Uncertainty remains over future funding arrangements between Port Otago and the Otago Southland Rescue Helicopter Trust.

The Otago Regional Council - the sole shareholder of Port Otago, admitted a breakdown in relations between the two in September 2025, after a ‘letter of expectation’ was sent to the port for the $350,000 annual payment to be transferred directly to the helicopter trust.

But issues continued and the last quarterly payment was missed at the end of last year, so the ORC had to step in and make it happen, out of its general reserves.

Now five months on, there are still issues, which were discussed at its monthly meeting last week.

Cr Gary Kelliher originally opposed the ORC motion last year to continue paying the funding until the partnership was sorted between the port and the rescue helicopter trust, saying they were at the mercy of the directors.

Rescue Helicopter Trust missing donations from ORC

Last week Gary brought to light the fact that there was “some uncertainty,” still with the situation, and suggested that if the negotiation failed, they needed to return the financial responsibility back to the regional council.

But deputy chair Kevin Malcolm said he was given an assurance on February 17 by the Port Otago chair that the payments for the 2026/7 year has been resolved.

“I think this will just add to our frustrations,” he said, regarding Gary’s suggestion to add an extra level of protection to the arrangement.

But chair Hilary Calvert supported the motion, “because they ought to be able to make this work.”

Gary said they have a responsibility for that extra level of protection, and the regional councillors voted to make sure that was now in place.

The Otago Regional Council funds the Otago Southland Rescue Helicopter Trust $350,000 a year. Image: file

Meanwhile, The Otago Southland Rescue Helicopter service will have a shortfall of about $2 million going into the next financial year, as it seeks to renew vital air ambulance contracts.

HeliOtago director Graeme Gale told the Otago Regional Council in late 2025 that its 4-year contract with Health NZ/ACC will expire in October 2026, and there were no negotiations underway yet for its future.

He said the Government contract for air ambulance services in the South Island was split between HeliOtago and Garden City Helicopters in Christchurch, and the Southern operation was able to subsidise the funding shortfall from the other areas of his commercial flying business.

With five helicopters based at the Taieri airbase and a further two in Queenstown, the total missions over the past year increased from 2057 to 2165 - with hospital transfers the highest on 946, accidents 621, medical emergencies 490, and Search and Rescue 108.

Graeme said he was concerned about future funding, and the new technological advancements meant they now faced a major funding shortfall more than ever.

The air ambulance funding contract with the Government, which starts in October 2026, will be for the next 10 years.

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