2074 days to Wellington Water meltdown

Wednesday, 5 March 2025

Councillor Ray Chung

It promised efficiency and “value for money” but now, 2074 days in, the Wellington Water alliance with Fulton Hogan has been shown to have achieved quite the opposite.

Two reports out this week found that Wellington Water, owned by the region’s councils, has been paying contractors more than it should for some repair work, is prone to fraud, and had a shoddy tendering process. Civil Contractors NZ say the cost of unplanned maintenance is triple the cost of other areas because Wellington needs more work per kilometre.

The exact figure for how much was overspent remains unknown, but there are calls for a forensic look at all accounts since the Fulton Hogan and Wellington Water alliance was announced in September 2018.

It came into effect 2074 days ago, in July 2019.

Wellington Water staff work on a water leak on the corner of Jervois Quay and Hunter St.

Wellington Water promised that approach would help improve customer service delivery and customer experience, create efficiency and value for money around the delivery of network maintenance work around the region, and deliver better value for our client councils.

But things did not work out as planned. While there has been outrage about the latest report, there is vindication for those who were asking questions for years.

Councillor Tim Brown has long been critical of Wellington Water funding.

The first public hint was in December 2022, when Wellington Water sent the Wellington City Council a memo warning of dire consequences if the council did not give it $10m more. It opted instead for $2.3m. Council staff then warned against extra funding, highlighting two lots of extra money – $5m and $2m – in 2022.

Ray Chung was one of the councillors saying more information was needed before handing over money. Tim Brown confirmed on Tuesday he had always voted against more money for Wellington Water due to the inability to get “evidence of value for money from it”. This included the year he spent on the Wellington Water committee.

Councillor Iona Pannett is one of just two who voted against more Wellington Water funding during one request.

The extra $2.3m led to the council getting a review of Wellington Water. When details leaked in December 2023, it painted a worrying picture of soaring costs and duplicated jobs. Then-Wellington Water chief executive Tonia Haskell dismissed the report as a “distraction”.

“[Wellington Water] does not accept the report, and is unable to approve it or sign off on the report’s recommendations,” Haskell wrote to council chief executive Barbara McKerrow. Haskell on Tuesday said she had an agreement with Wellington Water to not comment publicly.

Within days of that report, and despite concerns about transparency, the Wellington City Council granted another $2m to fix leaks.

“We actually need some credible metrics to analyse where the money is going,” councillor John Apanowicz said at the time. “We know that it’s going down the drain.”

Wellington mayor Tory Whanau has been sceptical of Wellington Water funding requests.

Brown tried, but failed, to delay the paper saying it was “risible” that it would make any difference in the coming months. Sarah Free said it was clear the council did not know enough about where the money was going. But in the end only Brown and Iona Pannett voted against the extra funding.

While a lot of the reported issues were around Wellington City Council, Upper Hutt mayor Wayne Guppy has also long been raising concerns. Wellington mayor Tory Whanau has also long been sceptical of Wellington Water spending. Others, at various times, raised concerns.

By May 2024, Wellington Water fronted to councils with an accounting error that meant they had to find another $51m over three years. Haskell left soon after to be replaced by Pat Dougherty, who has since been praised by usual Wellington Water foes for fronting up and dealing with its problems.

He was soon in front of the Greater Wellington Regional Council with bad news. Wellington Water needed another $39m. He talked of coming into an organisation with “learned helplessness”, in need of a culture overhaul, and borrowing asset management systems off contractors.

Wellington Water Board chairperson Nick Leggett on Tuesday said he joined the Wellington Water board in 2022 with “eyes wide open“ as he started the day after it was revealed that it had a fluoride failures at one plant meaning water was unfluoridated for almost a year and had been patchy dating all the way back to 2016.

But it was the $51m budget blow out that sparked the new reports, and a change of culture under a new boss meant whistle-blowingstaff were encouraged to come forward – leading to this week’s revelations.

While the reports do highlight multiple failings they also lead to more questions: How much have rate payers overpaid? Is there any chance of getting the money back? And how many heads will roll, if any?