Yesterday, National released hundreds of pages of documents on the SkyCity deal. They paint the picture of a government that locked itself politically into getting a deal and locked in SkyCity as the only option then was surprised when SkyCity screwed them for everything it could get. Even the far from bleeding hearts at Treasury said it wasn’t worth the cost.
Treasury told National the convention centre wasn’t going to be an economic boon and it wouldn’t attract many tourists; thy said that the benefits would go mainly to SkyCity’s private owners, with little public benefit; they pointed out there would be big social costs; they said that the compensation clause was nuts; and they pointed out that National’s weak bargaining position was at the core of the problem.
Here are the key paragraphs (thanks to Keith Ng, who took the scanned PDFs that National released and made them into searchable text – a great ‘fuck you’ to the Nats for trying to be arseholes and make using the documents difficult). Emphasis added:
Treasury is not convinced by the cost benefit analysis for the NZICC. For example, New Zealand already attracts a disproportionate share of the international conference market. In addition, international arrivals for conferences have plateaued since 2005, despite increases in the number of international travellers arriving in the country. Taken together with the international evidence on the low net public benefit of conference centres, these considerations lead Treasury to doubt that an expanded conference centre in Auckland will attract significantly more international conference attendees…
… Treasury is also concerned about the social costs to increasing gambling in Auckland, balanced against which are the potential benefits of the NZICC, paid for through the concessions. As soon as the cost of building the NZICC are recouped by SkyCity, public costs will go only to private gain. Given the poor information on the value of the concessions, Treasury has strong concerns that private benefits to SkyCity will exceed public benefits to New Zealanders…
… The provision of certainty to SkyCity through whatever mechanism, including a moratorium or “make whole” introduces a significant fiscal risk for Government. While Treasury accepts that make whole provisions for early variation or termination of the contract are necessary to safeguard the interests of both parties, they inevitably turn the project from one which was intended to have no direct fiscal cost to the Crown simple gambling concessions into one with a significant fiscal liability for the Crown. The nature of this contract then, is essentially unlike other Government projects such as ultrafast broadband in which the Crown was prepared to pay for the project from the start…
… Finally, Treasury is concerned that the Crown currently lacks adequate leverage in the negotiations, and proposes that, if SkyCity is not prepared to accept a contract based around the terms above, that Ministers seriously consider either reopening the bid for building the NZICC to other proposals or remove the uncertainty through the Crown funding the construction of the NZICC directly.
Powered by WPtouch Mobile Suite for WordPress