New aircraft engineering premises will keep jobs in the city
28 February 2003
Christchurch City Council has given approval to its investment company
Christchurch City Holdings Limited (CCHL) to invest $20 million at Christchurch
International Airport to allow the Christchurch Engine Centre to establish
its new high-tech engine-test and overhaul facility.
To fund the facility, CCHL will borrow $20m, which will be used
by a subsidiary company to fund construction of the new test facility. The
subsidiary will then lease the new facility to Christchurch Engine Centre
on a commercial basis.
The decision was announced today by the Chair of CCHL, Dr Paddy
Austin and Christchurch Mayor Garry Moore following an in-committee session
of the City Council on 27 February.
‘
We’re extremely pleased that this project’s been approved in
principle and now the parties will be working through the details,” Dr
Austin said. “It’s a win-win partnership with the city’s
world-renowned aircraft engineering centre. The Engine Centre will get a
new purpose-built engine-test facility and we will receive a commercial
rate of return on our investment.”
The Christchurch Engine Centre, which is jointly owned by Pratt
and Whitney and Air New Zealand, announced an $80m expansion of its world-renowned
aircraft engineering operations in Christchurch three months ago. The new
centre’s base workload will be its contract to service the V2500 engines
that Air New Zealand will be putting on its 15 new short-haul A320 Airbus
fleet, along with a further 20 A320 aircraft under option by the airline
over the next 10 years. A range of other airline customers will be sought;
some are already customers of the existing facility.
“
We’ve been talking to them for a couple of years now on how we can
bring this about for the city, so it’s heartening to know the Council
is in full agreement on this,” Dr Austin said.
Mayor Garry Moore, welcoming the Council’s decision to support the
project, said it was vital for the city to retain the aircraft-engineering
centre.
“
Without the new facility, maintenance contracts for the new V2500
engine will go overseas,” Mr Moore said.
“
This would result in the eventual loss of all 300 jobs at the Christchurch
Engine Centre as old technology engines are phased out and the current test
facility reaches the end of its economic life,” he said.
‘
However, if the new facility proceeds, it will not only save those
300 jobs but will create a substantial number of new positions over the
next 10 years – most of them highly skilled with comparatively high
rates of pay – as well as 300 estimated construction jobs while the
facility is being built.”
Mr Moore said this would directly put an additional $30.8m into
the Canterbury economy annually (plus a further $16m in the initial construction
phase) and would indirectly (through downstream jobs) create an additional
1374 jobs at a payoff of $77m annually.
He added that the Christchurch Engine Centre currently earned 97
per cent of its revenue from overseas customers and its overseas earnings
were expected to double once the new facility was fully operational.
“
Having such a facility in Christchurch will enhance the city’s high-technology
reputation and will promote the city as an innovative, productive, highly
skilled centre for engineering, avionics and related professions and trades,” he
said.
Dr Austin said the deal had been negotiated to attract the joint venture
to Christchurch, in the face of stiff competition from a number of other
countries with existing facilities, while providing a positive commercial
return on the investment.
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