More precisely, how will the ownership of and investment in (or divestment of) strategic and public infrastructure assets in Hawke’s Bay be controlled and managed in the future?

That’s the question raised by the Regional Council’s proposal to form a “Holding Company” to own and manage approximately (initially) $123 million of assets, like the Port of Napier and its proposed water harvesting (i.e., irrigation) scheme in Central Hawke’s Bay, as well as other investments. The HBRC would retain another $158 million in assets in its direct ownership.

HBRC maintains that the Holding Company has been publicly vetted for over a year, beginning with consultation last year on the Regional Council’s ten-year plan (LTCCP). That’s a rather disingenuous claim, seeing that: 1) the “Holding Company” received six paragraphs of mention (two actually referred cryptically to a “governance” or “investment structure”) in a 200-page document; and 2) documents detailing the actual structure, charter, powers, governance mechanisms etc of the entity were not made public until scarcely a week ago, after the submission window had closed on this year’s draft Annual Plan. Not that the Annual Plan disclosed anything substantial either. It contained an uninformative one-page mention that HBRC was contemplating moving the Port to such an entity, if it decided to create such an entity … WOW, that’s a lot of meat to chew over!

To try to repair the process damage from a lack of informed consultation, and avoid charges of pre-determination, the Regional Council has hustled up a pair of public briefings next Monday the 31st, at 12:15pm in the Havelock North Community Centre and at 5:15pm in the Regional Council Chamber in Napier. If you attend either of those meetings, you will be treated to an informative Powerpoint presentation on the proposal.

Meantime, you can take a closer look at the Holding Company and the issues it poses by reviewing these two attached documents: 1) the staff briefing memo prepared for the Council’s first serious public discussion of the matter last Wednesday the 19th; and 2) the Holding Company Statement of Intent, released only today, which provides more detail on what the Holding Company would own, how it would operate, and how it would be held accountable.

After you’ve digested all this, you have two options for making your views known. You can speak to the issue if you are already scheduled to make an oral submission to the Regional Council on its Annual Plan in June (dare them to rule you out of order!); and/or you can simply contact the Councillor(s) of  your choice and lobby them mercilessly before June 30, when the Council expects to decide the matter.

Why is all this important?

The Regional Council holds a major investment portfolio, dominated today by its ownership of the Port of Napier, with plans to both expand that portfolio and potentially reallocate investments into projects that “strategically benefit” the region. Today, a significant chunk of the revenue generated by its investments is used by the Regional Council to pay for its activities, subsidizing the expenditures that would otherwise be paid directly by ratepayers.

As the HBRC begins to think about using this wealth — ratepayer wealth — in more deliberate ways to drive various regional initiatives, like the (potential) water harvesting scheme, the issues of who is making the decisions, on what basis, for what purposes, with what transparency and accountability, become rather important.

The Holding Company might indeed be a very effective mechanism for achieving widely-shared goals in the community in a fiscally advantageous, commercially well-informed and prudent manner.

Or, from the point of view of skeptics, it could shelter critical decisions from public scrutiny and accountability, and even be a precursor to the divestment (or privatisation) of assets that many in the community believe should be held in public — not private — hands.

This is an important discussion over fundamental strategic, governance and financial investment issues that the public should understand and engage in robustly. Arguably it’s more important than next year’s Council budget … for which we have been given 150 pages of documentation!

Too bad the Regional Council has preferred to sneak it into our letterboxes — like the circular within the circular within the circular — perhaps too eager to get some runs on the board late in its term.

Tom Belford

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3 Comments

  1. What a load of verbal crap from the “Holding Co.” The worm needs to start turning, local & central govt. are relying on the typical silence from the majority. Shee iiit kiwis wake up, get involved, whose agenda do you want to wake up to??

  2. Why the stealth?

    Perhaps the main purpose for creating the holding company (HBRIC) is preparation for selling Regional assets. And as the rate payers have yet to be told that asset disposal is on the agenda, Council can't bring itself to be transparent.

    To be fair the Draft Statement does mention, " … part sale of shares in Port of Napier," and "selling .. equity investments," which potentially means all the assets on the HBRIC schedule.

    But the problem is public knowledge has not yet caught up with what the politicians and the bureaucrats know; that Local Authorities have been instructed to prepare for privatisation of Council controlled assets.

    At the April conference on Local Government Asset Management, where Rodney Hide was guest speaker, participants were told. "Water will be the first area of local government which will move towards privatisation but what about the rest of local government controlled functions? What will the impacts be on asset management if more functions become commercialised in the future?"

    By forming the Holding Company, HBRC are preparing the ground, and all Regional Councillors should tell their constituents – now – their opinion on asset sales.

  3. Well you can have mine Mark. I am totally against any sale of assets currently held by the Regional Council and always have been. (The first Region Council, of which I was a member, was required by the then Labour Govenment's establishing legslation to consider after public consultation the sale of port shares. It was rejected 13-1, membership then being 14.) The Port is the fundimental asset owned by the people of Hawkes Bay. It has been since 1875 and that is the way it is going tomstay as far as I'm concerned.

    Tom's heading to this piece – "Who will own the Port and other stuff" – is likely, deliberately or otherwise, to prejudice this proposal. This proposal has pros and cans, but as an act of stealth to sell public assets it is not, or at least I have detected no indication whatsoever that it is.

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