Part 1: Introduction

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

What is this report about?

This is the report of our inquiry into the sale of the Crown-owned Paraparaumu Aerodrome (the aerodrome) in 1995. The government department responsible for the sale was the Ministry of Transport (the Ministry).

The Crown’s objective at the time of sale was to sell the aerodrome to someone who would continue to operate the facility for as long as it remained commercially viable. But no condition to that effect was imposed on the purchaser. It also appeared at the time of the sale that significant parts of the aerodrome land could be surplus to operational requirements. The purchaser has realised a number of land sales since 1995. This has caused anxiety among aerodrome users (including aero and gliding clubs) about the aerodrome’s future.

Why an inquiry now?

The sale took place a decade ago. The outcome of the sale was hotly contested at the time. It was the subject of 2 challenges in the courts.

In 2002, a group of users presented a petition to the House of Representatives requesting “that Parliament legislate to safeguard the long-term viability of Paraparaumu Airport as a full operational facility”.

In May 2004, the Transport and Industrial Relations Committee (the Select Committee) presented a report to the House on an inquiry into the petition. The report recommended legislative changes to the Airport Authorities Act 1966 and the Public Works Act 1981, to address issues of concern arising from the sale. It also recommended that the Government hold an inquiry into the sale process.

In October 2004, the Minister of Transport invited the Controller and Auditor- General to conduct an inquiry. The Chairperson of the Select Committee confirmed that the Committee welcomed that decision. On this basis, the Auditor-General decided to conduct an inquiry under sections 16 and 18 of the Public Audit Act 2001.

The terms of reference for the inquiry are reproduced in Appendix 1. We consulted extensively over them.

Some parties encouraged us to include in the inquiry not only the sale process, but also events subsequent to the sale – including the role of the Kapiti Coast District Council in approving zoning changes to enable sales of aerodrome land to proceed, and the performance of Paraparaumu Airport Limited in maintaining the aerodrome as an operational facility.

After making preliminary inquiries, we decided that there was no basis for an inquiry into those matters. Accordingly, this report covers only the actions of the Ministry from the time of the first direction to sell the aerodrome until the completion of the sale and purchase agreement. That scope is consistent with the Select Committee’s recommendation and the Minister’s invitation.

What we did

We reviewed the Ministry’s files. They had been reviewed several times before – most notably for the purpose of the court proceedings and the Select Committee inquiry.

We also reviewed the pleadings for the second court challenge. This was an application for judicial review in the High Court. The case never proceeded to trial, but substantial amounts of evidence were gathered during the interlocutory stages.

We then interviewed a number of people who had been involved in, or affected by, the sale process. We spoke to a former Minister of Transport, who had been Minister at the time of the sale. We interviewed 2 Ministry officials, a former consultant to the Ministry (the consultant), and a former partner of Ernst and Young (EY), the Ministry’s commercial advisers for the sale (the commercial adviser), about their recollections of particular events at the time of the sale.

We also interviewed a representative of a Māori group (which made the first court challenge to the sale) and 2 representatives of one of the unsuccessful tenderers (which made the second court challenge).

We took expert advice on the Crown’s obligations under the Treaty of Waitangi and the Ministry’s consultation with Māori interests about the sale.

We also commissioned an independent valuation of the aerodrome (as at 1995) to ascertain the reasonableness of the valuation used by the Ministry.

We circulated a copy of our report in draft to affected parties. We are grateful for their help and co-operation.

What is the focus of the report?

The nature and circumstances of this inquiry were unusual. Many views have been expressed publicly about the sale, over many years. It has been an issue that “will not go away”. We do not promise that our report will be the last word, or that it will make the controversy about the aerodrome “go away”. But we describe the sale process, and the events leading up to it, in a way that is consistent with the Ministry’s documents and the recollections of those involved. We hope that the report will give readers an understanding of what happened.

The focus of this report, then, is to:

  • provide a comprehensive narrative of the events;
  • discern what the Government’s intentions were as regards the sale, and examine whether, and if so how, the Ministry gave effect to them; and
  • identify lessons that can be learned.

We found the documentary record comprehensive in most parts, but lacking in others. We have tried to piece together the gaps through people’s recollections. But, after such a long time, it is not surprising that most recollections were hazy. The report needs to be read with this in mind.

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