Why does the council retain ownership ?

The Council has an interest in ensuring that the region’s strategic assets are operated in a commercial manner, but also in a way that is beneficial for the region as a whole. Through Statements of Intent, the Council is able to establish broad parameters reflecting the public nature of these assets, but without inhibiting proper commercial management.

CCHL remains committed to the ownership and monitoring role entrusted to it by its shareholder, Christchurch City Council. Reasons for retaining ownership of the city’s key infrastructure assets include:

• diversification of the City’s income stream and reduction of the rates burden;
• local control of key strategic assets;
• capturing the value of the capital growth of the infrastructure companies for the benefit of future generations;
• recognition of community interests; and
• the application of good governance to the city’s commercial assets.

From a financial perspective, over $770 million of capital and dividend payments have been made to the Council, enabling it to make further major investments in community assets, such as the Art Gallery, without a significant impact on rates.

The income stream from the CCHL group companies enables CCHL to pay dividends to the Council of around $38 million a year, hence diversifying the Council’s income and helping reduce rates by more than 15% a year.

When CCHL was first set up in 1993, the value of its assets was $170 million. With the subsequent addition of the airport and port a couple of years later, the value came close to $400 million. Today, the group owns assets with a combined value of $2.2 billion.

The CCHL group companies have generated average shareholder returns for the ratepayers, including capital growth, of 18% per annum since 1995. This combination of cash flows and growth in value has significantly contributed to the wealth of the city – if the trading companies had been sold off earlier, as was done by many other councils in New Zealand, much of this income and growth may have left this region.