Taxpayer funding sought for business case behind Kāpiti Airport rescue vision

When Te Kāhui Mahi launched its vision for saving Kāpiti Airport last August, it said a profitable commercial model was being developed with the backing of a growing network of strategic investors. But OIA documents reveal Puketapu ki Paraparaumu Trust had already applied to the Government as early as April 2025 for funding to help develop the business case behind the proposal.

When Puketapu ki Paraparaumu Trust publicly unveiled its ambitious Te Kāhui Mahi vision for Kāpiti Airport last August, private investment was central to the pitch made to local residents. Its 18 August media release said the Trust was developing a commercial model to support a profitable entity “backed by a growing network of strategic investors”.

The vision was expansive.

Rather than simply retaining Kāpiti Airport in its existing form, Te Kāhui Mahi used the previous Kāpiti Air Urban proposal of combining aviation with housing, commercial development, innovation and other activities across the airport’s substantial landholding.

The Trust said its approach prioritised financial viability and long-term sustainability, describing a viable airport alongside large-scale development and an innovation precinct as a compelling commercial proposition.

Te Kāhui Mahi subsequently reinforced the private investment message in its October Community Q&A: What is Kāpiti asking?, saying its vision relied on private investment, saying “The model is based on private investment — both asset investors (like airlines, tech, and aviation businesses who want to base themselves here) and financial investors who see the value of a sustainable, future-focused asset.”

But documents released to Local Aotearoa by Regional Development Minister Shane Jones under the Official Information Act reveal another part of the financing story.

Months before Te Kāhui Mahi was publicly launched, and before its “strategic investors” were being promoted to Kāpiti’s residents, Puketapu ki Paraparaumu Trust had already applied to the Government’s Regional Infrastructure Fund for public money to help develop the business case and feasibility work behind the proposal.

And according to government officials, that business case was intended to help the hapū investigate purchasing Kāpiti Airport and converting some of its land to residential use.

The Te Kāhui Mahi application appears in government papers as early as April 2025, suggesting an application to the Regional Infrastructure Fund predating this.

An annex listing Regional Infrastructure Fund applications relevant to regional air connectivity describes Te Kāhui Mahi as a proposal to develop Kāpiti Airport land for residential and commercial uses alongside airport operations and a technology hub.

At that stage, its application was on hold while Ministers considered their wider approach to regional air connectivity. That means the application for public funding was already before the Government at least four months before Te Kāhui Mahi’s public launch, if not longer.

A Kānoa briefing prepared for June 2025 provides the clearest insight into exactly what the Trust was asking the Regional Infrastructure Fund to support. Officials were considering 13 RIF applications relating to airports and aviation and seeking direction from Regional Development Minister Shane Jones about which should proceed for further evaluation.

Te Kāhui Mahi did not make the cut.

Officials recommended the application not progress and classified it as “Ineligible – not infrastructure.” The accompanying assessment is even more revealing. Kānoa classified Te Kāhui Mahi’s proposal as a business case and said the requested funding was intended to assist the local hapū with purchasing Kāpiti Airport, with an intention to convert some of the property to residential use.

Officials also noted that the redevelopment works were not consented and remained at a very early stage. In other words, Puketapu ki Paraparaumu Trust wasn’t asking the Regional Infrastructure Fund to pay for a new runway, terminal building or another piece of physical airport infrastructure.

It was asking the Government to help fund the work needed to develop the commercial proposition itself.

None of that featured in Te Kāhui Mahi’s public launch just two months later. Instead, the 18 August media release emphasised financial viability, commercial opportunities and private investment.

The Trust said a profitable commercial model was being developed with the support of its growing network of strategic investors. It said an investor summit had taken place in July. It also described the future of the airport as being shaped through collaborative planning between iwi, Kāpiti Coast District Council and the private sector.

There is nothing inherently contradictory about seeking both public and private money for a major development. Nor do the OIA documents demonstrate that Puketapu ki Paraparaumu Trust expected the Government to buy Kāpiti Airport for it, or to finance the enormous redevelopment ultimately envisaged through Te Kāhui Mahi.

That is an important distinction. But the documents do add context to the repeated public emphasis on private investment.

Because before Te Kāhui Mahi announced that its commercial model would be backed by strategic investors, and before it subsequently told the community that its vision relied on private investment and would not be a burden on ratepayers, the Trust had already asked central government to help pay for the work needed to establish whether its proposed airport acquisition and redevelopment actually stacked up.

There is another curious aspect to the application.

