Dodgy Council sells assets to pay for their dodgy socialist dam

If the business case for the Ruataniwha dam in the Hawkes Bay wasn’t bad enough, then the council’s decision to cash up assets in a firesale to fund the dam is just irresponsible.

They were putting it about last week that they had found an investor…it turns out that the investor is the council themselves with the proceeds from selling housing to ACC.

Leasehold land cashflows sold by Hawke’s Bay Regional Council to ACC will fund the Ruataniwha Dam if it goes ahead.

The trade was confirmed by council chairman Fenton Wilson, who said money from the $37 million sale of the council’s income stream would be reinvested into the dam if its certain conditions were met.

“It will be reinvested into Ruataniwha, should it meet its conditions precedent,” Mr Wilson confirmed.

This was supported by comments made by Hawke’s Bay Regional Investment Company’s (HBRIC) chief executive Andrew Newman.

“It [council] has sold the cash-flows for Napier leasehold land for 50 years and it has the cash in the bank,” he said.

Napier MP Stuart Nash labelled the trade a “fire sale”.

“They undersold it by $100 million,” he said.   

“They sold the income but kept the management so they provide management services to the leaseholders for quite a long time to come.”

Mr Wilson said because it was governed under an act of parliament, the land could not be sold to anyone. If it were to sell the only people who could buy it were the residents.

“So it wasn’t a sale or tradeable commodity or anything like, far from it,” he said.

“In fact it has been an integral part of the council’s portfolio for years and years.

People pay a rent on it, a lease rental which is determined every 21 years I think, but a means of releasing some of the capital of it was to sell the cashflows to ACC.

“So basically they have given us some money up front but the cashflows trickle into their coffers over the next number of years.

“So we have sold the cashflow.”

When a business sells their cashflow it is usually the beginning of the end of that business.

Sure the council has received a large cash component up front, but they have poured that cash into the tainted pot of dodgy cash already blown on a flawed dam proposal. At the same time they have hamstrung future cashflows from their asset base.

This is imply irresponsible.

It is doubly irresponsible when the council’s plan has no possibility of being met in the timeframes promised. Their deadlines keep sliding as they try to jimmy the law in their favour. So far they have lost at every trip to the court room, and are likely to keep losing. Meanwhile the ratepayers lose again because of inept and irresponsible councillors.

 

– HB Today


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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.

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