Context
Council had received a revised statement of intent (SOI) from QAC to reflect the changes brought by Covid.
Council controls QAC through the company’s SOI. QAC gets to write the SOI, which sets out a three-year plan of the company’s objectives, nature and scope of its activities, some performance targets and how these are measured, plus some governance and accounting practices. QAC is obliged to deliver its SOI to Council each year. But if Council doesn’t agree with the SOI it receives, then Council can direct QAC to amend it.
Council’s prerogative to direct changes is limited mostly to QAC’s objectives and the nature and scope of its activities. But as these cut to the core of the company’s purpose, Council’s right to direct changes gives it control over QAC.
Sadly, this simple process appears poorly understood by Council in its guidance and advice to councillors. Even Mayor Boult, with his extensive, highly-remunerated experience as chair of Christchurch Airport’s board of directors, his six years as its CEO and in his current role as mayor, has misled councillors on the process at a meeting where he sought to pressure them to accept an SOI most disagreed with [full council meeting, June 27, 2019].
Along with Wānaka Stakeholders Group, Protect Queenstown and Kelvin Heights Community Association, FlightPlan2050 has sent numerous submissions and letters seeking to ensure the SOI process follows the correct legal procedure. This is necessary as a muddled process makes it difficult to influence or challenge outcomes.
QLDC full council meeting
October 29, 2020
Good afternoon, I am John Hilhorst representing FlightPlan2050
They say that Rome wasn’t built in a day, and in that regard, I’d like to acknowledge the work that has been done to produce this statement of intent.
In particular, I applaud the section on governance. But even here there are serious shortcomings.
- For example, it doesn’t make clear that the supermajority shareholding of Council gives it complete control over QAC’s objectives and the nature and scope of its activities.
- It also states QAC is committed to “retaining and growing shareholder value and paying dividends”. The need to make profit can be a useful discipline to ensure efficiency, but the words “growing shareholder value” are code that direct QAC to independently drive its commercial growth.
It is particularly pernicious that this is in the governance section of the report. These are not governance issues. They are objectives, and are entirely the prerogative of Council. - And this Governance section fails to acknowledge the strategic alliance agreement with Auckland International Airport. Does this secret agreement undermine Council’s control, as was presented recently in court? That would certainly be relevant to governance.
I’m pleased to see that the key objectives are laid out more clearly.
But the extensive tables of performance targets are simply a schedule of tasks and activities. They are neither measures nor targets. These won’t help Council to assess the performance of QAC.
It is deeply troubling that the SOI still does not reflect the key concerns expressed by our community, both here and in Wānaka. For example:
- It remains demand driven. While Council has previously rejected this notion, it remains a key objective of QAC, though couched in different language and I quote: “Ensure connectivity to reflect underlying demand”.
- It also retains the “dual airport model” as a key objective. The recent court hearing understood this to mean two airports operating jet scheduled services, which is directly against overwhelming submissions from the Wānaka community.
- And there is no commitment to always remain within the current Queenstown air noise boundaries.
In court, we heard legal counsel for both QAC and QLDC robustly tell the judge that this Council retained full and complete control over QAC through its control over the objectives written into the SOI. After two years of consultation, feedback and campaigning, our community has yet to see our Council exercise its control.
QAC has submitted this modified statement of intent and it is therefore now the active SOI.
If I were a Councillor, I would not agree to it. And at next month’s meeting I’d want an agenda motion that specified the manner in which it should be modified.
Thank you.