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Support Submission of Infratil

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Mr Peter BollmannDirector, Property RationalisationNew Zealand Defence ForceDefence HousePrivate BagWellington

Dear Peter

This submission addresses Infratil’s credentials to be chosen to work with the Crown to develop civil aviation operations at Whenuapai Airport.

It also outlines how the Crown (especially its military interests) could work with Infratil and Waitakere City Council so as to:

Allow efficient joint military-civil use of the Airport for as long as the Crown requires the military use.

Allow the Crown to realise fair value from the site as military use reduces.

Allow the civil operations to be developed given civil aviation and environmental restrictions.

We have not addressed the wider achievement of Government’s policy goals as this is covered in the submission of Waitakere City Council.

At this stage of the consultation process it is neither necessary nor desirable for the various parties to the outcome to have hard and fast terms. Consequently we have focussed our submission on setting out a case for New Zealand Defence Force to work with Infratil and Waitakere City Council to optimise the Crown’s outcomes from this process.

Our objective is to be as transparent in our proposal as commercial prudence and the consultation process allow.

Our partner, Waitakere City Council, has a strong civic case for the Whenuapai site to be developed as a civil airport and industrial/commercial hub for the Northern and Western areas of Auckland. Infratil intends to provide its aviation and airport management expertise and invest in this development so as to show an appropriate risk-adjusted return for its shareholders.

Confirming that such a return is feasible will be the objective of the next stage of this process once NZDF/Government has decided that Waitakere City Council’s proposal is worth investigating and developing.

We intend to show in this submission that NZDF/Government can regard Infratil as a capable and reliable partner in such a project with a unique set of skills and credentials.

Infratil is a predominantly New Zealand owned company with approximately 20,000 share and bond holders. It has an almost 10 year track record of investment in infrastructure and has maintained excellent returns to its owners over that period. It has New Zealand provided capital resources sufficient to meet all the plausible costs of progressing the development of successful civil aviation operations at Whenuapai.

Infratil’s experience at Wellington International Airport ideally equips it with the skills to understand and manage the difficult environmental, social and civil aviation issues of an airport in an urban area such as Whenuapai.

Infratil has direct international experience in providing airport facilities to airlines in the low cost sector (the primary target for Whenuapai’s operation) through its ownership and management of Glasgow Prestwick International Airport. This has been one of the UK’s fastest growing airports over each of the last three years. Since Infratil acquired a controlling interest, Glasgow Prestwick’s passenger throughput has more than doubled to two million passengers per annum.

Infratil has world-class commercial airport experience. In particular it has experience at “brown fields” airports such as Whenuapai, which have their own particular challenges in building airline, passenger and freight support.

Infratil has management experience of airports where military and civil operations co-exist.

Infratil has a long track record of working constructively with local government and community bodies. In 2003 Infratil was the INFINZ “best corporate communicator, emerging leader” and received the “Best and Fairest” award from the New Zealand Shareholders’ Association. These awards reflect the fact that as a utility investor Infratil takes seriously its wider social responsibilities and the obligation to communicate and operate in a transparent manner with the greatest of integrity.

I recommend our submission to you and look forward to having the opportunity to work with NZDF on the development of a successful civil aviation operation at Whenuapai Airport.

Yours sincerely

Kevin O’ConnorChairmanInfratil Limited

Infratil Chairman’s Letter

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Waitakere City Council and Infratil are offering to establish civil aviation operations at Whenuapai Airport as defence use declines over the next four to five years. Over this period a plan will be developed for the site identifying areas required for aeronautical use and land available for commercial development, social use, or sale.

The core elements of this proposal are:

1. That civil aviation operations at Whenuapai developed by Waitakere City Council and Infratil will be successful.

2. That successful civil aviation operations and the associated development of the rest of the site represent the best value proposition for the Crown.

3. That Waitakere City Council and Infratil are ideally and uniquely able to partner with New Zealand Defence Force (NZDF)/the Crown in this project.

Waitakere City Council / Infratil PartnershipWaitakere City Council invited Infratil to join in the development of a successful civil operation at Whenuapai Airport. Infratil and Waitakere City Council have entered into an agreement that entails:

Infratil providing expertise and funding for the development and operation of the civil operations.

Both parties having board appointment rights.

Waitakere City Council having the right to take up a one third shareholding in the airport company at any time over the next seven years.

In this submission Waitakere City Council and Infratil are also jointly referred to as “the Partners”.

Waitakere City Council/Infratil Proposal to NZDF/the CrownThe Partners’ proposal to NZDF/the Crown entails:

The parties working together to enable civil and military operations to coincidentally occur at the Airport.

Gradual assumption by the Partners of responsibility for the maintenance, operation and development of the Airport.

Agreement for the long-term improvement of the Airport and the development and realisation of non-aeronautical land and assets to optimise value for the Crown.

Return to the Crown of the site if civil use of the Airport is not successful (and/or implementation of an alternative site use/disposal plan if that was preferred by the Crown).

Whenuapai Airport Aeronautical RequirementsWhenuapai comprises 311 hectares of which between a third and a half is likely to be necessary for civil aeronautical operations over the longer term. The land not required for this purpose would be available for other uses.

At Wellington International Airport, aeronautical use (comprising aviation and aviation support) occupies some 93 hectares, 85 hectares of which is airfield (of total land of 110 hectares). As Wellington is also a short-haul airport this is a reasonable guide

to the likely minimum requirement of civil aviation at Whenuapai. (NB recognising that Wellington has no airlines based there, no significant freight or express parcel operation, no material aircraft maintenance, engine or component overhaul operations, etc. – all of which could be part of Whenuapai’s future.)

This scale may be compared against Auckland Airport which has over 1,000 hectares designated aeronautical. Although, of this, only 309 hectares is operational airfield and 321 hectares is held for the second runway. At Christchurch Airport 328 hectares is designated airfield.

The Partners are proposing to widely canvas those with an interest in operating at the Airport and to develop schemes for aero/commercial land use to optimise the value of the site.

The Viability of Civil Aviation Operations at WhenuapaiPreliminary evaluation of the likely costs and revenues associated with civil operations at Whenuapai indicates that a viable commercial business is prospective for an investor willing to invest for long-term returns. This reflects projected capital and operating costs, and likely revenue levels, all of which have been based on preliminary information.

Proving up the commercial proposition will be a priority once NZDF has decided to progress discussions with the Partners.

The Partners intend to develop Whenuapai Airport to focus on low cost passenger services that would operate on a short haul basis to other airports in New Zealand, east coast Australia and the Pacific.

