Plans for new Central Otago airport on hold

Christchurch Airport has hit pause on its proposed international airport in Central Otago.

In July 2020, it was revealed Christchurch Airport had bought 750 hectares of farmland in Tarras with the hope of building a more than 2km-long runway to support flights to Australia, the South Pacific and Southeast Asia.

But in a letter sent to Christchurch city councillors last night, Christchurch City Holdings (CCHL) chair Abby Foote said the airport's board had decided to slow down further work on the plan.

"In recent weeks, CCHL has actively engaged with the Board and Management of CIAL [Christchurch International Airport Limited] on the Central Otago project. In particular, we have emphasised the capital constraints the CCHL Group is facing following Council's decision in December 2023," Foote said.

"On Monday, the CIAL Board made a decision to slow down any further work on the Central Otago project. That decision is confirmed in the attached letter CIAL have asked to be shared with Councillors.

"In taking the time to reflect on the substantial work done to date - largely focused on proving the aeronautical viability of the land acquired in Tarras, along with potential changes to the national infrastructure planning, funding and delivery frameworks signalled by the new government - the CIAL Board has signalled that a more cautious approach is warranted.

"Taking additional time will also enable further consideration of the emphasis on sustainable tourism that has been clearly expressed at a regional level in recent months."

The Tarras airport proposal faced strong opposition from locals, with one group promising to fight it all the way to the Environment Court.

Christchurch Airport had long pressed the need for further air transport infrastructure for the South Island with Queenstown Airport becoming increasingly constrained.

"In the longer term, the problem of resilience, sustainable transport, and infrastructure capacity for Te Waipounamu ... that our Central Otago project seeks to resolve will remain," a letter from Christchurch Airport chief executive Justin Watson and chair Sarah Ottrey to Christchurch City Holdings Limited said.

"The exploratory work we have done to date gives confidence that this opportunity with its core purpose being to facilitate sustainable aviation and protect long term dividend flows and value growth for Christchurch also remains.

"Along with the financial challenges the City faces, the change in government means a change in a number of key areas that interplay with the project such as the Government's repeal of the Resource Management Act, the development of the National Infrastructure Resilience Plan, Three Waters legislative repeal, the focus on sustainable growth in tourism and next steps on funding and financing for Local Government and the Tourism sector.

"Along with this we continue to listen and onboard the feedback from the local region, which, as expected, contains a range of views including understanding what the best regional solution may be."

In a statement from Christchurch City Holdings, acting chief executive Paul Silk said it did not expect significant investment to be committed to further investigating the Tarras proposal in the short-term.

All CCHL subsidiary companies were operating under tighter capital constraints as the group committed to improving dividend payments to council and paying down debt, the statement said.

"As the majority shareholder, we appreciate there are a wide range of views on the Central Otago project," Silk said.

"We support CIAL undertaking long-term strategic work on issues around regional tourism, economic growth and the future of sustainable aviation right across Te Waipounamu. This includes an expectation that they will continue to engage effectively with local communities."

"With substantial work now completed on the Central Otago site, we will focus our work with CIAL on other opportunities that exist to deliver the strong returns required to support the objectives of the wider CCHL Group, Council and Christchurch ratepayers."

Christchurch city councillor Yani Johanson said it was the right move.

"I think it makes a lot of sense to take stock of this project. This is a project that council has expressed its concern over both the environmental impacts and the economic impacts.

"From a cost point of view it's a massive undertaking at a time when council is incredibly financially constrained. We've just gone out to the community with a cumulative rates increase of about 53 percent over the next 10 years.

"Clearly there's urgent priorities we're facing as a city, and an international airport in Tarras is probably the least of the things we need to focus on at the moment. We have aging infrastructure."

Community group Sustainable Tarras, which had been fighting against the proposal, welcomed the news. Spokesperson Duncan Kenderdine said while he was pleased to hear it was being paused, he was suspicious that the proposal would still go ahead at some point.

"On one hand we are a little sceptical about what we read - it doesn't say 'we are stopping work on the Tarras airport'. And we know there are people whose job titles are associated with working on Tarras airport and we haven't seen those people be reallocated or removed. So clearly money will continue to be spent.

"As we've said for a long time, the lack of transparency around this whole project, the lack of a business case, the strange idea to spend billions of New Zealand's infrastructure dollars on an airport when in the South Island you have Christchurch, Dunedin and Invercargill airports with significant spare capacity, has always seemed a little nonsensical to us - let alone the impacts on the local environment and climate change."