Wellington Water Ltd (WWL) says it has given South Wairarapa a better deal than other areas – surely a surprise to local people who see how much they’re paying for water services and all the work yet to be completed!
On 3 March, WWL released a bombshell report on its lax control of spending and contractors – these all funded by South Wairarapa District Council (SWDC) and the five other councils which, collectively, own WWL and rely on that company to manage their wastewater, town supply and storm water assets and services.
Through March, WWL leaders fronted up with statements that, “we are consistently more expensive than other comparable councils, particularly for drinking water and wastewater assets” and “it’s abundantly obvious that we have not been delivering value for money”.
Chairman Nick Leggett admitted: “Our investigations confirmed a lack of oversight, assurance, and weak financial processes and controls around how the company manages its consultants and contractors, which opens us up to risks
around fraud.”
SWDC and other councils have demanded more information on how much WWL’s laxity has cost their ratepayers. And this led the WWL chief executive to opine that SWDC was “probably getting the best deal of any of the councils in terms of value for money”.
‘Value for money’ The Star asked WWL to explain his “value for money” claim. In formal reply, acting chief operations officer Charles Barker referred to a 1.53% management and advisory services fee paid by SWDC towards WWL’s costs for back-office staff, IT services and other business overheads. “SWDC receives a higher percentage of time than WWL allocates to supporting other councils.”
Corporate cost allocations aside, SWDC awaits explanation on how the South Wairarapa is being impacted by WWL’s poor performance. During March, the company pledged to “high-level discussion” with each of the six councils on “the current situation and where we think we are getting value for money and where we have suspicions.” Asked when South Wairarapa would get answers, Barker told The Star: “We are currently talking with SWDC to arrange a suitable date that works for councillors.”
Contracting The WWL “suspicions” are around its own contracting practices and charges. Asked if all work on water services in this district is outsourced to national contractor Fulton Hogan, Barker said: ”When SWDC became a shareholder of WWL (late 2019), the WWL/Fulton Hogan Alliance took up the maintenance of the district’s three water network. This team is based out of Carterton, the same depot the Ruamāhanga Roads Alliance operates from.
“Where possible and as required, South Wairarapa-based contractors are utilised inclusive of those employed to work on the treatment plants and network,” Barker said. “As our work is on the open market, we encourage tendering from all contractors, inclusive of those working locally.”
But deputy mayor Melissa Sadler-Futter has already taken the company to task on exactly this point. “Before a job is put to market, we already have an indication in South Wairarapa that several of our major jobs, if put to local contractors, could be delivered significantly cheaper than through Wellington Water,” Sadler-Futter said during March.
Payments and work The scene is set for a showdown behind closed doors. Meantime, water services cost escalation is plain in SWDC reports. Operating expenditure on wastewater, water supply and storm water was up to $9.22 million in 2023-24 – 72% higher than six years earlier (2018-19), immediately before WWL took over.
Upgrading works managed by WWL are regularly subject to delays and cost over-runs.
Martinborough wastewater pond desludging, for example, has a May deadline and year-to-date spending on this project is $26,000 over budget (as reported by WWL to SWDC’s strategy committee on 12 March). But there is no appearance of work actually occurring at the site (25 March). Meanwhile, Greytown ponds desludging, planned also for 2024-25, has been deferred. The funding year ends 30 June, 2025.