Ideally the Airport will attract support from carriers such as Freedom, Pacific Blue and Origin Pacific, which will provide “point to point” services.

Passengers will be attracted to utilise the air transport services by their low cost and will not mind the “simple” airport facilities.

The focus will be on high growth based on low costs/low frills services.

The civil operations will be complementary, rather than competitive, with those at Auckland Airport, which derives the majority of its economic value from long haul services and network carriers, and non-aeronautical property development.

Regulatory & Community Relations ManagementDevelopment of civil operations at Whenuapai faces a number of regulatory hurdles. Civil Aviation Authority (CAA) will be required to approve the airfield and operations. Consents will be required under Waitakere City’s District Plan.

At Wellington International Airport, Infratil has had considerable experience of both sets of needs.

Wellington is a compact airport in an urban setting. It faces safety, environmental and community relation challenges. Its success in each of these areas has been brought about by a long-term concerted programme of sympathetic engagement with its immediate neighbours and assiduous compliance with CAA requirements.

Background / Summary

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These experiences and skills will be a major attribute in the development of civil operations at Whenuapai.

The Case for SuccessThe Partners’ case for being selected by NZDF to be invited to develop the civil operations at Whenuapai is based on:

Consistent with global aviation trends, the high probability of success of the low cost/low frills approach.

The catchment of airport users who are likely to support air services operating from Whenuapai.

Infratil’s credentials and commitment to the development.

Waitakere City Council’s credentials and commitment to the development.

These factors are in addition to the other social/policy criteria addressed in the Waitakere City Council proposal.

Crown Achievement of Fair Value and Mitigation of RiskThe Partners contend that their proposal offers the Crown the best prospect of achieving, and gaining benefit from, the highest value use of the site.

Further, if the Partners’ proposal to develop successful civil aviation operations at Whenuapai fails, then the site will revert to the Crown for development of whatever alternative use the Crown deems appropriate at that time.

The Crown is not being asked to accept any risk in respect of the development.

The development of successful civil aviation operations at Whenuapai will optimise the site value and deliver the highest value return to the Crown.

If the Partners do not bring about successful civil operations in a reasonable time, then full control of the site would revert to the Crown for alternative use.

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Waitakere City Council and Infratil are the ideal parties to be chosen by NZDF/the Crown to progress development of civil operations at Whenuapai.

Further, they also offer the Crown the best possible prospect in respect of optimising the use, and hence value, of the Airport.

Partnership AgreementOn 17 April 2003 Infratil and Waitakere City Council entered into an agreement to progress the commercial development of Whenuapai Airport as military use declines.

The Partners entered into the agreement following a vote of the Waitakere City Councillors.

Salient features of the agreement are outlined below. A copy of the agreement is available to NZDF.

The Partners are to work together on the development on an exclusive basis.

Infratil is to provide expertise and all funding for the development.

When development progresses it is expected that an Airport Company will be formed with Infratil appointing four directors and Waitakere City Council two.

At any time over the next seven years Council has the right to take up (and thereafter maintain) a 33% shareholding. The price of shares taken up to be set so as to provide Infratil a 10% per annum return on funds invested to that point.

Waitakere City Council is thus able to participate in any value upside above a 10% per annum return, while being completely insulated from the risk that returns are less than this.

Waitakere City Council is at liberty to take up its share entitlement and to then sell its shares as a way of capturing value from the option.

Credentials of Waitakere City Council & InfratilThe credentials of the Partners are set out elsewhere in this submission. The key benefits the Partners bring include:

Waitakere City Council has rights, as the local territorial authority, under the Crown’s disposal process and it wishes to exercise these rights in accordance with its policies to progress the City’s long-term goals. In particular, these goals include being able to stimulate economic activity and develop jobs within the city so that residents will not have to travel long distances to work. Council’s policy goals accord with those of Government.

Council is uniquely positioned to determine the optimal social and economic use of the site and to progress that use. It so happens that the uses favoured by Council will also optimise the Crown’s outcome.

Infratil is a world-class airport operator, with a proven record and ideal skills to achieve the development of successful civil aviation operations at Whenuapai. It has direct international experience in the low cost airline sector and in managing ‘joint use’ airport facilities. Its financial resources and credibility are impeccable.

Infratil has a long track record of unimpeachable corporate behaviour and willingness to stick with projects to deliver long-term value. It can provide references from a wide variety of Council and community groups as well as having established good relations in its dealings with Government and its agencies.

Waitakere City Council / Infratil Partnership

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The Partners proposal to NZDF/the Crown for Whenuapai Airport entails a three-stage process (albeit, the stages will overlap):

1. The production of civil use of the Airport and the gradual substitution of military use as this winds down.

2. The production of a comprehensive development plan to determine long-term use of the 311 hectares, whether military/civil aviation, commercial development, social, or disposal.

3. Implementation of the comprehensive development plan and realisation of value to the Crown as land and assets not required by the Airport are brought into alternative productive use.

The proposal also envisages conditions to the Crown’s commitment to the Partners. The Partners are proposing to progress the development of successful civil operations at Whenuapai Airport. If this is not achieved the Crown would have the opportunity to resume its assets and dispose of them into alternative use (or require the Partners to progress some alternative disposal plan).

Today, the market value of Whenuapai Airport is low as it has no capacity to operate, or gain commercial benefit from, civil services and its alternative uses are of low intensity. The Partners’ goal is to work with the Airport military users and NZDF/the Crown to build up a successful civil aviation operation and to use this as the basis for ancillary commercial development of the surrounding area.

Joint Civil-Military UseAt present it is intended that military use of the Airport continue until at least 2007. It will be of considerable benefit to both the existing military users and the Partners’ civil operations if the civil operations can start as soon as possible.

The military users will be able to share costs with the incoming civil operations.

By initially leasing services and excess capacity from the military the civil operator will be able to minimise costs at a time when revenues would also be expected to be low.

From the wider community perspective there would not be the large dislocation of military operations winding down and civil operations winding up.

Infratil offers experience of “joint-use” airports. The priority needs of the military can be accommodated alongside the commercial requirements of the civil operation.

Coordination of Joint Civil-Military UseIt is expected that the Partners would submit a plan to the Airport’s current military users to gain ground space, to allow utilisation of aeronautical services (safety, ATC, etc), to share maintenance and operational costs, and to allow coordinated aviation operations. It is presumed that this will entail operational protocols to ensure priority military use, which also recognise the desirability of scheduled passenger services occurring to timetable.

There are a number of ground spaces that could be segregated from military use. The preferred positioning is likely to depend on the military’s own withdrawal plan.

