It's exactly a year since the Auckland City Council sold half its shares in Auckland Airport, allowing the mayor, John Banks, to brag incessantly that the council was debt-free. The council got $4.90 for its 38 million shares. Last night they closed at $6.85.
Banks likes to pretend - and he invariably gets away with it - that the retirement of the council's debt was some particular act of personal financial wizardry on his part. Hardly. Council officials strongly urged Banks and his CitRat mates not to sell all of the city's shares (which were, of course, owned by ratepayers) at this time.
After declaring long and loud that wholly exiting the shareholding was the only way to move the city forward, the conservative councillors suddenly decided to have a bob each way and only sell half of the shares. Small mercies.
I should make clear that I have no objection in principle to the council divesting its interest - well, my interest as a citizen and ratepayer- in the airport. But the officials were right: there was so much upside that a sale at that time was a poor financial decision. After capital gains averaging 33.46% since they were issued in 1998, the shares appreciated by nearly 40% over the past year. So far as I can see, the council's balance sheet is about $74 million worse off than it would have been if Banks and the CitRats had listened to their advisors.
The trend seems likely to continue. The airport had its biggest week ever two weeks ago: 129,222 international passengers arrived or departed, a 17% increase on the same period a year ago. Don't expect to hear a lot of ballyhoo about dumping the rest of the shares: the council won't make that mistake twice. The point is, they made it once.
Banks gets away with it, of course, through copious application of bullshit. He behaves like a pompous ass and people seem to buy it. So it has been amusing this week to see him spluttering and fuming as details emerged of the government's grand plan for Auckland's transport problems.
From the moment he got into office, Banks began claiming initiatives that were either the work of the previous council, or of central government, as his own doing. Now that the government has been able to plan for the investment of taxpayers' money without his help, and in direct opposition to his advice, he's somewhat put-out.
The Auckland region will have its own stand-alone public transport authority, but it's the regional part that Banks objects to: the authority will be answerable to the Auckland Regional Council. The ARC, of course, has had its problems, but, as Brian Rudman speculates, the structure of the new authority will prevent it being able to do much meddling with operational activities.
The longer-term fix, as I have pointed out before, would be for people to stop voting for Citizens and Ratepayers candidates: they invariably screw things up and do things they said they wouldn't, as Gwen Bull and her comrades have demonstrated at the ARC. Anyway, Auckland's transport solution must be co-ordinated at a regional level, by a single organisation.
I must say, I like the look of the proposed future underground rail route for the central city. Assuming the costs can be kept under control, Auckland will start to look like a real city and Britomart - delightfully pretty, but still only a railway station - will start earning its keep. Meanwhile, Banks' pet project, the Eastern Corridor motorway plan (with optional harbour tunnel, according to Banks' imagination) looks headed for a years-long shitfight, in which the council will face a determined and competent residents' lobby.
Pro-road campaigners invariably neglect to put a value on the sheer strife involved in projects like that. They're already complaining that the ARC will be biased towards public transport. If it is, I suspect that will look like a prudent position in years to come.