By Moana Ellis, Local Democracy Reporting
A Whanganui District Council committee has backed the scope of an independent review into the region’s failed flight school.
In March, the council reported an estimated $11 million loss from the failed investment in the New Zealand International Commercial Pilot Academy (NZICPA).
A report presented to the CCO (council-controlled organisation) & Economic Growth committee this week said the aim was to identify where processes, judgement or controls may have been insufficient or ineffective.
“While the review cannot reverse the financial impact of council’s investment in NZICPA, it will provide council and the community with a clear, independent and evidence-based account of what occurred and why,” the report said.
After the meeting, Whanganui Mayor Andrew Tripe said the council recognised strong community concern and expectations of accountability.
“While this started well over a decade ago, our responsibility now is to make sure there is a clear, independent account of what happened, and that we apply the lessons to protect ratepayers in the future.”
The proposed review will examine governance, decision-making and advice across the venture’s 11-year history, including key decisions that increased the council’s financial exposure and the oversight arrangements surrounding them.
The council is the sole NZICPA shareholder. The flight school is overseen by the council’s commercial arm, Whanganui District Council Holdings Ltd (WDCHL).
The flight school was established in 2015 to stimulate local economic activity, create jobs, attract international students, and increase aviation activity at Whanganui Airport.
But it was hit by a series of setbacks, including international border closures during Covid-19, the withdrawal of Provincial Growth Fund support for a proposed Advanced Aviation Hub, the closure of a key building due to earthquake risk, and the temporary grounding of aircraft due to safety concerns by the Civil Aviation Authority in 2025.
The NZICPA will be closed by June 30. Ōamaru-based flight school New Zealand Aviation Academy Limited has expanded its aviation training operations into Whanganui.
Council chief financial officer Mike Fermor told the committee the review focus would be on “learning and improvement: strengthening how council governs and oversees major investments in the future”.
“At a very high level, the review will focus on the key decisions that were made through the various parties that materially increased council’s exposure to NZICPA, including the quality of information that those decisions relied upon and the context at the time of those decisions being made,” Fermor said.
The review will assess governance arrangements.
“Did they add to the decision-making or were they an impediment to the decision-making?” Fermor said.
The report said expanding the scope to assign individual responsibility would significantly increase cost and complexity and could lead into legal processes.
“That approach would be a different exercise, requiring a higher level of resourcing, and would not necessarily provide clearer insight into how council can strengthen future decision-making and oversight,” it said.
Fermor said the reviewer would not have statutory powers to compel evidence.
“We are relying on people’s co-operation for this review.”
The cost is expected to be between $50,000 and $100,000, with the final budget to be set following procurement.
“Given the scale and impact of the matters under review, this is considered an important further investment to ensure lessons learned can genuinely inform and improve future outcomes for council and the community,” the report said.
‘We need to get answers’
Councillor Rob Vinsen queried the cost, but Mayor Tripe said he did not want the review to be compromised by budget constraints.
“This project does span 11 years. We need to get the answers. I don’t want to see any shortcuts.
“We need to do the right thing to protect current and future ratepayers from any decisions that might be unwise.”
Councillor Charlotte Melser asked if the scope was broad enough to assess how operational decisions may have contributed to the situation.
Fermor said it could be expanded in discussion with the reviewer.
But chief executive Doug Tate said: “It’s a review, not an inquiry.”
Councillor Julie Herewini said accountability ultimately rested with the council.
“The key points are understanding the original business case, the decisions that were made in order to invest in the process, and the decisions along the way based on where that business case varied and was no longer viable any more.
“We must learn from mistakes, adjust governance processes and make sure we’re making informed decisions.”
Final approval of the terms of reference is due at a full council meeting on May 5. If adopted, an independent reviewer will be appointed, with findings expected within six to eight weeks and released publicly.
Awa FM – Te Reo Irirangi o Whanganui
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