The coordination of incoming civil operations with outgoing military will require some planning, but should not impinge on the viable operation of either party. There will be issues surrounding the Partners’ rights to actually undertake construction on the site, but there is no reason why this should impinge on military capability.

Transfer of Control from Military to Civil UsersAs defence gradually withdraws it is envisaged that the civil operations would expand.

The process of expanding civil use would be subject to meeting commercial and regulatory constraints:

Preliminary evaluation of Whenuapai’s aeronautical infrastructure has shown that it could cost in the vicinity of $50 million to bring the Airport up to the standard necessary to gain all Civil Aviation approvals and offer a basic level of facilities to domestic and international jet services.

Before such a sum was spent it would be necessary to gain expressions of commitment from airlines to use the Airport. It would also be necessary to gain, on a forward-looking basis, civil aviation and resource consents.

At some point it is anticipated that military use of the Airport will become incidental. At that time it is expected that the Partners will assume control and the military users will become the tenants, ie. a reversal of roles. The military users may of course depart altogether if they wish.

Site UseOnly a part of Whenuapai Airport’s 311 hectares will be required for aeronautical (aviation and aviation support) use (whether civil or military). As the parties are developing protocols for joint civil-military use of the Airport, a comprehensive development plan will also be progressed.

This will entail identification of areas required for aeronautical use (the priority) and the areas available for other applications.

The likely optimal use of the site will entail a range of applications and will depend on the Crown’s wider goals. Land would be available for commercial or social development or sale.

Waitakere City Council / Infratil Proposal

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Optimisation of Crown ValueIt is envisaged that the Crown will grant the Partners a long-term lease over most, or all, of the Airport.

This may be actually entered into once the Partners have agreed to take primary responsibility for maintaining, operating and developing the Airport. This may occur after an initial period of civil operations and after the comprehensive development plan has been developed, but some form of agreement will be necessary before Infratil commits capital for runway repairs, terminal development, etc.

The lease between the Crown and the Partners will be structured to ensure the Crown achieves optimal value from non-aeronautical assets and that failure of the Partners to achieve their goal of establishing a successful civil operation at the Airport will result in the return of leased assets to the Crown so that alternative uses may be progressed.

The Airport has negligible value without consents, infrastructure and customers. It will be the Partners’ role to invest in developing successful civil aviation operations. Having achieved this, the Partners and the Crown will benefit from the increasing value of the non-aeronautical areas of the site.

Indications of how a successful civil airport will flow onto the value of surrounding land, especially that which is actually part of an airport precinct is illustrated in Mangere. Evaluation of recent land development near the Mangere airport is set out later in this proposal.

Extraction of ValueThe scale of value that may be derived from the site is not known at present and it will take several years to prove and extract value. The agreement between the Partners and the Crown will have to allow reasonable time for civil operations at the Airport to become a success and for this to flow onto the value of non-aeronautical land. How this increased value would be passed to the Crown will require discussions between the interested parties once Government has chosen to allow implementation of the Partners’ proposal.

Factors that will impact the value of the non-aeronautical site include:

How successful the civil aviation operations become. The more successful they are, the greater is likely to be the value of the surrounding site.

The split between aeronautical and non-aeronautical land. Up to 170 hectares could be available for non-aeronautical development.

How much of the non-aeronautical land Government is willing to see developed for ancillary commercial purposes. Recognising that some may be designated for recreational, conservation, social, etc. uses.

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Whenuapai comprises 311 hectares and the allocation of this land between airport, commercial and other use will be important in respect of the value derived by the Crown from the non-aeronautical area.

Set out in this section are some preliminary ideas about how the airport operations may be developed on the site, and the consequences in respect of residual land that could be developed into commercial use, or designated by Government for social/recreational/cultural use.

The development of a comprehensive plan will be an extensive process and how and when it evolves will depend on the terms of the relationship with the Airport’s military users.

It is likely that the Partners’ development of a scheme for land use will take time and final decisions may only occur when Defence has effectively handed aeronautical control to the Partners.

Airport / Commercial DesignationThe intended approach will be iterative and is likely to entail:

In the first instance it is up to the Crown to stipulate ultimate site usage. This may be “civil airport and commercial”, but it may also include some space for recreational use, retention of the existing village, etc. This stipulation may form a definite blueprint, or it may be set out as guidelines to be developed as the Partners, and Government agencies, develop a site use plan.

The Partners will canvas potential users of the Airport and from this will develop a perspective on the likely space/utility needs of the Airport over the next 10-20 years.

Having identified the likely needs of the Airport, the Partners will then map out “surplus” land. “Surplus” in the sense of being available for other use. The use for this land will then be developed, again with possible input from Government agencies.

Long-term Use of the Airport LandInfratil has undertaken preliminary work to scope up likely uses of the site. This has entailed identifying likely minimum needs for aeronautical use and the likely best use of residual space.

The site has been divided into six sub-areas:

1. Runway 03/21 and related operational area.

2. Area east of runway 03/21 (golf course and wetlands).

3. Apron and hangar precinct – the future terminal area.

4. Runways 08/26 and 12/30.

5. Accommodation and recreation area.

6. Housing and other land to the south west.

Each of these areas, and how their use is likely to be allocated between Airport/Other, is briefly described below:

1. Runway 03/21 and Related Operational Area This is the core of the Airport and would form the bulk of the aeronautical area. It amounts to approximately 100 hectares.

Given the nature of air services being considered for Whenuapai, the immediate objective is likely to be to maximise the use of the runway consistent with not having to achieve full precision approach standards, meaning operating from a 150 metre rather than 300 metre strip, accepting a high minima and, depending on the requirements of commercial operators, making progressive decisions on whether to retain full approach lighting, reduce to shorter configuration per runway 08/26, or delete the lighting altogether. ILS capability would preferably be retained, although operations could revert to systems equivalent to those used at airports such as Queenstown and Palmerston North.

Decisions about these factors will be made once the Partners are better informed about the condition of navigational aids and the likely timetable for major runway reconstruction. There has not been an opportunity to undertake a detailed review of the condition of the runway. Its condition is known to be poor and a major reconstruction will be required over time.

While a timetable for runway reconstruction will be developed in due course, once its condition is better appreciated and likely use better known, the following are likely to form part of the redevelopment:

1. Immediate removal of any remnants of the arrestor system.

2. Reconfiguration of the western end.

3. Possible partial westward relocation and lowering of Brigham Creek Road below the obstacle limitation surfaces removing the requirement for manual intervention from the control tower to restrict traffic movements.

