The Honourable Eugenie Sage
10 July 2020
Re: Government endorsement of Kapiti Island ‘Gateway’ proposal
I write concerning your endorsement of the Kapiti Gateway Project. This project will provide a transit bio-security facility for visitors to Kapiti Island. Kapiti Coast District Council is seeking Provincial Growth Fund funding on the basis that it will create jobs and grow the economy. It has a ballpark cost estimate of $4.46 million¹. The economic growth will be driven by a purported increase in island visitor numbers soaring to 58,000 per annum.
Your endorsement was seen by the proponents as pivotal, particularly in light of the project not reaching break-even for 6 years. At the Council meeting of 28 May the Mayor emphasised the importance of your support in getting PGF funding. Outlined here are the areas of concern.
Government and the business case
- Encouraging a “Loss leader”
KCDC identified early on the almost insurmountable problems with trying to prove there was a legitimate business case to put up to the PGF. All of this was redacted when it came to filing the application, but should have been equally apparent to any competent Government advisor. Two memo’s put it succinctly:
- “The business case is a toughie, because from the Council’s perspective, it is a long-term “loss-leader”.
- “The difficult thing is justifying the expense. Not just the infrastructure but the ongoing costs. Council will have to fund the depreciation, the running costs and maintenance. That cannot be justified without a serious step change in the growth of visitors…. Without growth of this kind the Gateway could remain nice to have- which is likely to be judged as unaffordable in these times”.
Your perceived endorsement of encouraging visitor numbers to Kapiti Island to increase 300% enabled KCDC to present a business case that the project was feasible. Upon what statutory power or other ground did you exercise your decision to support this project identified as, a long-term “loss-leader”?
2. Government encourages PGF to fund projects requiring substantial Ratepayer subsidy
As a Cabinet member your support of this particular project indicates the Government considers projects that need ratepayers subsidy as meeting the PGF’s business case requirements. The details are in Annexure 1. KCDC’s documents show, even on a “best case” scenario the Gateway will not be self- funding for at least 6 years — 6 years of ratepayer subsidy.
3. 5 real jobs lost and 2 ticket issuer jobs gained
There are 2 boat operators. One operator, Eco (who carried over 6,000 of 15,000 passengers last year) supports a Gateway but opposes the Mayor’s ‘Taj Mahal’. The cost of using the bio security building will be $21 per passenger. Eco has said the extra $21 fee for using the checking room will kill his company as Eco’s customers will not be able to afford this in addition to the boat ticket price.
4. Phantom economic benefits to Kapiti²
You letter implicitly supports the argument there is a major economic benefit to the Kapiti Coast. Despite the fact that the Paraparaumu Beach Business Association, the alleged beneficiaries, are entirely against this particular project.
Please supply the economic studies and data you have that justified your opposing the facts as seen by the business community you project as being the beneficiaries of the project. Your Mr Mace will know these include moteliers, B&B owners, café owners and a Kapiti Island tourism operator. They really want to know what you know that they apparently, despite years of hands-on experience, do not.
Increased bio-security safety
You say the project will increase bio-security. How can that be, when for 35 years the current system has worked perfectly, without a single breach? How more perfect can bio-security be than 100%? You avow “Current biosecurity activities are unlikely to be sufficient to fully protect the island from future biosecurity risks…”.
Please supply the information upon which you relied to support this pivotal contention.
Matters you may not have known — relevant to a change of decision
Proceeding on the assumption the Government is concerned that the citizens in the “team of 5 million” get equal and fair treatment, and the total denial to interested team members of their pre-existing (prior to Covid-19) rights, you are requested to reconsider your support for the project, taking into account these relevant factors.
Consultation on this specific project
The KCDC report at paragraph 68 says, “Neighbouring residents of the site, contacted in earlier stages of the project …”. This is incorrect. The 5 homeowners / property owners directly affected have made written statements saying they were never contacted.
- DOC supporting loss of open space on Reserve land — favours food and beverage outlets.
Not only is the main building a commercial activity building you, as Minister are supporting 2 pods (Containers) for commercial use providing food and beverage.
These further reducie open space on reserve land. This runs counter to the principles in the Reserves Act which you administer. S.3 specifies that reserve land is to be preserved and managed “ for the benefit and enjoyment of the public”. Where access is subject to a fee, that excludes all non -paying members of the public. Reserve land is for free public access.
I look forward to your urgent reply.
C.B. Ruthe LLB
1. KCDC is providing the land and the ongoing expenses. None will be met by either DOC, or the boat companies using the facility.
2. The economic benefit case KCDC relies on is predicated on “40% of visitors to Kapiti Island staying a night and if every person paid $200 a night (that is $400.00 for a couple). That is $1.2 million back into the local economy, p.a.”. A search on the Internet reveals there is no visitor accommodation at Paraparaumu Beach costing $400 per night for a couple: the range is $125–$150.