Council Wipes Surf Reef Debt
Wednesday, August 17, 2011
The South Taranaki District Council has written off a $400,000 loan it made to the Opunake Artificial Surf Reef Trust (OASRT) as a non-recoverable debt at yesterday’s Council meeting.
The Council underwrote the sum of $400,000 in 2008 to enable OASRT access other funding and to complete the reef project.
Three years later the reef has not been finished, is not working as promised and OASRT has not made any payments towards the loan.
“It is hugely disappointing but I think we had little option left but to write the debt off,” says Mayor Ross Dunlop. “OASRT does not have the ability to repay the loan and is unlikely ever to have. We investigated the possibility of joining with OASRT to take ASR (the company that was contracted to build the reef) to court to recover some of the money; however our legal advisors have told us the costs could easily equal the amount we could reasonably expect to recover,” says Mr Dunlop.
“The Council was never a party to the contract so getting some of our money back was always going to be a difficult proposition. I believe it is now time to write this amount off the books,” he says.
The decision to support the Opunake Artificial Surf Reef Trust was made almost 8 years ago and Mayor Dunlop acknowledged the Council of the day did take a risk by supporting something that was innovative and largely experimental.
“It was a decision made with the best of intentions for our district and it did create a surge of interest in Opunake and had an impact on property prices,” says Mr Dunlop. “Dr Kerry Black and his team were very convincing and plausible and they have been able to convince many communities here and around the world of their abilities - their actual performance however has been woeful and disgraceful.”
The Council has also asked officers to work with OASRT to remove any equipment left at Opunake headland so the area could be quickly returned to its former state.