4. Provision of a 90 metre RESA beyond the runway strip end to a point immediately adjacent to the road with the 21 localiser aerial at the end of the RESA. Creation within the RESA of a starter extension with the western end of that starter extension approximately 40 metres from the end of the RESA.

5. Reconstruction of the eastern portion. Either a partial re-build or short to medium term abandonment of this end for operations on 03, but use as starter extension for operations on 21.

6. Reconstruction of the central portion of the runway is likely, but whether this would entail a full 45 metres, or just the centre 30 metres will only be known after site work.

The western end changes could provide up to 150 metres of usable runway for operations for both 03 and 21. This could be applied as an addition to the available 2,031 metres or used in substitution for the longitudinally sloped section at the eastern end, which is likely to require reconstruction at some point.

Airport / Commercial Development

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Over the more medium term the following developments would also occur:

7. The apron edge taxiway, which acts as a parallel taxiway, is too close to the runway and therefore does not comply with CAR 139.06 for code C and D aircraft. However, initially at least, this would be dealt with via operational procedures rather than reconstruction.

Longer term, a parallel taxiway would be created based on a 103 metre separation between the centrelines of the taxiway and runway allowing contemporaneous Code D (say military B757) and Code C operations.

8. It is expected that the VORTAC navigational aid would be moved as its current position is likely to limit long-term commercial development of the Airport. Over time it is also likely that PAPI would be installed to replace the VASIS.

9. The operational area would be fenced to CAA standards.

How the Airport is to be operated and the plan for investment in infrastructure will depend on likely airline interest in providing services and the condition of existing infrastructure. Developing the operating/upgrade plan would be a priority.

2. Area to the East of Runway 03/21 (Golf Course and Wetlands)This area would not be directly required for the Airport’s civil operations. It amounts to approximately 45 hectares and a development or disposal programme could be determined with NZDF/the Crown.

As this land would be contiguous with the Airport, it would be important that its long-term use was compatible with the Airport operations. If the land were sold, its use would have to be constrained and future owners restricted from participating in any action against the Airport activities.

The wetland area could be retained by the Crown for environmental reasons, or vested in the appropriate authority once it has received an appropriate bill of health (it was formerly used as a land fill).

3. Apron and Hangar Precinct (The Future Terminal Area)Over the medium term this area of approximately 40 hectares would be required for the terminal and related activities.

The current apron and hangars are close to the runway, constraining the depth available for the terminal precinct. The optimum location for the terminal will reflect the need to provide space to the airfield (takeoff, landing, taxiing, parking) on the one hand, and terminal needs on the other.

When airfield and terminal needs are overlaid on Whenuapai it is clear that much of the existing apron and hangar area parallel to 03/21 is not suitable in the long-term for a commercial terminal area, but is still useable for aircraft parking and general aviation. The area best suited for a commercial terminal lies further back from the runway.

4. Runways 08/26 and 12/30This area of approximately 65 hectares would be designated for a mixture of aviation and ancillary commercial use, mainly the latter. Depending on demand it may be allocated to aircraft basing, maintenance, etc.

Runway 08/26 is not likely to be required over the longer term for civil aviation, but in the short term it may be a useful substitute for 03/21 during that runway’s reconstruction.

It is likely that the area would be progressively brought into ancillary commercial and industrial use, possibly with parts being retained for general aviation.

Precise dimensions of the commercial/aviation areas cannot be estimated at this time. This is an area that would be expected to deliver value to the Crown at the time it was brought into development for activities ancillary to the primary airport use.

Runway 12/30 is already closed and would not be required for commercial aviation purposes. The area that extends to the east of 03/21, currently used for engine run-up, would also not be required for aviation purposes.

5. Accommodation and Recreational AreaThis area of approximately 40 hectares would be used for a mixture of terminal and commercial use.

Land to the east of the entrance road and stream delineated by Kupe Avenue is likely to be allocated to commercial development.

Access to the terminal area would need to be on the existing main road system (Tamatea Avenue, Tainui Crescent and Takitimu Street).

Vehicle parking for the terminal may initially be on areas of apron, but in the longer term it is likely the recreation field would be converted to asphalt.

The topography of the land to the west of the stream means it may be best suited to community, recreation or housing uses. Relocation of some base houses is an option. The area could also accommodate residual non-airfield NZDF activities after the bulk of the military operation has shifted to Ohakea. Facilities that are an asset to the community, such as the pool, may be retained for social use over the medium term.

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LEGEND

Possible Surplus

Commercial/Aviation

Terminal/Commercial

Approved Motorway

Military

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WHENUAPAI AIRPORT REVIEW

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6. Housing and Other Land to the South WestOnly a small part of this area of approximately 20 hectares is likely to be required by the Airport. The remainder could be disposed of in its current use or developed over time for commercial use.

Any properties sold would need covenants placed on their titles that note the presence of airport noise and activities and limit the ability of future owners to bring actions against the airport.

A part of the grazing land to the east of the houses is likely to be needed for road realignment and would fall within the medium term needs of the Airport. The remainder of this area could be developed or sold over time.

Conclusions An important part of the Partners’ proposal to NZDF/the Crown is that Whenuapai Airport offers sufficient space for both a successful civil Airport and a number of other land uses.

Over time, the optimal value of the site will be achieved by allowing the development of a successful civil airport and the parallel commercial development of surrounding areas.

However, recognising that Government may have other than purely value maximising objectives, the land surplus to airport needs could also be placed in civil or conservation use if that outcome was preferred.

The programme for the Crown to extract value will take some considerable time to develop. It will entail Waitakere City Council, Infratil and NZDF working together to develop an agreed site use plan. Once this is in place the parties will need to develop a plan for the development of, and realisation of value from, the non-aeronautical areas.

Over the long-term the 311 hectares may end up as:

Long-Term Allocation of Airport Land (hectares)

Airfield 100

Civil terminal area 20

Military terminal area 20

Commercial aeronautical 75

Other / Surplus 96

Total Airport 311

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The Partners intend to develop civil aviation at Whenuapai Airport to suit low-cost/low-frills/low-fare services. There may be limited freight operations (likely to be mail and express parcel services), but the main focus will be on passengers. A development of this nature is likely to stimulate additional market growth rather than simply drawing from existing Auckland airport traffic.

Very preliminary discussions have been held with a number of local airlines and parties with interest in this area. Feedback has been favourable, albeit contingent.

The development of the Airport operations will depend on how expressions of interest coalesce into firm commitments to use. Significant capital spending on the Airport will only occur once there is certainty of use.

