Damning Wellington Water report comes to light four years too late

Tuesday, 15 April 2025

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Wellington Water says it has only just become aware of a report that picked up its money woes back in 2021.

A paper released ahead of the Wellington Water committee meeting next week reveals that a report commissioned by the council-owned water services provider in 2021 that “echoes some of the value for money issues” was only recently discovered.

The missing paper included recommendations to strengthen existing financial management practices, to ensure costs and progress of work were actively tracked and monitored and to implement a process to review crew member performance and service quality.

It also says its performance reporting was inefficient and lacked data quality, and the entity had no consistent approach to validating capital and operating expenditure and third party claims.

At the end of 2021, a half-year report painted a drastically different picture, stating the entity was in a “better situation” than many, and was performing well against its operating budget.

The papers released today for next week’s meeting said time and resource constraints meant Wellington Water would be unable to complete all 123 recommendations on contract management practices and financial management.

The actions aimed to improve the company’s structure, organisational culture and processes to lift capability and improve outcomes and value for money.

The recommendations originated from major reviews including the 2022 inquiry into a lack of fluoride, a FieldForce4 report that highlighted soaring costs, a damning paper into a $51 million accounting blunder last year and a report from March showing some work costing three times what it should have.

Officials said the recommendations would be separated into three groups: those that were already implemented or could be completed using existing resources; those that would be handled after completing public consultations for a new water entity; and those that would be “addressed in the long-term”.

The constraints meant not all recommendations would be addressed in the short to medium-term. Wellington Water would prioritise actions that could be achieved in the time the entity had left and those with the biggest impacts would be prioritised.

The final groupings of what could be achieved will be revealed in late May.

Councillor Tim Brown said the recent reveal of the 2021 report was something the company “obviously chose to ignore”.

“The critical point is that a lot of ratepayer money has been wasted.”

He said the agenda was short, had no details and had “fundamental deficiencies”.

The process had a “serious lack of third party expert oversight,” and needed to be subject to an expert independent review, he said.

A Wellington Water spokesperson said the entity was working at pace to prioritise these recommendations and its actions.

“We are committed to maintaining transparency around our progress, and we will make the prioritisation groupings publicly available as soon as possible.”

Wellington Water did not provide comment about the 2021 report in time for publication.

The company’s commitment to revising its ways was announced by the utility’s chief executive Pat Dougherty and board chairperson Nick Leggett just last month.

At the time, it was said the issues went unchecked due to a panel arrangement where approved contractors and consultants effectively divided out work among themselves, which led to a lack of oversight, double-handled work and extra contract management costs.

Both Dougherty and Leggett warned the work would mean issues would take more time to fix.

Mayor Tory Whanau said she had received the report today and would review its implications carefully prior to the meeting next week.

The Government’s Local Water Done Well reform is is currently going through a public consultation period, which closes on April 21. By the end of June, councils will have decided on their direction.

There are three options for a water entity: a regional three-waters organisation, a council only three-waters organisation; or a modified version of the current Wellington Water Ltd model.

Wellington Water is owned by Greater Wellington, Wellington City, Hutt City, Upper Hutt, Porirua, and South Wairarapa councils.

The Wellington Water Committee is made up of mayors or deputies from the shareholding councils that own it, and mana whenua.

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