Wellington Water apologises 'unreservedly' for $51 million budget mistake

Friday, 24 May 2024

Wellington Mayor Tory Whanau speaks outside Parliament after meeting with Local Government Minister Simeon Brown about the city's water crisis.

Wellington Water has apologised for failing to include $51 million of corporate costs in budget advice to its shareholder councils.
The shortfall relates to more than $900 million of capital works planned for a three-year period.
Rather than charge ratepayers more, it’s been proposed that the work be carried out over a longer time than originally intended.

Water services company Wellington Water has apologised “unreservedly” to its six shareholder councils for a $51 million budget error.

The error was a failure to include in advice to councils its 6% corporate cost for three years of major water capital projects.

The corporate cost was an essential charge that covered Wellington Water’s overhead costs, including project and corporate support, Wellington Water said in a statement on Friday.

In a regional capital programme of more than $900 million, the error meant it needed to account for a gap of about $51 million for the first three years of the programme.

“This was an error, and we apologise unreservedly to our councils for this oversight,” Wellington Water chief executive Tonia Haskell said.

A large leak in the Wellington suburb of Te Aro in March. Wellington Water has said it could cost $30 billion over 30 years to fix the capital’s crumbling water infrastructure.

Wellington Water had proposed to the councils that it would work to mitigate the impact of the error within the programme, rather than ask ratepayers for more funding.

“This means we can adjust the pace of the work over a slightly longer period to account for this oversight,” Haskell said.

Wellington Water was working with each of the councils on possible options to manage the gap.

That would affect each council in different ways and councils would need to make their own decisions on what worked for them.

Wellington Water chief executive Tonia Haskell apologised ‘unreservedly’ for the error.

Wellington Water board director Pat Dougherty said the board had decided to appoint an independent party to work with staff to review what had happened and provide recommendations for improvements.

The advice that contained the error was provided to councils for their draft 2024-2034 long term plans (LTP).

“We acknowledge the impact this has on councils, particularly at this late stage of their LTP process. Again, we apologise for this,” Dougherty said.

Infrastructure Minister Chris Bishop said he was flabbergasted, but that it was a continuation of more of the same from Wellington Water, The Post reported.

The blunder reinforced the need for reform, and the Government would move as quickly as possible so that a new model could be set up, Bishop said.

Earlier this month, the Government announced it would be creating a new water entity in Wellington.

The $51 million error was made up of $20.1 million from Hutt City, $10.5 million from Porirua, $9.6 million from Wellington City, $9.3 million from Greater Wellington, and $1.3 million from Upper Hutt, The Post reported.

Porirua Mayor Anita Baker said that, as a long-term supporter of Wellington Water, she was “really, really angry”. She wanted to know how long Wellington Water had known about the error.

Hutt City Mayor Campbell Barry said the mistake undermined public confidence in Wellington Water.