Clearly this is a “chicken and egg” issue, but it largely relates to the speed with which development will occur.

Slow development may entail a period of regional services from turbo-prop aircraft demonstrating passenger demand. Achieving this is likely to entail little spending on the airport and Infratil expects to be willing to invest in the Airport in anticipation of turbo-prop services as the value at risk will be relatively modest.

Faster demand and airport growth would entail jet use. For the Partners to invest to accommodate jet services there will need to be some certainty that the services will occur. The cost of upgrading the Airport for jet services is likely to be significant and Infratil would want to be certain of some airline interest before making such a commitment.

Preliminary Airline InterestMeetings with airline representatives have indicated that Whenuapai is of interest. In part because Whenuapai offers access to an attractive catchment of potential passengers, in part because of benefits Whenuapai offers relative to Auckland Airport.

A recent Massey University study forecasts an increase in the Auckland area population by 434,800 over the period 2001 to 2021. A large part of this population growth will occur north of the Auckland isthmus. The existing and committed land and harbour transport network for Auckland means that Whenuapai is, and will continue to be, the more accessible airport for a large part of Auckland’s population, up to 520,000 people. In 20 years this may be 1,000,000 people.

Whenuapai’s civil operations are not intended to be in the same league as those of Auckland Airport. The Partners’ 10-year target is to stimulate a market equivalent to approximately 15% of the base Auckland air travel market.

In addition to its scale, the nature of civil operations at Whenuapai would differ to those at Mangere. The focus will be on offering a base for low-cost/low-fare services. A multi-user terminal would be created to allow aircraft to come in as domestic and depart as international (and vice versa) with minimal ground time.

Modest airport facilities (cheap and cheerful) would complement the nature and style of low-fare airline services. Experience has shown that the key needs of this sector are:

Speedy turnaround times and few delays (given spare airfield capacity at Whenuapai this is the most easily delivered need).

Efficient passenger processing facilities.

Minimisation of charges and a close linkage of costs to services/benefits – airport and ground handling costs being a significant focus of low cost airline operation.

Large population base within a reasonable connect time (ie. reflecting both the size of the population and access).

Low-fare Airline GrowthThe intention of the Partners to focus Whenuapai on low-fare airlines is based on awareness that such services are the high growth section of the world aviation market and that they are not being effectively accommodated at Mangere.

An irony of Auckland Airport’s recent growth surge from full service carriers such as Emirates is that it has not been able to accommodate Pacific Blue which has been the highest growth airline in Australasia since setting up a little over three years ago.

Case Studies of Low-cost / Low-fare Airlines1. Southwest Southwest invented the low-cost / low-fare airline model in 1971. Since then:

Southwest has become the world’s most valuable airline by market capitalisation. Its success belies the famous Warren Buffet bon mot “If there had been a capitalist down there [at Kitty Hawk the day the Wright brothers made their first flight] the guy should have shot down Wilbur! ... one small step for mankind, and one huge step backwards for capitalism!”

Since listing in 1974 Southwest has out-performed the US share market S&P500 index by 16,000%.

Southwest has 385 aircraft and 122 on order. Its operations are entirely internal of the USA.

Airport Market

46

2. RyanairRyanair initiated a strategy to imitate Southwest in 1985. Since then it has grown to be the largest low-cost/low-fare airline in Europe and has achieved an explosive impact on the routes it flies.

Ryanair has proven the price elasticity of air travel. In its evaluation of airline and airports the New Zealand Commerce Commission has used elasticity rates of 1.1% to 1.5%, ie. a 10% drop in travel costs increases travel demand 11% to 15%.

The scale of market growth delivered by Ryanair belies these statistics. In addition to its own growth based on the attractions of its low fares, Ryanair’s arrival on a route has also stimulated responses from competitors that have seen their volumes also grow.

The crucial message of Ryanair’s operations is that the market for air travel is as large as airlines make it. It depends on the cost and availability of services rather than being a function of the size or wealth of the local population.

3. Virgin Blue / Pacific BlueWhile Virgin Blue’s growth benefited from the demise of Ansett and regulatory restrictions placed on Qantas’ competitive response, its low fare/low frill service has resulted in it carrying over 8 million passengers after three years.

4. Air New Zealand ExpressAir New Zealand introduced pared back services and lower fares on domestic services in November 2002. The average Air New Zealand fare was reduced 20%. In its first year of operation Air New Zealand Express carried 14% more passengers and the New Zealand domestic passenger air travel market grew in the vicinity of 10%.

ConsequencesAs noted in the Waitakere City Council proposal and its supporting appendices, airports are major sources of economic stimulation. Pertinent evidence of this comes from a November 2003 study undertaken for Scottish Enterprise on the impact of passenger services at Infratil’s airport at Glasgow Prestwick. Most of the 2 million (47% inbound) passengers who used this airport in the last twelve months were carried by Ryanair.

Impact on the Scottish economy, £89 million per annum.

1,500 to 2,000 (full time) jobs in Scotland, 620 to 720 in Ayrshire.

90% of passengers described the cost of the flight as an “important” or “very important” reason for taking the trip.

Ryanair expects to fly 1.9 million passengers through Glasgow Prestwick in the year to 31 March 2004 based on 21 flights a day (NB. Relative to Wellington this is fewer aircraft movements because Ryanair flies larger 737-800 with an average load of over 160 passengers per flight).

Scottish Enterprise Chief Executive Evelyn McCann noted. “The presence of budget airlines like Ryanair at Prestwick is a key economic success factor both at a local and at a national level. Without a low-cost carrier such as Ryanair flying from Glasgow Prestwick, the evidence provided by this survey suggests that a significant proportion of passengers would not be setting foot in Scotland or Ayrshire at all.”

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46

Aerial View of Whenuapai Airport

Aerial View of Wellington International Airport

48 49

To convert, even if gradually, Whenuapai Airport to civil use will require a number of regulatory approvals.

The nature of the approvals, and the likely difficulty in gaining them, will determine the type of air services using the Airport and their frequency.

At present (Airways Corporation data 2001) the Airport has 22,000 movements a year. It also has events such as night-time engine testing. Initial analysis of the noise envelope of start up civil operations is that they will fit comfortably within the envelope utilised by the military.

As an indication of scale it can be noted that the ten-year target for Whenuapai will be about 2 million domestic and international passenger movements a year.

