The $20.2m development of the airport’s terminal will finish in October 2020. Image: HBAL
Hawke’s Bay Airport’s local and central government shareholders will provide $9m in funding for the completion of development work on the terminal.
The Government, which owns 50% of operator Hawke’s Bay Airport Limited, said it would provide a $4.5m, two-year loan “on commercial terms”. The money would come from the $50bn Covid-19 Response and Recovery Fund.
Napier City Council and Hastings District Council, which owned 26% and 24% respectively, would provide the other $4.5m.
The costs of the loans were not disclosed in a joint statement today from deputy prime minister and minister for state-owned enterprises Winston Peters and finance minister Grant Robertson.
The $20.2m development of the airport’s terminal would increase its size from 2500 sq m to 3800 sq m. It was expected to be finished in October 2020.
“It’s important that we retain an important regional asset that will enable the Hawke’s Bay to stay connected and support the recovery of the domestic tourism and aviation sectors,” Peters said.
“Hawke’s Bay Airport experienced a significant drop in revenue due to Covid-19. The request was made to shareholders to provide financial support to ensure the airport remained viable and to allow completion of the terminal redevelopment, an important part of the airport expansion project, which was started before the onset of Covid-19.”
Robertson said the Government was the major shareholder and it was “appropriate for the Crown to provide a loan to support cashflow”.
“This ensures the terminal redevelopment can proceed, protecting up to 200 jobs including those of contractors already working on the project,” Robertson said.
“As a Government, we support investments that will help our regions and local economies to continue their recovery and to rebuild.”
The Government said the loan was considered fiscally neutral and there would be “no impact on net core Crown debt over the period of the loan”. The capital expenditure associated with the appropriation would not impact the Covid-19 Response and Recovery Fund.
10 Aug 2020 Far North tourist hotspots secure $9m funding