If CCHL is considering selling Enable – is it missing a few steps?

Recently an Australian business magazine printed a story under this headline “Macquarie Capital tapped to explore the NZ$1bn sale of Christchurch fibre-optic network”.

Here’s a potted history on this Enable Ltd…

• CCHL invested in the fibre optic system and established Enable as a separate company with assistance from Christchurch’s Sister City Seattle.
• The decision to establish Enable was to place the last plank in a portfolio of city owned assets to ensure that Christchurch had a “Ports Authority” to offer to, and to trade with, the world.
• The concept of a “Ports Authority” was never followed up by subsequent councils or CCHL boards.
• When Enable was established, it was added to the list of “Strategic Assets”, as defined by the Local Government Act.
• The reason CCC named Enable as a Strategic Asset was to protect this public investment from the sort of neo-liberal policies promoted by the Business Roundtable and its successors over the years. Christchurch proudly retained its trading assets, when most Councils sold theirs.

Questions of interest to the Ratepayers who currently own Enable

When I read the Australian article I wrote to Bryan Pearson, chair of CCHL, and asked if I could have a copy of the brief supplied to Macquarie. I received this reply:

Your request for a copy of the “brief” is declined. The information requested is withheld under section 7(2)(b)(ii) of LGOIMA to protect the commercial position of the person who supplied or who is the subject of the information. 

The brief contains commercially sensitive information relating to CCHL, Enable Networks, and third parties engaged as part of the review process. Disclosure of this information would be likely to result in unreasonable prejudice to CCHL’s commercial position, including prejudice to current and future negotiations and associated commercial activities.

In CCHL’s view the reasons for withholding these details are not outweighed by public interest considerations in section 7(1) that favour release. The public interest will be better served once the review has been completed, considered by the CCHL Board, and subsequent consultation with Christchurch City Council has occurred based on evidenced information.

Then underneath it stated:

“Christchurch City Holdings advised in its release of the 2026 Interim Report that it is undertaking an Ownership Review of Enable Networks. Further detail is available on page 5 of the report. CCHL has no further information to provide at this time.”

I found receiving an OIA response unusual as what could CCHL have to hide from this simple question. I wonder what “commercial sensitivities” there can be with a publicly owned asset. There were no surprises with the discussion about CCHL reviewing this asset. They told the elected councillors that they were having a hard look at Enable. I have personally discussed Enable with both the chair and CE of CCHL.

However, the OIA response caused me to wonder:

• Has CCHL taken steps in its letter of appointment to Macquarie that overstepped its authority as a board. If it hadn’t then it had nothing to worry about and should be openly telling the citizens of Christchurch what it expected of the appointed consultants.
• If the brief was to inform the board of changes in the tech market where Enable trades, or who could be potential long-term partners, then great tell us that is what they asked.
• in a recent meeting with Councillors, Bryan Pearson said that the board was bound to comply with the Companies Act. This is only partially correct. The board is also bound by the Local Government Act (LGA). This Act defines “Strategic Assets”, which covers Enable, and the policy toward Strategic Assets has been clearly set out by the Christchurch City Council in compliance with the LGA. Has this process been followed?
• Under the LGA CCHL is an instrument of, and directly accountable to, the CCC Council. Under the LGA the board is required to meet with the full Council and give the elected members all their technical and financial data before they approach any firm to ascertain a potential sales price. Before Macquarie were appointed had the CCHL board totally briefed our elected reps?
• Are we observing a loss of institutional memory?
• Could our elected reps face a CCHL board determined to hand a “take-it-or-leave-it” situation, without the board complying with the Local Government Act and existing CCC policy?
• We must avoid a situation that the CCHL board, and our elected reps, become hypnotised by the potential value of an asset for sale and move directly to how they could spend the proceeds. Existing policy and the LGA define the necessary steps for both CCHL and CCC elected reps to follow. I set these steps out below.
• Have our elected reps had a chance to seek questions about the process being undertaken. Were councillors informed of the intention, and purpose, of the CCHL Board to appoint Macquarie?

To sell a Strategic Asset on the CCC assets schedule here’s existing policy:

A. Deciding on significance of the asset sale – CCC existing policy requires Council to follow a three-step process to inform decision-making:

1. Determine significance – the Council will use agreed criteria to decide if a matter is of higher or lower significance.
2. Link level of significance to level of engagement – the level of significance will link to a corresponding level of engagement to be undertaken.
3. Consider methods of engagement – each level of engagement will have a range of methods that the Council is able to choose from to undertake the engagement required. As well as the views of communities and affected and interested parties, there is a wide range of information sources, considerations and perspectives that informs the Council’s decisions, including the requirements of Government policy, technical matters and the financial implications.

B. Consultative procedure to be taken:

If the recommendation is to sell the asset, then it is necessary to implement a “Special consultative procedure”. Under this procedure the Council (not CCHL) must consult the public of Christchurch on this proposed sale and seek public input.

The existing CCC policy on the Special consultative procedure is covered by the following tests:

• The Council will review the appropriateness and effectiveness of the engagement strategy and methods as the process proceeds. There may be occasions in which the Council chooses to carry out engagement at a level higher than that indicated by the significance of the decision as part of its commitment to promote participatory democracy.
• The Council will work to ensure the community is sufficiently informed to understand the issue(s) or proposal, options and impacts and has time to respond, so they are able to participate in engagement processes with confidence.

I sat on the CCHL Board for 12 years. These are the sort of additional questions I would be asking if I was still sitting as an elected rep…

1. The technical appropriateness of the asset compared with other market options.
2. Whether the company is being run efficiently and excess overheads have been removed offering a cost-effective product to the market it serves.
3. Whether the company is overstaffed. (e.g. the staff costs for those earning over $100,000 pa total at least $12.3m).
4. Potential joint ventures with other companies to increase the value and service to customers by Enable.
5. Ways of adding value to the existing asset through other CCHL companies.
6. Whether Enable has the correct people on its board. (I note that the board fees in the last financial year were $413,000).
7. Why a Christchurch Ports Authority has not been promoted to encourage trade with the world by Christchurch and South Island companies, and with the world trading back with these companies.

Conclusion

I am agnostic about what CCHL are considering because I don’t know enough facts to form an opinion. I remain committed to an open debate about the pros and cons of the retention of Enable Ltd or otherwise.

It’s essential that CCHL informs the ratepayers the process being undertaken by their board with Macquarie. Is it time to start again and test whether their appointment complies with the Local Government Act and existing CCC policies?

When the chair referred to his responsibility under the Companies Act, did he refer to the Local Government Act when addressing Councillors? Those who established the CCHL structure to comply with the Local Government Act have gone as have the bureaucrats who were part of this process. Has there been a loss of institutional memory?

I am concerned that CCHL is looked on as a goose that will always lays a golden egg at the Council table. It might be time to have a hard look at this organization and consider who sits on the boards and test the commitment of Directors, and staff, of the CCHL companies to public ownership principles.  Just having one Councillor on the CCHL board is not correct.

In future Tuesday Club notes I will carefully investigate CCHL companies and their understanding of public ownership, and the accountability which accompanies it.

This city swam upstream when most councils sold their assets. Christchurch didn’t.  It’s time to remember why this city was a non-seller of our infrastructure. We must renew our commitment to public ownership and financial excellence by all our trading companies. It’s time that our elected reps, who control CCHL in the interests of the ratepayers of this city, demand a more active engagement in CCHL activities.

Let an engaged debate on our city’s assets commence. Voltaire once said, “the price of democracy is eternal vigilance”.