The number of aircraft movements that may be associated with this level of passenger throughput can be inferred from Wellington International Airport. In the twelve months to 31 October 2003, Wellington accommodated 3,700,000 domestic and 440,000 international passengers. Halving the number of aircraft movements gives an idea of likely Whenuapai throughput:

International Jet 2,447

Domestic jet 12,407

Domestic prop 36,517

On an average day there would be 20 jet take-offs and 50 turbo-prop take-offs. This is about three times the current level of activity, however the nature of the activity would be very different to that experienced now. Some local residents will notice a quieter airport and some will notice greater noise.

The exact consenting process for civil operations at Whenuapai has yet to be determined. Residents will have an opportunity to present their views and to have these views taken into account by a regulatory authority in determining the airport sound envelope and hence times and frequency of use.

In reaching a decision on such matters, a regulator will take into account a wide range of environmental, social and economic factors.

Civil Aviation StandardsThere has been little investment in the aviation infrastructure at Whenuapai for a number of years. Further, certain of the standards used to lay out the airport, such as taxiway – runway separation, are below that which is required for some levels of civilian operations.

Bringing the airport up to Civil Aviation standards will require investment and will face a number of challenges. There are however a range of options as to how the redevelopment is progressed:

The type of civil operation will influence the type of compliance required.

Compliance may be delivered through upgrading infrastructure and/or changing operating procedures.

An initially favoured model is for Whenuapai to be managed to comply with CAA requirements in a manner that is akin to Palmerston North or Hamilton (as opposed to Mangere or Christchurch).

Auckland Airport, as an example, invests in infrastructure to deliver the highest quality airfield for the largest aircraft. Whenuapai’s customers will be operating smaller aircraft on the low-cost airline model. This increases Whenuapai’s options, at least in the short term as volumes are building.

Whenuapai need not offer a precision approach with its consequential costs. However, accepting a less demanding standard means accepting some limitations on operations so that compliance is achieved through procedural methods rather than capital investments.

Infratil/Wellington International Airport Experience: SafetyWellington provides a model for optimising the cost/benefit of CAA compliance that is directly comparable to Whenuapai. Wellington International Airport occupies only 110 hectares of inner city land, bordered by sea at either end, hills to the north and west and housing close in to both sides.

These physical restrictions mean that in some areas it is simply impossible to deliver compliance through capital investment and Wellington International Airport has had to develop operating procedures to achieve compliance. For instance, the taxiway at Wellington is only 101 metres from the runway (standards require 168 metres), and the strip width is 150 metres (precision approach standards require 300 metres). In these instances the airport has worked proactively with CAA and airlines to place constraints on the way business is conducted to achieve acceptable safety observance.

This attitude and approach will be necessary at Whenuapai especially during the civil operation start up period. The experience and expertise of Wellington International Airport in these areas is unique.

Infratil/Wellington International Airport Experience: Community Relations & Environmental In its 2003 annual report, Infratil notes: As well as being a major source of economic activity for the region and having approximately 1,000 people employed at the Airport, WIAL also works with local interest groups to ensure it makes a positive impact on the immediate area. Leonie Gill, local ward city councillor who lives very close to the runway stated, “Over recent years WIAL has made a real effort to get on with its community and to be a good neighbour. Its financial support of the surf reef, which a group of local surfing enthusiasts hope to build in Lyall Bay to the west of the Airport, and its work to rejuvenate the area with a shopping mall are helping to lift the civic and economic environment.”

In addition to the requirements of CAA, Whenuapai must also comply with RMA and district plan rules. The nature of these means that fostering good relations with the immediate community is commercially essential, especially for an Airport such as Whenuapai which is in a reasonably urban setting.

Regulatory & Community Relations

48 49

When Wellington International Airport was initially corporatised it inherited poor community relations based on years of indifference on the airport’s part. Initially those in the immediate neighbourhood opposed the airport in all manner of areas.

To change this, Wellington International Airport implemented a programme of regular community consultation meetings and began, where practicable, to reflect community concerns in its operations.

As the airport’s financial circumstances improved it has also been able to invest in its appearance and to provide financial and other support to community initiatives.

The commissioning of the new terminal resulted in a significant improvement in community attitude towards Wellington International Airport. A 2002 survey found that 99% of Wellingtonians felt that the new terminal was better, or much better, than the old one.

In recent years Wellington International Airport has also provided support for the development of a new surf reef in Lyall Bay and the south coast aquarium. Perhaps more importantly it has started to function as the regional gateway by hosting events and displays that relate to events occurring within its region.

The Partners bring ideal credentials and expertise to the task of building good relations with the immediate community. Infratil’s, care of its dealings at Wellington, Waitakere City Council’s, care of its usual roles of dealing with, and on behalf of, its community.

NoiseIt is apparent from media coverage and face-to-face feedback that there is concern about noise from people living in Herald Island, Greenhithe and Paremoremo.

Some people have indicated that they are not happy with the noise associated with aircraft movements, especially given the target of approximately doubling movements from current levels over the next 10 years.

In some instances it will not be possible to reconcile the residents to the civil use of Whenuapai Airport, but the Partners’ objective in the first instance will be to ensure that these residents have a better appreciation of the scale of the issue. A great deal of the concern expressed thus far is unwarranted given the actual level of noise that will eventuate, even if the Airport is very successful.

It is take-offs rather than landings that generate disruptive noise. 80% of take-offs will be to the west over very sparsely populated areas.

On the 20% of days when take-offs are going east (potentially 70 aircraft a day) it should be noted that at Greenhithe the aircraft will be at 1,000 feet which is about the height of an aircraft as it passes Roseneath on its way from Wellington Airport. A jet aircraft at this point on take-off makes about 80dBA if you are standing outside. This is the same experience as when a diesel bus drives past you. As Roseneath residents know, aircraft noise is not a major disturbance or hindrance to their lifestyles. At 70dBA you experience the same level of noise as a vacuum cleaner makes.

The charts on the following pages show the height contours for take-offs and landings at Wellington and Whenuapai and allow a comparison of the actual noise impact (Wellington) against the prospective (Whenuapai).

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Wellington Arrival Flight Path

54 55

The Waitakere City Council/Infratil proposal to NZDF/the Crown contains three key elements:

A successful civil operation as the optimal use of Whenuapai Airport in the context of Government’s wider policy goals.

If the Partners cannot accomplish the goal of developing a successful civil airport then the site will revert to the Crown for alternative use.

The successful civil airport will enhance the value of non-airport land and will result in high density, high value use of that land. In turn this will result in the derivation by the Crown of the highest value from the site.

The Crown will benefit from the site being put to its highest and best value use and will carry negligible risk.

Optimal ValueTo illustrate how the value of surrounding land is likely to be enhanced by the development of a successful civil airport, recent market evidence from Mangere and the Whenuapai area is noted below.

