Inquiry into the sale of Paraparaumu Aerodrome by the Ministry of Transport.

Appendix 1: Terms of Reference

Paraparaumu Aerodrome Inquiry: Terms of Reference

The Report of the Transport and Industrial Relations Committee (“the select committee”) on Petition 1999/231 of Ross Sutherland and 584 others (May 2004) recommended, among other matters, that “the Government hold an inquiry into the sale process of Paraparaumu Airport in 1995”. On 19 October 2004 the Minister of Transport invited the Controller and Auditor-General to undertake the inquiry. The Auditor-General has accepted the Minister’s invitation.

The Auditor-General has noted that other matters addressed in the select committee’s report and recommendations are being considered by the Ministry of Transport and other officials – including work on the identification of the strategic value of airport and aerodrome facilities and the review of the Public Works Act 1981. Accordingly, the Auditor-General will limit his inquiry to the sale process, in accordance with the select committee’s recommendation and the Minister’s invitation.

Matters to be examined

The Auditor-General will examine the following matters concerning the sale, under sections 16(1)(a) and (d) and 18 of the Public Audit Act 2001:

1. What were the Government’s policy objectives in relation to the sale, as expressed in Cabinet minutes or Ministerial and any other relevant directives? Matters to be considered will include:

a. whether the Government intended that the aerodrome should remain operational following the sale and, if so, why; and

b. how the rights and interests of former owners of aerodrome land (including Māori) were to be addressed.

2. Was the sale process designed, and documentation prepared, in accordance with:

a. good practice as it applied at the time; and b. the Government’s policy objectives?

Aspects of good practice to be considered under paragraph (a) will include:

  • the means used to achieve the sale (involving the formation of a company followed by the sale of the Crown’s shares in it);
  • consultation with affected parties, including former owners of aerodrome land;
  • the tendering process, the evaluation of tenders, and any subsequent negotiations with prospective purchasers;
  • standards of probity, including in respect of the identification and management of conflicts of interest; and
  • standards of record keeping.

3. Was the sale process undertaken:

a. in accordance with good practice as it applied at the time; and

b. in a manner that would have been likely to meet the Government’s policy objectives?

The Auditor-General will report to the House of Representatives on the above terms of reference, on lessons that can be learned, and on any other matter arising from the inquiry that he considers it necessary or desirable to report on.

Matters excluded from the inquiry

The issues of public concern in respect of Paraparaumu Aerodrome are complex and long standing. The Auditor-General has not been invited, and nor is it appropriate for him, to address all of those issues. Also, the Auditor-General is not able to exercise judicial functions in respect of legal rights and obligations. Accordingly, the inquiry will not address:

a. whether, as a matter of law, the Crown or any other person has at any time complied with its legal obligations in respect of the offering back of any aerodrome land to previous owners under section 40 of the Public Works Act 1981;

b. whether, as a matter of law or otherwise, the Crown has at any time met its obligations under the Treaty of Waitangi in respect of former Māori owners of any aerodrome land;

c. any matter relating to the zoning of the aerodrome land under the Resource Management Act 1991, or the actions of any person in consequence of any zoning decision;

d. the significance of Paraparaumu aerodrome in aviation terms, or the performance of Paraparaumu Airport Limited in maintaining it for aviation use; or

e. the adequacy of legislation in respect of airports, or of government policy (at any time) on the significance of aerodromes or their role in aviation infrastructure.

4 April 2005

Appendix 2: Extract from letter to Treaty claimants, 14 May 1993

The Government … has now decided that the Ministry of Transport should offer the aerodromes, including Paraparaumu, for sale to the current aerodrome users and/or nearby international airports and/or local authorities. However, before disposing of the aerodrome the Ministry of Transport must fulfil the Crown’s obligations under the Public Works Act and the Treaty of Waitangi.

Development of disposal options for disposing of the aerodrome has been difficult because the majority, if not all of the aerodrome land is subject to the Public Works Act, which requires any land that is no longer required by the Crown for public works to first be offered back to its former owners prior to any sale on the open market.

Acceptance by the former owners of the offer back under the Public Works Act may have led to closure of the aerodrome, and the loss of a worthwhile aviation facility.

In order to allow the aerodrome to remain operational, the Government has decided that the aerodrome will be formed into an airport company which will then be sold. The Airport Authorities Act allows for land to be transferred to an airport company without requiring the land to first be offered back to the former owners. However, if the airport company should later wish to sell land at Paraparaumu which it no longer requires for aerodrome purposes, it will be required to offer the land back to the former owners in accordance with the Public Works Act.

In recognition of the Crown’s Treaty of Waitangi obligation of good faith, the Ministry of Transport seeks the comments of the iwi and hapu that may be affected by the proposal for the sale of Paraparaumu aerodrome, before inviting any tenders. If you have any concerns about the proposed timetable or you wish us to provide you with further information, please contact me without delay.

Any submissions you wish to make should be forwarded to the Ministry of Transport by 1 July 1993, but as a first step we would be grateful if you could indicate before the end of May whether or not you wish to comment.

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