Wellington Water partner Fulton Hogan makes $497m profit

Wednesday, 5 March 2025

Wellington Water’s favoured contractor and partner, Fulton Hogan, made an almost $500 million profit last year but may now be asked to refund some of the money it is accused of having been overpaid.

Two scathing reports into Wellington Water, owned and funded by the region’s councils, came out on Monday showing the utility was over-paying contractors, was open to fraud, and was showing council budgets to contractors.

The full scale of the over-payment is yet to be quantified but there are already calls for heads to roll and for a full audit of all contracts since the Wellington Water-Fulton Hogan alliance started in 2019. The Commerce Commission is investigating “potential unlawful conduct” by contractors to Wellington Water.

Fulton Hogan’s 2024 annual report shows that, across Australia and New Zealand, it last year increased revenue from $6.67 billion in 2023 to just over $7b of which $497m was profit before tax.

Managing director Cos Bruyn was paid a $3.7m salary in 2024 and has a significant stock holding in the company.

The Post on Tuesday visited Bruyn’s house in a leafy Remuera, Auckland. He wasn’t there but soon after Fulton Hogan issued a statement, after Wellington Water withdrew its ban on speaking to the media.

The statement came after the company was asked if it was aware Wellington costs were so high compared with other councils, if it ever raised this with Wellington Water, if it would conduct an internal review to find out what happened, and if it would pay back any of the money.

“As per the independent AECOM summary report, ‘the operations and maintenance labour and plant rates were fair and reasonable compared to competitive industry charges, and AECOM noted that if anything, they appeared somewhat low’,” the statement from an unnamed spokesperson said.

“Similarly to other New Zealand alliances, Fulton Hogan’s margin is fixed on the Wellington Water Alliance commercials. As also noted in the summary report, higher maintenance expenditure may be ‘reflective of the network condition’, to which we would agree.”

Civil Contractors NZ chief executive Alan Pollard said the two reports were correct in their criticism of Wellington Water and its lack of systems, oversight and monitoring.

But he disputed claims of contractors overcharging, saying Wellington simply had a lot more work that needed to be done on the pipes than the councils it was compared with.

He accused councils, media and some in Wellington Water of “deflecting” blame to contractors.

While the report noted labour and plant rates were low, it found unplanned water maintenance cost three times more per kilometre in Wellington than comparable councils, contracted pipe installation “well exceeded” the average price, and traffic management and site establishment and disestablishment costs were “significant”.

Routine pipe construction costs were “significantly higher” than other councils, and there were “significant” cost discrepancies in water supply maintenance costs, they found.

Wellington Water and Civil Contractors NZ both say part of the higher costs was due to Wellington needing more-intensive work.

Councillor Tim Brown said he was getting the ball rolling on the council taking legal action against Wellington Water directors. If it was shown that contractors over-charged, they should be made to pay, he said.

Wellington City councillor Ben McNulty said it was time for Fulton Hogan to right wrongs.

“Fulton Hogan should put away their lawyers, throw open their books and work with all the Wellington Water councils to either pay back or discount from future work,” he said.

Meanwhile, the fiasco has reignited an year-old showdown between Wellington Water and plumbers, who last summer offered to help it get on top of excessive leaks but were rejected.

A handful had now made it through the process to fix leaks on the Wellington Water network but Master Plumbers chief executive on Tuesday said the revelations in this week’s reports were “absolutely staggering”.

Most councils outside Auckland and Wellington allowed plumbers to work on public pipes, he said.

“For Wellington to give exclusive rights to a major contractor for their water maintenance programme raises questions about a potential conflict of interest and leaves other qualified providers, such as plumbing businesses, shut out.”

*UPDATE: The Commerce Commission has corrected its statement about its investigation. It is investigating “potential unlawful conduct” by contractors to Wellington Water.