By November 2025, Kānoa was no longer describing Te Kāhui Mahi as outright ineligible for the Regional Infrastructure Fund. Instead, it appeared among a group of eligible RIF applications which officials were recommending Ministers decline.

The project was now described as feasibility work to develop Kāpiti Airport land incorporating residential, commercial, airport operations and a technology hub.

But the fundamental problem remained the same. Kānoa said Te Kāhui Mahi had poor alignment with the fund’s priorities because it was “seeking funding for a feasibility study not physical works.”

The documents released by Jones’ office don’t explain why an application regarded as ineligible because it wasn’t infrastructure in June had become eligible but unsuitable for funding by November.

That change deserves an explanation from Kānoa.

By February this year, Ministers had agreed to delegate authority to Jones to decline eligible RIF proposals that Kānoa was not prioritising for evaluation. Te Kāhui Mahi remained one of the projects recommended for decline.

The amount requested by Puketapu ki Paraparaumu Trust has been redacted from the documents on commercial grounds, meaning it isn’t possible to reliably establish how much taxpayer funding was sought. While the Regional Development Ministers Group had delegated authority to make decision on Regional Infrastructure Fund grants and loans over $3 million and up to $35 million, this doesn’t necessarily mean Puketapu ki Paraparaumu Trust had applied for more than $3 million. The delegated authority given to Shane Jones to decline may well, and almost certainly does, apply to applications for amounts less than $3 million

The revelation that public funding for a business case and/or feasibility work doesn’t mean Te Kāhui Mahi’s model cannot ultimately be predominantly, or even overwhelmingly, privately financed.

A distinction can reasonably be drawn between funding the eventual acquisition and development of Kāpiti Airport, and funding preliminary feasibility studies and business case work.

Private investors also routinely expect significant due diligence before committing capital to a project of this scale. But that’s precisely why the Regional Infrastructure Fund application is relevant.

If Te Kāhui Mahi’s vision relies upon strategic private investors, a legitimate question is why taxpayers were being asked to shoulder the cost of developing part of the commercial case those investors would presumably rely upon, especially given our community has been told repeatedly how great and commercially viable their vision is.

It also raises questions about what Te Kāhui Mahi means when it says its vision “relies on private investment”. Does that mean private capital would ultimately pay for the acquisition and physical development while central or local government funds enabling and preliminary work?

Was the Regional Infrastructure Fund application a one-off attempt to secure assistance with its business case? Or are other forms of government support expected to form part of the eventual investment model?

There is nothing wrong with any of these scenarios. The Trust is completely within its rights to apply for central or local government funding to advance its aims, and Te Kāhui Mahi's own material has also contemplated partnerships with public as well as private sector entities. It is just that doing so creates a very different proposition from what has been sold to the Kāpiti community that this was a vision that could rely on private commercial investment.

Te Kāhui Mahi deserves credit for trying to confront one of the fundamental problems facing Kāpiti Airport more directly than many of its previous advocates have. The existing aviation operation has struggled financially, and simply insisting the airport is vital does not make those economics disappear.

So undertaking proper feasibility work and developing a robust business case makes complete sense. For a project involving the acquisition and redevelopment of more than 100 hectares of valuable land, it would be concerning if that work wasn’t done.

The question is one of timing.

Te Kāhui Mahi publicly launched a vision built around financial viability, long-term sustainability and a profitable commercial entity “backed by a growing network of strategic investors”. Its website subsequently told the community that its model was based on private investment.

Yet before making those claims, Puketapu ki Paraparaumu Trust had already sought central government funding for work officials described first as a business case and later as a feasibility study, work intended, at least in part, to support its proposed acquisition and redevelopment of the airport.

That does not mean the vision cannot work. It does not mean private investors will not ultimately fund it. And there is nothing wrong about applying for government assistance.

But it does suggest the commercial proposition was, and quite possibly still is, considerably less settled than the confidence of the public pitch might have implied.

If the vision was already sufficiently compelling to be promoted as a profitable proposition backed by a growing network of strategic investors, there is an obvious question worth asking: why was taxpayer funding sought for the feasibility and business case work needed to demonstrate it, rather than that cost being met by the frequently touted private investors?

As we get closer to this year’s General Election, Kāpiti Airport will once again inevitably become a political issue, with candidates grilled on where they and their parties stand. We have seen the same pattern around successive local and central government elections: sweeping claims about the airport’s importance and commercial prospects are revived, politicians are pressured to commit to saving it, and then the difficult questions about demand, viability and who ultimately pays are left largely without credible answers. That cycle cannot continue indefinitely. The growing body of evidence challenging the claims made by pro-airport advocates is an issue that is not going to go away.