Hood aerodrome: unanswered questions

The following article, which the Wairarapa Times-Age published this morning under my byline, began as a letter to the editor and just sort of grew. It's unlikely to be of much interest to readers outside the Wairarapa.

From the outset, there have been unanswered questions surrounding the proposal to spend $17 million upgrading Hood aerodrome. It wasn’t clear who was driving the initiative and we weren’t told, at least initially, how much money Masterton ratepayers were expected to contribute.

As time has passed, some answers have been provided. It took several days before Masterton District Council chief executive Kath Ross told the Times-Age the council would contribute $7 million on top of the $10 million coming from the government. Information subsequently provided to me by Ms Ross’s office suggests the council’s actual commitment will be $4.2 million, with an additional $2.75 million to be sought in the form of “grants, fees, charges and co-investment” – whatever that may mean. 

Not only does it all seem a bit woolly, but ratepayers are entitled to wonder why these figures weren’t disclosed at the start. After all, the people of Masterton will effectively be paying twice for the upgrade, both as taxpayers and ratepayers. And the key question which remains unanswered is: why?

Unfortunately the council remains evasive. Concerned that no convincing case had yet been made publicly for the Hood upgrade, I made an Official Information request to the council for documentation relating to the project.

My request sought all relevant information, including any business case prepared in support of the upgrade.

What I initially got was a letter providing some additional superficial detail about what the council proposes to do, but conspicuously omitting any cost-benefit analysis or substantiation of the project’s promised economic benefits.

Not satisfied with this response, I sought further information. I asked specifically for minutes of council discussions relating to the upgrade and for budget forecasts covering projected returns and/or deficits. Under the disclosure provisions of the Local Government Official Information and Meetings Act, this information should have automatically been provided in response to my first request, but wasn’t.

I fared slightly better, but only slightly, on my second attempt. This produced the disclosure that there were no minutes relating to the decision to seek Provincial Growth Fund money for the upgrade, for the strange reason that councillors never formally adopted the proposal.

I was told the draft application to the PGF was “shared” with councillors in workshop sessions (how thoughtful of council officials to keep elected members in the loop). But not being regarded as official meetings, workshops happen out of the public view. So we have no idea what (if any) debate took place around the council table, or how rigorously (if at all) the proposal was assessed.

This seems an odd way to conduct council business, given that Masterton ratepayers will be required to contribute at least $4.2 million. That’s a lot of footpaths.

There was further discussion during a “Zoom briefing” of councillors under the Level 4 lockdown in April, but again no record was provided of what was said. It’s almost as if the lockdown was used as an excuse for the lack of transparency and due process.

The material provided to me by the MDC further revealed that councillors considered an item relating to the Hood development in a public-excluded session last year. All detail of that discussion was withheld on the ground that it might prejudice the council’s commercial operations.

Similarly, in its previous release of material to me, the council provided a briefing document supplied to local MPs and councillors, but blacked out all relevant figures relating to council investment in the project on the basis of “commercial sensitivity”. That document “conservatively” estimated economic benefits of $248-307 million from the Hood upgrade but didn’t explain how those figures were arrived at. For all we know, they could have been plucked out of the air.

As part of the second release of information I was also provided with a poorly written “executive summary”, of anonymous authorship, outlining the supposed costs and benefits of the upgrade. As with previously disclosed information about the project, this document was heavy on optimistic assumptions and positive-sounding buzzwords, but light on substantive data.

The executive summary concedes that the benefits of the upgrade are “uncertain” and positive outcomes are “not guaranteed”, in which case one might ask why the council is committing millions of ratepayer dollars to the project. Commercial risk is the realm of the private sector, where people gamble with their own money.

Most conspicuously, the documents fail to reveal who will use the improved aerodrome/airport and where the projected financial returns, assuming there are any, will come from. The projections rely heavily on the hope that scheduled air services will resume – but there’s no indication that any airline is eagerly waiting for Hood to be improved, and nothing to suggest that upgrading the aerodrome will magically make it profitable. Not one of the cheerleaders for the project has identified a single new user.

All we’re left with, after going through the documents released by the council,  are several mysterious references in the executive summary to “facilitated projects” at Hood, all detail of which was blacked out – again, on the grounds of commercial confidentiality.

We can conclude from this that the council is probably involved in negotiations with an undisclosed party or parties regarding some form of commercial activity at Hood, not necessarily related to passenger services, and has been persuaded that it’s the best if the public is kept in the dark.

Those with suspicious minds might wonder whether the council has been sweet-talked into bankrolling an ambitious, aviation-related project in which ratepayers could end up carrying the commercial risk – in which case we’re entitled to know what our officials are signing us up for.

