Councillor Coker Breaks Ranks Over "Project Oscar"; Government Blindsided by Council 31 May Motion Expressing Concern for Tarras Airport Project

Behind the scenes: Treasury reveals confidential communications between Christchurch International Airport & government, as Coker expresses concern that CIAL has no business case for Project Oscar

Dr. Melanie Coker is the first Christchurch City councillor to publicly show concern about CIAL’s lack of a business plan for the airport build in Tarras, Central Otago, after she was shown a cache of Treasury documents from February of this year.

Pictured: Dr. Melanie Coker, Spreydon Councillor (source: Christchurch City Council website)

Her comments come on the back of a council motion passed by a single vote on 31 May that saw Coker and 6 other councillors signal “concern at the strategic direction of Christchurch International Airport Ltd’s proposal to continue to progress an airport at Tarras due to the costs and climate change impacts.”

The Christchurch City Council has a controlling 75-percent interest in Christchurch International Airport Limited and is one of several council companies that councillors might consider for sale. The government owns the remaining 25-percent stake.

The Council’s 31 May motion has blindsided CIAL and the government.

Pictured: Tarras airport mock-up: CIAL believes it is feasible to build a runway that is 2.2 to 2.6 kilometers in length (Source: Unlocking Potential Central Otago’s runway to a future focussed airport)

Coker was the only councillor to respond to The Wigram’s questions.

She, along with the Mayor and the other councillors, were provided with a complete cache of Treasury documents and communications from February.

They revealed the government, as a minority shareholder in Christchurch International Airport, had set a “high bar to receive Government support” for the Tarras build, known by the Council-owned company as “Project Oscar”.

CIAL’s Case for “Project Oscar”

CIAL’s public case for Project Oscar was included its August email update. CIAL wrote:

“Demand for air connectivity to Central Otago is likely to far exceed the region’s current airport capacity over the next 30 years, resulting in the region spilling more demand than it meets by 2050. Increasing the capacity of existing airport infrastructure only moves the problem for Central Otago out a few years.”

“A shortage of air capacity is likely to have a greater impact on residents through reduced choice, longer journey times, increased cost, disconnection, economic loss and higher emissions. A new jet-capable airport would provide capacity, efficiency, resilience and opportunity. Ongoing weather analysis using onsite data supports the modelled data, showing local conditions are within operating parameters. Collection and assessment of data will continue.”

“A modern airport secures high quality air connectivity for at least 50 years, securing economic activity for the regions and future generations.”

However, confidential Treasury communications paint a different picture, providing an inside view of Project Oscar’s pivotal role in the airport’s post-COVID recovery plans.

A “Aide Memoire” (24 March 2023) prepared for Minister for State Owned Enterprises, David Clark, notes:

“CIAL is the second-largest airport in New Zealand, serving as the main gateway for the South Island. Pre-COVID-19, CIAL catered for over 10,000 international and 70,000 domestic flights each year. During COVID-19, CIAL reported a positive NPAT, paid dividends, and did not make any staff redundant. CIAL reported strong HY23 results and expects to return to pre-COVID-19 passenger levels in FY25. CIAL advises that recovery is constrained by supply-side (airline) capacity.”

CIAL’s proposed pathway for incoming flights for its preferred runway alignment (Source: Unlocking Potential Central Otago’s runway to a future focussed airport)

The Government’s High Bar

In a ‘statement of intent’ to CIAL, SOE Minister David Clark told the airport chair, Susan Drayton, the consultations with the Tarras community and “shareholder updates” were to be of the “highest standard”. He also expected the airport to “engage with The Treasury”.

When The Wigram asked CIAL about the existence of “high bar”, its legal team responded on 26 July:

“We again note that the passage you refer to is contained in internal email correspondence between Ministerial Offices and Treasury, as opposed to formal correspondence to CIAL through the Letter of Expectations process described above”.

The proposed “Departure” flight path for its preferred runway alignment (Source: Unlocking Potential Central Otago’s runway to a future focussed airport)

Asked by The Wigram whether CIAL has reached the “high bar” and how high the bar is, its legal team responded on 26 July:

“In any event, given CIAL has not yet commenced any development, we are not in a position to comment on whether any particular development standard has been reached. As noted above in the extract from pages 14 and 15 of CIAL’s FY22-23 Statement of Intent, CIAL has adopted a phased approach to the Central Otago Project, with the project currently in the engagement, validation and planning stage.”

Consulting with Tarras Locals

Communications on 11 April 2022 between Treasury and Amanda Wilson, the Finance and SOE ministerial advisor also show Grant Robertson and David Parker expected the airport to prioritise “community consultation” in Tarras where there has been some local opposition to the project.

Quizzed about its consultation role, CIAL’s legal team responded:

“While CIAL is under no legal obligation to consult in relation to the Project or otherwise publicly engage at present, to assist public understanding of the context of the Project and CIAL's decisions, CIAL has committed to respectfully engaging with the community and proactively publishing information as it completes pieces of work.”

But the government’s expectations, as we will find, were something CIAL could not ignore.

A New Land Purchase and a “No Surprises” Policy

On 15 May, the airport’s Chief Financial Officer, Tim May, told Treasury officials Kylie Kuan and Ben Xu:

“Confidential and not for onward distribution or release without approval

Kia ora Kylie and Ben

Just under our ‘No Surprises’ policy, a quick note to let you know that Christchurch Airport has just settled on the acquisition of a further 44ha of land in Tarras that sits adjacent to land it already owns from local Tarras resident…”

However, the 31 May council motion that followed CIAL’s purchase of a 44-hectare farm, blindsided the government.

Blindsided

On 1 June, the airport’s Chief Financial Officer, Tim May, told the Treasury officials Ben Xu and Kylie Kuan:

“IN CONFIDENCE

Sorry – forgot to mention but should also add that the last minute motions, including the one referenced, were not brought to CIAL’s attention before being debated in the public domain”.

On 6 June, Ben Xu informed Amanda Wilson, advisor to Ministers Robertson and Clark.