ODT calls for DCC to "Cut its Cloth"

The Dunedin Ciy Council finance head, Athol Stephens, recently warned that, in the face of an economic downturn, major city projects may need to be reconsidered.
The ODT has now added it's voice:

As Dunedin's debt grows, it also faces a credit rating downgrade, albeit small, which means the interest rate it has to pay on debts will rise. At the same time, income from the council-owned companies - which are used to subsidise rates - can be expected to decrease because they will not be immune from recession.Dunedin has no realistic choice other than to cut its cloth to match its current circumstances.

It is becoming increasingly clear that Dunedin cannot afford the new Stadium.
But it is hard to see the current Council changing direction.

Dunedin City Council Broadband

Information from Flute Networks:

Aurora Energy Ltd will be the network owner and Flute Network is the
Brand. We are a wholly owned subsidiary of Dunedin City Holdings Ltd,
who in turn are a wholly owned subsidiary of the DCC. Our role will be
to install and provide infrastructure which is dark optical fibre. We
will not be providing active equipment.

We will have a group of approved Partners who will connect to the Flute
Network. These Partners will all provide value added services including;
ISP services; management of the network; full IT solutions;
application/hardware hosting; applications. Alternatively you can engage
any IT Integrator to commission the fibre service.

Any company, organisation or individual can connect to the network. A
contract term of at least 3 years is common. Generally the decision to
purchase is driven by the need for connection speeds of 10Mb/s or
higher. The service is not targeted at domestic consumers at this stage
and is not likely to be economic in that situation in the short term.
As the network grows, there will be loops which will provide network
diversity.

What follows from this is that the success of this network will
depend on the price and specs of the services being offered by the
Partners.

Dunedin City Holdings Result Disappoints

The profit of Dunedin City Holdings is down to $8.6 million form 22.6 million last year. Although half of this drop is due cash being paid to the Council as interest rather than dividends, it is still a disappointing result.
Dunedin City Holdings has been a cash cow for the City Council, and the it is expecting DCH to provide $60 million towards the new Stadium. But this cash flow is under threat from DCH's declining profits.
Factors which could reduce future Dunedin City Holdings's profits include:

• Tourism downturn
• Construction downturn in Central Otago
• Investment in residential development in Luggate
• Investment in Broadband
• Investment in The Street
  

DCC Broadband Has No Internet ?

A post to the Dunedin Linux Users Group Mailing List suggests that the Dunedin City Council Broadband initiative does not include and Internet connection:

The plan as I understand it is that users in the CBD pay $995 per month
to lease a dark fibre pair which makes point to point link between two
locations.
To light up service, you either do your own thing, or get your ISP to
pick up service from the other end.
It's not a loop. It's not active service. It isn't Internet. It isn't
a residential service.
In ChCh where the business model is the same, you can pay $1800 per
month for a Gbps of cross-town capped or $2500 uncapped. That gets you
as far as the Internet exchange in ChCh, which is doing very well. ISP
services are on top.

There will be businesses for which this is useful. An ODT article claimed that "Businesses back broadband vision". But an across-Dunedin link will not allow business to avoid ISP's restrictions and fees.
There is a comment on this issue by "farsighted" on the ODT website.

The Decline of Otago Rugby and the Stadium

The current low state of Otago Rugby has consequences for the viability of the proposed new Stadium. Its operating budget relies on large crowds going to Super14 and NPC matches. The projected Operating Budget is based on Carisbrook crowds up to 2006. It is no secret Carisbrook crowd numbers have collapsed over the last two years, but the actual figures do seem to be secret. At the end of last year in a letter to the ODT, I asked for these figures (for last year), but the Carisbrook Stadium Trust declined the ODT's request to provide them.
I believe that the paid attendance figures for Super 14 and NPC matches at Carisbrook in 2007 and 2008 should be made publicly available. Then there can be a debate about what are realistic figures to be used in Stadium's operating budget. I have no doubt that using this year's figures would result in a significant deficit.

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