Otherwise the rationale for the upgrade remains unclear. A cynical explanation is that taxpayers and Masterton ratepayers are bankrolling a Labour Party strategy to win the Wairarapa seat back from National.

Mayor Lyn Patterson’s column in the Times-Age last week did nothing to clarify things. Presented with another opportunity to mount a convincing case for the Hood upgrade, Ms Patterson resorted to more airy, feel-good platitudes about putting Masterton on the map.  

We’ve still seen nothing to indicate the upgraded aerodrome will generate an economic return and thus justify the investment of ratepayers’ money that might be better spent on other services or facilities. And perhaps even more disturbing is the impression that councillors have been passive spectators in whatever is proposed.

Best-case scenario: the council is secretly talking to a prospective Hood user who promises an economic bonanza but wants the ratepayers to pick up the tab. Worst-case scenario: both the council and the government are taking a massive punt with our money and we can only cross our fingers and hope for the best. Either way, the facts should be put before us. 

Is the public bankrolling Labour's bid to reclaim Wairarapa? It certainly looks that way

Jacinda Ardern spent Friday campaigning in the Wairarapa. Labour is targeting the National-held seat and is confident it can win.

The party’s candidate, list MP Kieran McAnulty, is an ambitious, energetic local with a high profile. In 2017 he got within 3000 votes of the sitting MP, the lacklustre Alastair Scott, and this time he faces a first-time National candidate, farmer Mike Butterick, who is not well known.

Although it’s essentially a rural electorate, Wairarapa has been held by Labour before – most recently by Georgina Beyer from 1999 till 2005 – and an influx of new residents, many of them from the Labour stronghold of Wellington, could help tilt the scales in Labour’s favour.

Ardern’s charm offensive on Friday gives context to the otherwise puzzling announcement in July that the government will invest $10 million in an upgrading of Masterton’s Hood aerodrome, a facility currently used mainly by topdressing planes and recreational flyers. That sum will be augmented with a multi-million-dollar contribution from Masterton District Council. (I say multi-million because the actual sum isn't clear. Council chief executive Kath Ross told the Wairarapa Times-Age in July that the council would contribute $7 million, but information subsequently released to me by her office indicates the actual commitment will be $4.2 million, with an additional $2.75 million to be sought in the form of "grants, fees, charges and co-investment". Make of that what you will.)

The announcement of the Hood upgrade came out of the blue and makes sense only when seen as an enticement to vote Labour. In other words, it’s a prime example of the old-fashioned pork-barrel politics most of us thought had been consigned to history decades ago.

The entire process behind the government’s decision to fund the upgrade, and the buy-in by the district council, has been strikingly opaque. It’s not clear where the initiative came from and no substantive business case or cost-benefit analysis has been made public. The probable reason is that none exists.  

Masterton ratepayers have seen nothing to indicate the upgraded aerodrome will generate an economic return and thus justify the investment of ratepayers’ money that might be better spent on other services or facilities. As I pointed out on this blog in July, not one of the various cheerleaders for the project – neither McAnulty, Grant Robertson (who announced it), Ron Mark nor Masterton mayor Lyn Patterson – has identified a single new user of the upgraded aerodrome.

Scheduled air services in and out of Masterton have been tried twice in the past 20 years. In both cases they were abandoned because they made no money.

In an attempt to establish the economic rationale (assuming there is one) behind the Hood project, I twice sought information from Masterton District Council under the Local Government Official Information and Meetings Act. The responses added little to what was already known, reinforcing my suspicion that both the government and council have committed public money to the upgrade based on airy assumptions that are not backed by any substantive business case.

Among other things, the council provided me (but only after I approached them a second time, after a totally inadequate response to my first request) with a poorly written “executive summary”, of anonymous authorship, that was heavy on positive-sounding buzzwords but had all the substance of candy floss.

The documents fail to reveal who will use the improved aerodrome/airport or where the projected financial returns, assuming there are any, will come from. The projections rely heavily on the hope that scheduled air services will resume – but there’s no indication that any airline is eagerly waiting for Hood to be improved, and nothing to suggest that upgrading the aerodrome will magically make it profitable.

Perhaps most disturbingly, there’s nothing to indicate that Masterton district councillors subjected the project to any rigorous analysis or even detailed discussion. No minutes, no formal resolutions: zilch.

I can only repeat what I wrote on this blog on July 20: in the absence of any compelling case for the upgrade, we’re left with no other conclusion than that it’s a brazen vote-buying exercise - one that Masterton ratepayers have been suckered into subsidising by a council that displays little regard for responsible financial stewardship and even less for transparency.

