Wellington Water changes after outsourcing fiasco save up to $40m in first year

Wednesday, 27 May 2026

Changes Wellington Water made in the wake of its overpaid contractor fiasco have saved up to $40 million in a single year – but the utility insists this is not what it overspent.

The council-owned organisation meets on Friday, with the details in a now-public agenda, 14 months after it was revealed it was overpaying some contractors.

The agenda says the utility has set up “competitive procurement practices” and brought project management in-house, saving money in the process. But it had also slowed progress as new processes were introduced.

“It is noted that cost savings arising from these changes are estimated to be $30m to 40m,” it says.

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Two reports into Wellington Water were obtained by The Post in 2025. One by AECOM revealed unplanned water spending per kilometre trebled between 2017 to 2022, resulting in the utility paying nearly three times as much as comparable councils. Wellington Water said some of this was because more work was being done.

The second, by Deloitte, found the utility was at significant risk of fraud due to weaknesses in its financial systems. It revealed a culture that prioritised contractors over ratepayers and that council budgets were shared with contractors, increasing the chance of not getting a good deal.

Wellington Water consistently refused to investigate how much it historically overspent but chief executive Pat Dougherty previously estimated it was about $10m.

Tim Brown, a former Wellington City councillor setting up a water users’ group, said there were two ways to look at the $30m to $40m and both were “discouraging”.

They either showed the “truly horrific” amount ratepayers were historically overcharged. Or it was an ”implausible“ figure and impossible to interrogate with the information supplied by Wellington Water.

The Wellington Water Committee, which monitors the performance of Wellington Water, needed an independent report looking into the claim, he said.

Wellington Water Committee chairperson Ros Connelly said there were two other key changes adding to the drop in cost – a construction downturn meant more competition and Wellington Water now took on risk, meaning contractors were not factoring that in to the price.

Wellington Water was now getting better value for money due to changes instigated by Dougherty in 2025, she said.

Wellington Water chief operating officer Charles Barker said the $30m to $40m savings could not be read as the amount it previously overpaid as they “completely changed the model”.

The utility had been lucky that the extra risk it took on had not come to pass. The amount would have been a lot less if it had. There were no plans for an independent review, he said.

Former Upper Hutt mayor Wayne Guppy, a vocal critic of Wellington Water overpayments, believed the $30m to $40m was a conservative estimate of previously wasted money.

“It’s all very well to say we are saving. The question is why not run competitive procurement from day one?,” Guppy said. He backed calls for an independent review of the figures.

Porirua mayor Anita Baker said the figures showed Wellington Water’s work to restructure its commercial relationships and introduce stronger market tension was already delivering.