Recent sales of bare, but developed, commercial and industrial land near Auckland Airport have been at $120 – $150 per m2. This developed land value reflects an estimated $35 m2 development cost. It also includes a developer’s margin of approximately $50 m2.

These figures come from TTP’s recently concluded sale of their development property, Airpark 1. Airpark 2 is now being marketed. TTP paid approximately $30/m2 for the 87 hectares that make up the two Airparks. It spent approximately $35/m2 on development. 81% of Stage 1 was marketable land. 73% of Stage 2. Stage 1 was sold for $120 – $140 m2 and Stage 2 is on offer at $140 – $150 m2.

Recent sales of life-style blocks in the vicinity of Whenuapai have been at between $20 and $60 per m2. The wide range apparently reflecting buyers’ estimates as to the relevant land’s likely future use. If the zoning is unlikely to change in future the value is at the low end of the value range. If the land is considered likely to be brought into higher density use reasonably quickly the value will be at the top end of the range.

The key determinant of land value is the use to which the land may be put and how quickly this may occur, although other important factors include the cost of land restitution, the cost of land development and the amount of a block that can be sold into productive use.

As has been identified in the Waitakere City Council submission, Council’s compliance with the Auckland Regional Growth Strategy, The Auckland Regional Policy Statement and its own district plan goals make it unlikely that this site would be zoned for high density residential use even over the medium term. In this context, zoning for ancillary commercial/ industrial use would only be consistent with the planning framework if undertaken as a part the development of successful civil aviation operations. This means that the alternative use value should be taken from “life-style” blocks, ie. in the vicinity of $20 to $60 per m2, minus the restitution cost and minus the cost of land that is consumed by the development, ie. as roadways, etc.

Risk MitigationThe Partners’ proposition for the development of civil aviation at Whenuapai entails:

The Partners will establish an Airport Company to lease capacity at Whenuapai from NZDF.

During an initial period, perhaps of four years ( ie. until when military use is expected to end), the Partners will work out the land use plan for development of the Airport and the surrounding site. It is likely that this would occur in conjunction with NZDF and/or other Government agencies.

During this initial period, the Partners would commit to undertake investment to allow the long-term civil operation of the Airport.

Also during this period the Partners and the Crown would agree milestones that would designate whether the Airport was on track for successfully civil development, eg. by achieving certain stipulated passenger numbers within a 10-year period.

The Partners and the Crown will have an agreement to share the benefits of development of the non-aeronautical areas of the Airport.

If the agreed commercial and passenger milestones are not achieved, the Crown would have the right to terminate the Partners’ rights and to progress such other disposal plans that may then be preferred.

Fair Value & Risk Mitigation

54 55

Infratil was chosen by Waitakere City Council as its partner in the development of Whenuapai Airport because it provides exactly the capabilities and expertise necessary.

Infratil is a New Zealand owned and domiciled public company with a track record of successful infrastructure investment, management and development. It has sufficient capital resources to finance the development of civil operations at Whenuapai. It is listed and has a strong reputation for clear and comprehensive communication with the market.

Infratil owns 66% of Wellington and 100% of Glasgow Prestwick international airports. Two investments that have been highly successful and are managed to “world’s best” standards.

Infratil has direct international experience in providing airport facilities to the low cost sector through its operation of Glasgow Prestwick International Airport.

Infratil’s management have experience of a wide variety of airports, including airports with joint military-civil operations and “brown fields” airports that have required comprehensive development of infrastructure and services.

Infratil has co-investment expertise with local authority and community shareholders.

Infratil RolesInfratil’s role in its partnership with Waitakere City Council will be to build and finance a strong and successful business, including:

Develop airline, passenger and business support for the use of Whenuapai.

Manage, plan and finance Airport expansion programmes to ensure cost effective provision of attractive and operationally efficient aeronautical services and passenger terminal facilities.

Assist with maximising property development opportunities.

Integrate the Airport activities with those of the surrounding community to maximise the Airport’s contribution to the regional economy and to develop a constructive relationship with nearby residents.

Infratil Credentials: Wellington International Airport (66% Infratil-owned)Infratil took ownership of Wellington International Airport in 1998. Since then:

The $120 million terminal area has been commissioned.

Income from terminal facilities (such as retail concessions) increased 19% per annum.

Aeronautical income rose 11% per annum.

Operating costs fell 2% per annum. (The decline would have been 4% per annum, but for a $1.0 million increase in insurance costs post September 11.)

EBITD rose 20.3% per annum.

The Airport has weathered the failure of Ansett and has recently concluded price resetting with its major airline customers, including reaching agreement with its major airline, Air New Zealand.

A major commercial development has commenced.

Wellington International Airport is a complex and difficult business to optimise. It is situated on a small site in a highly built area. Over 70% of aeronautical income is derived from a single airline, which is attempting to merge its local activities with the airport’s second most important airline customer. Over the last five years the business focus has been to achieve highly efficient operations and to maximise revenues from its primarily domestic passenger base.

Comparing Wellington’s operational and financial performance with the international survey compiled by the UK Transport Research Laboratory shows the airport to be managed to world best standards.

The above have been achieved in partnership with Wellington City Council the 34% shareholder. Infratil and the City have maintained excellent relations notwithstanding that commercial and civil goals are not always coincident.

Infratil Experience and Credentials

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Infratil Credentials: Glasgow Prestwick International Airport (100% Infratil-owned)Glasgow Prestwick International Airport has several features directly relevant to Whenuapai:

Glasgow Prestwick is Glasgow’s second airport (Glasgow’s population is approximately 650,000 and, unlike Auckland’s, is essentially static). Its business focus is on low-cost passenger services (mainly from Ryanair) and B747 freighters. The Airport was facing decommissioning until these two activities were developed.

Infratil’s initial investment cost reflected the Airport’s marginal business case at that time. The current value reflects the huge growth in passenger throughput (up over 100%) since January 2001.

The Airport has a material military presence, both from itinerant use and a permanent navel sea rescue operation base.

The commercial goal at Glasgow Prestwick is to maintain aeronautical services/facilities to suit low-cost carriers, while increasing passenger services/facilities to build per-passenger value.

Infratil Credentials: Management ExperienceInfratil’s manager, HRL Morrison & Co Limited (“Morrison & Co”), has undertaken numerous airport transactions and has been responsible for the acquisition, transition and ongoing management (in addition to Wellington and Glasgow Prestwick) of Perth International Airport (5 million passenger movements per annum, A$643 million acquisition cost) and the Australian Northern Territory airports at Darwin (1 million passengers), Alice Springs and Tennant Creek (0.8 million passengers) at a cost of A$110 million.