The latest on that aerodrome spending spree - and it's not encouraging

Today’s Wairarapa Times-Age confirms that the people of Masterton will pay twice for an airport that no airline wants to use.

As taxpayers, they will pick up a share of the $10 million government tab for the Hood Aerodrome upgrading announced amid much fanfare last week by Finance Minister Grant Robertson.

But they’ll be hit as ratepayers too, because the Times-Age reveals that the other $7 million for the project will come from Masterton District Council. The source of this additional funding was mysteriously unidentified in last week’s announcement but has now been confirmed by MDC chief executive Kath Ross.

According to Ross, the project will “transform Hood from a community airfield, supporting recreational pilots and a select group of commercial operators, to a centre for cutting-edge commercial activity, manufacturing and training, alongside existing and new tourism attractions and businesses.

“This work will open the door to some exciting opportunities for future business development.”

This is a statement heavy on pie-in-the-sky wishful thinking and empty PR clichés (“cutting-edge”, “exciting opportunities”). Not one of the cheerleaders for the project – Ross, Robertson, Masterton mayor Lyn Patterson and local MPs Ron Mark and Kieran McAnulty – has identified a single new user of the upgraded aerodrome.

On the contrary, the one regional airline named as being potentially “interested” in flying out of Hood has cast fresh doubt on the viability of the plan. The Times-Age reports that Doug Emeny, general manager of Air Chathams, said the airline had to be persuaded to submit a business case to the council last year.

“You know it’s getting hard when they come to you and say, ‘Can you please put an application in?’

“We thought about it and decided ‘Yes, we will’. But in all honesty, we limped into it. We weren’t overly impressed with the research that had gone on into what service there would be.”

It’s hard to imagine more damning words from the man running an airline identified as a key prospective user. In fact I'd suggest that on the basis of what we know so far, the project looks a complete dog.

Masterton District Council’s media statement on the Hood upgrade reinforces the impression that the government and the council are taking a massive punt. There’s more hollow PR blah-blah from both Patterson (“The funding for Hood Aerodrome will enable us to transform this treasured asset into a modern, functional airport with increased capacity over the longer-term”) and Ross (“We have a dedicated team that have worked hard over a significant period to fine-tune the future focus for Hood Aerodrome”), but not a single hard fact – and no mention anywhere of a business case to support spending $17 million at a time of enormous pressure on government and council finances.

Astonishingly, the council’s media statement last week avoided any mention of the millions that Masterton ratepayers will contribute to this potential white elephant. So much for transparency.

When the Hood announcement came out of the blue, I wondered whether I had missed something. I couldn’t believe the government and council could so airily commit $17 million to a project with no assured benefits other than the creation of 53 short-term construction jobs. In the absence of any compelling case for the upgrade, we’re left with no other conclusion than that it’s a brazen vote-buying exercise.

Resounding vindication of Hood job creation scheme

The Dominion Post reported today that regional airline Air Chathams would be “interested” in establishing a regular link out of Masterton once $10 million of public money has been spent upgrading the town’s Hood aerodrome.

Wow. If the government wanted a ringing vindication of its plan, there it is, right there.

The story was a follow-up to one in the Wairarapa Times-Age (which I covered in a sceptical blog post yesterday) announcing the proposed investment of $17 million – $10 million from the government and the remainder from a mysterious source so far undisclosed – in a project that would see Hood's runway lengthened and widened, along with improvements to other aerodrome infrastructure.

My scepticism didn’t relate to the actual construction project, which I’m sure will proceed, but to the promised benefits, which seem as substantial as a wisp of smoke.

I pointed out that previous attempts to run scheduled services out of Hood had failed and no one seemed in any hurry to try again, regardless of whether the airport was improved. Well, we now have Air Chathams general manager Duane Emeny saying his company would be “interested” once the job is done – but that’s hardly an emphatic commitment, so we’re left with the prospect that Masterton will end up with a flash new airport with no more users than it has now (most of whom, judging by my own admittedly limited observations, seem to be recreational fliers and topdressing planes).

What’s more, Emeny pointed out that because starting a new regional air service was not without risk, Air Chathams would seek a “significant support package” to underwrite potential losses. So as well as stumping up for the airport upgrade, the taxpayer would be expected to subsidise whichever operator, if any, is prepared to use it - at least until such time as it's proven (again) to be uneconomic.

Pardon me, but am I missing something here? Finance Minister Grant Robertson says the project will transform Hood into a “modern, functional airport, with capacity for growth beyond its current activity” – but where will the users come from? Has anyone undertaken any research into potential demand, or is the government simply taking a punt and hoping for the best?

