City Council has begun a public consultation on the future of its commercial assets.

The consultation, on the Council's future ownership of the Canterbury Development Corporation, Christchurch & Canterbury Tourism and venue management organisation VBase, follows a consultancy report that suggested that the financial reasons for the Council owning the majority of its commercial assets are weak and that there is considerable scope for partial sale where the Council retains control.

Part of a milestone report on the Council's options for managing the financial challenges and maximising the opportunities arising from the earthquakes, the report says that given the Council’s difficult financial situation, and that its core business is to provide services rather than own assets for financial returns, it needs to assess its future asset ownership. 

The report from Cameron Partners suggests that proceeds from the sale or partial sale of assets could help meet funding requirements.

Overall, the Cameron Partners report says the Council may need to find an additional $783 million to $883 million by 2019 with the total amount of extra funding required depending on issues such as the planning of anchor projects, spending on infrastructure repairs, and the level of insurance payments.

Options Cameron Partners proposed for closing the funding gap include increasing rates, borrowing more, maximising insurance payments, and freeing up capital from its commercial assets. 

Mayor Lianne Dalziel commissioned the Cameron Partners report and the earlier KordaMentha report as part of an “opening the books” exercise to clarify the Council’s true financial position.

She says the latest report shows that, despite the tough choices ahead, the Council has a strong balance sheet.

Mayor Dalziel recently stated “we have gross assets worth $8.3 billion, with $2.6 billion of that owned by our commercial arm, Christchurch City Holdings Ltd. But we also have reduced revenues as a result of the earthquakes, as well as unsustainably high debt levels. We can’t borrow any more.

“This means we must look at all available options to solve the potential shortfall in funding. We need to come up with a carefully considered and robust financial strategy that protects the future economic and social health of Christchurch.”

The Mayor says it is clear as well as other options, such as reducing operational spending and government assistance, releasing capital is the only way the Council can address uncertainty around its finances.

For more information go to www.ccc.govt.nz

Click here to view a full copy of the report is available on the Council's website.

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16th June 2014 - VBASE OPENS CHRISTCHURCH’S NEWEST VENUE