Bob Parker’s campaign launch The cost sharing agreement between the Government and the council was finalised today. In a rather jovial meeting, Gerry, John and Bob divided up the pie and told us all what it’s going to cost. The Press has a very comprehensive summary of all the items and what is going to be paid for them. Of the $4.8 billion, central government is paying $2.9 billion, with the council taking the remaining $1.9 billion. All the joking around from Parker is meant to give the impression that the council got a good deal, thanks to the tough negotiating style of our mayor.

 

Someone even more cynical than me has written this for the NBR. The figures break down like this:

A detailed breakdown of the rebuild cost reveals the lion’s share of the money will be for work already under way on pipes and roads – a total of $2.9 billion, with $1.8 billion the best estimate of the Crown’s likely contribution, and $1.1 billion as the council’s share.

This is where most of the money goes – but the Crown isn’t doing it out of altruism. The cost sharing on the horizontal infrastructure was something agreed to between the government and any council (Crown pays 83 percent for roading, 60 percent for sewerage). It’s the following sentence which talks about the CBD spending which is interesting:

The balance will see the Crown fund $1.1 billion of projects in the central business district and the council $765 million.

 $1100 million to the Crown, $765 million to the council. So what is the Crown spending most of that money on? $481 million for the Frame i.e. land banking. Is it really legit for the government to include this money, as though it is an investment? I’ve railed against the frame since practically when it was announced, but this isn’t even about the stupidity of the idea. This is money that is going to be spent on property that the Crown is going to flick on quicklythey’ve already started the process. I think it’s pretty dishonest for the government to use a bookkeeping trick to make it look like they are spending more than they are. This is not $481 million being invested in an asset – it’s money going out of one account but coming back into another. If you take that figure out, the Crown’s contribution is actually more like $620 million – quite a bit less than the amount being asked of ratepayers.

Of that $620 million, the next largest single item is the Convention Centre, which is likely to go to a Public-Private Partnership (PPP), which could mean anything…

The Crown will lead the convention centre rebuild. It is hoping to secure private sector investment but has allocated $284m to the precinct.

While they are “hoping” to find a friend to come on board, it’s worth comparing it with the Sky City convention centre. That project is meant to cost $402 million, which breaks down to $315 million for the building, $87 million for the land. The Auckland one is meant to hold up to 3500 delegates, whilst the Christchurch one is meant to be around 2000. So a little more than half the number of delegates, but for a comparable price? ($284m vs $315m) The council was budgeting just $151 million for the Convention Centre – so getting an efficient PPP set up somehow means it’s going to cost an additional $130 million? Something smells fishy there.

If you take out the Frame and the Convention Centre, the amount the government is paying for projects that it is forcing on the people of Christchurch is actually pretty pitiful.

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