Alternatively, should the good people of Wairarapa, once the upgrade is complete, expect instructions to concentrate very hard and by sheer force of collective will, wait for planes laden with tourists to appear magically over the horizon? It almost looks that way.

Failing that improbable outcome, the project looks suspiciously like an extravagant job creation scheme – but one with potential side-benefits for Labour in an electorate that the party has held before and would love to win again.

Fairy dust spotted falling over Hood Aerodrome

A story on the front page of today’s Wairarapa Times-Age announced that the government will spend $10 million improving Masterton’s Hood Aerodrome. An obvious, if inconvenient, question immediately arises: Why?

Sound economic initiatives in the Wairarapa deserve to be applauded, but it’s hard to see any benefit in upgrading an aerodrome that no airlines use. Scheduled services in and out of Masterton have been tried twice since I moved to the town, first by the now-defunct Air Wairarapa in 2002 and later by the Air New Zealand subsidiary Eagle Airways from 2009 till 2014. Both were abandoned because they made no money, and I’m not aware of any evidence that suggests upgrading the aerodrome will magically increase demand or make flights to Masterton profitable.

Certainly there was no suggestion in this morning’s story that Air New Zealand or any regional operator is eagerly waiting to provide a service once Hood’s infrastructure is upgraded. The only regular user quoted in the Times-Age was the Life Flight trust, which operates air ambulances from the aerodrome. Life Flight’s chief executive welcomed the announcement, saying the weather in Masterton was often a challenge (Really? To pilots who constantly fly in and out of Wellington?) and the length and width of the runway could be “a little bit of a challenge as well”.

That hardly sounds like adequate justification for committing $10 million of taxpayers’ money to widening and extending the runway (which will involve buying more land and re-aligning the adjacent road), upgrading lighting, improving effluent, water and power on site and funding improved security. It rather looked to me as if the Life Flight CEO was roped in because they needed someone to make positive noises about an announcement that otherwise didn’t make a lot of sense.

Alternatively, I wondered whether the Times-Age might have inadvertently omitted a vital paragraph explaining why all this investment was justified. Perhaps that missing paragraph referred to an imminent announcement that Air New Zealand ATR 72s bulging with tourists will be flying into Masterton as soon the project is completed.

Then again, this act of regional boosterism may be primarily about creating jobs for people put out of work by the coronavirus. That seemed to be the focus of Finance Minister Grant Robertson’s speech, in which he talked of the 53 construction jobs that would be created and airily speculated about the prospect of 200 employment opportunities once the airport was fully operational. The government went looking for projects that were ready to go, Robertson was quoted as saying, and this one ticked all the boxes.

There seem to be a lot of wildly optimistic assumptions built into his prediction and I wondered whether a rigorous business case had been prepared. If there was one, I could find no mention of it on Robertson’s website; in fact no mention of Hood Aerodrome at all.

Naturally there were other people on hand yesterday to applaud Robertson’s announcement. Wairarapa-based New Zealand First MP and cabinet minister Ron Mark said the proposed upgrade would improve viability for a commercial airline – something he had advocated since he was mayor of nearby Carterton. “We’re back in a good space again,” Mark was quoted as saying. “What I’m really keen to see is an airline recommence flights from Masterton to Auckland.”

This falls somewhat short of a cast-iron assurance that the taxpayer’s investment will pay dividends. A couple of phrases come to mind. One is wishful thinking; the other relates to carts and horses. Or perhaps Mark is placing his faith in the famous line from the movie Field of Dreams: “If you build it, [they] will come.” There’s something distinctly cargo-cultish about the expectation that if only you throw sufficient quantities of money at something, providence will reward you.  

Labour list MP Kieran McAnulty, who lives in Masterton, lined up to claim his share of the credit for the announcement too, proudly declaring that his proximity to ministers as the party’s junior whip meant he was able to promote awareness of key local projects and arrange meetings with influential Wairarapa figures such as former Masterton mayor Bob Francis and veteran government trouble-shooter Dame Margaret Bazley.

Not mentioned in the story was that both Mark and McAnulty are standing for the Wairarapa seat in the general election and both fancy their chances, especially since sitting National MP Alastair Scott is standing down after two undistinguished terms and the man hoping to replace him, local farmer Mike Butterick, has virtually no profile.

Join the dots and you get a distinct whiff of unashamed, old-fashioned pork-barrel politics. The only name missing is Shane Jones, and that’s presumably because he’s busy promoting the New Zealand First Survival Slush Fund – sorry, the Provincial Growth Fund – in Northland.