In all of these instances the acquisitions involved all aspects of arranging financing, valuing the business, closing the purchase, ongoing financing of the relevant airport and its day to day and strategic management.

In addition to these successful transactions, Infratil’s management have also been engaged in seeking out further opportunities for Infratil in Europe and North America. In both regions the focus has been on airports that are very similar in circumstance to Whenuapai.

Airports that have undeveloped infrastructure, usually because their prior use was military.

Partnerships with community interests.

Airports where airline interest is being driven by the huge growth of low-cost carriers such as Ryanair, which wish to escape the congestion they are creating at existing airports and are willing to align with low-cost airports.

Infratil Credentials: Joint Civil/Military AirportsAt Whenuapai the relationship with the military users of the Airport will clearly change over the next five years. Initially it is contemplated that civil operations will be a minor part of the Airport activities, but these will build up and the civil/military roles will be reversed.

Infratil’s management have had experience at each stage.

At Wellington there is a RNZAF terminal and occasional military movements.

At Glasgow Prestwick there is a permanent air naval establishment that provides sea surveillance and rescue services and has priority over civil operations. In addition, the airport frequently hosts itinerant military aircraft movements.

Darwin Airport is a joint use airport with the Royal Australian Air Force. Both day to day operational arrangements and longer term maintenance of common infrastructure, capital expenditure, master planning and development, etc. are covered by a comprehensive joint use agreement.

Infratil Credentials: Co-investment with Local Authority & Community InterestsInfratil was established at a time when Government policy changed from comprehensive Government (local and central) ownership of infrastructure to the encouragement of private capital and management disciplines. Most of Infratil’s New Zealand investments have subsequently occurred alongside or in partnership with community interests.

TrustPower: Rotorua Electricity Charitable Trust, Tauranga District

Council, Tauranga Energy Community Trust.

CentralPower Palmerston North City Council, CentralPower

Electricity Community Trust.

Powerco New Plymouth District Council.

IO Fund Christchurch City Council’s Orion Limited.

Port of Tauranga Bay of Plenty Regional Council.

Wellington Airport Wellington City Council

Whenuapai Airport Waitakere City Council

Infratil Credentials: Investment StrategyInfratil’s investment strategy entails:

Investing in utilities and infrastructure where there is a prospect of above average risk-adjusted returns. Usually related to a “step change” in value and/or a willingness to take a long-term view.

Investing for the long term.

Investing where Infratil has expertise and can add value to management via control or influence.

The very long-term focus and provision of a strong expertise base to the fields where it invests make Infratil a unique infrastructure investor in New Zealand.

Infratil ManagementInfratil is managed under contract by Morrison & Co. Morrison & Co has offices in Wellington, Brisbane and Berlin.

Infratil’s management has industry expertise in the fields of airports and renewable/waste energy generation and marketing.

56

Support Submission of Te Kawerau a Maki

58

Minister of DefenceNZ Defence ForcesDefence HouseMolesworth StWellington

Tena koe e te rangatira.

I write to you in respect of the Whenuapai Airbase.

Firstly, Te Kawerau a Maki are the mana whenua of Waitakere City and surrounding areas. Te Kawerau a Maki Tribal Trust is the mandated legal entity that represents Te Kawerau a Maki iwi. We are the northern most iwi of Tainui and have lived in this area for over a thousand years, descending from our ancestor Maki. Our mana whenua status and interests in this area are well documented through the records of the Maori Land Court and in claims before the Waitangi Tribunal. We have historical interests in Whenuapai and are undeniably the iwi group with interests most closely associated with the land.

It should be made clear that Te Kawerau a Maki has a strong working relationship with Waitakere City Council.

In many quarters – including the Ministry of Maori Affairs – the relationship is hailed as a model of how local government and iwi can work constructively together. Waitakere’s Eco City philosophy of sustainable economic, social and environmental development sits comfortably within a Maori dimension.

The retention of Whenuapai Airbase and its infrastructure is another project that Te Kawerau A Maki looks forward to working with the Council and its commercial partner, Infratil, on.

Te Kawerau A Maki, therefore, strongly supports the proposal as presented by Waitakere City Council and Infratil and we are pleased to append our submission to theirs.

Employment and Economic Development: Employment opportunities for all people in the City – and most particularly the 13% of Maori residing in Waitakere – is crucial if the region is to develop further. An airport, supported by surrounding business will advance a range of economic and social challenges that face Waitakere City.

A commercial airport and the economic activity that will spring from it is the only sustainable option open to Crown decision makers.

It fits with a number of central and local government strategies, including the Auckland Regional Growth Strategy, NZ Sustainable Development Strategy, AREDS (Auckland Regional Economic Development Strategy) and Waitakere City’s own Long Term Council Community Plan.

Te Kawerau A Maki is, also, well positioned to capitalise on possible tourism opportunities (NZ Tourism Strategy) that may arise.

We note that should Whenuapai be retained as an airport, considerable infrastructure work will be carried out. Te Kawerau A Maki has a proven track record in working with regulatory authorities, particularly Waitakere City Council, on resource consent applications for major projects.

The iwi has also been closely involved in physical construction and architectural design; projects include the $14 million West Wave Aquatic Centre development recently opened by the Prime Minister and the $25 million Waitakere Stadium, due to be completed in June 2004.

Other Options:Other future use options for Whenuapai presented by New Zealand Defence Forces give rise to some concern for iwi. The base borders the upper reaches of the Waitemata Harbour, a traditional food “basket” for iwi. In recent years stormwater run – off and other pollutants have seriously degraded the water quality in the Harbour. We view the option of intense urbanisation (or housing) with associated stormwater and sewage issues with particular concern in this regard.

On the other hand, the investment in infrastructure planned by Infratil could indeed improve the current environmental situation.

Further, by raising the possibility (and therefore public expectation) of housing, shopping malls, entertainment precincts etc, the Crown (NZDF) has clearly overlooked its obligations to iwi in terms of the offer back process under the Public Works Act, 1993.

Consultation Process:In closing, Te Kawerau A Maki is pleased to have the opportunity to present this submission in support of the Airport option.

However we ask it to be placed on record that we are concerned that there has been no formal contact between Crown officials and iwi on this matter.

We sincerely hope – indeed expect – that during Stage 2 of its consultation on Whenuapai, the Crown will engage more openly with Te Kawerau A Maki on this important matter.

Yours truly,

Te Warena TauaChairman

Te Kawerau a Maki Chairman’s Letter