Lollies, furniture and monthly car grooming: More spending questions raised over mega roading contracts
Saturday, 23 May 2026
A review into the Cyclone Gabrielle road rebuild has raised questions over spending on fleet vehicles - including monthly grooming costs - bulk buying of biscuits, lollies and chocolates, and the purchase of office furniture.
The Transport Rebuild East Coast (TREC) alliance was set up by the NZ Transport Agency Waka Kotahi (NZTA) in July 2023 to rebuild transport links across Hawke’s Bay and Tairāwhiti following the devastating storm.
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Earlier this month, the Sunday Star-Times revealed how a confidential preliminary review into the taxpayer-funded alliance raised concerns about spending, accommodation, surplus staffing and resistance to releasing information.
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On Friday, The Post revealed NZTA board chairperson Simon Bridges had launched an external probe on the back of six separate internal investigations into alliances, alongside allegations of financial discrepancies, conflicts of interest and contract management failures.
An alliance is a partnership where government agencies or councils work as one team with private contractors to build major infrastructure projects. They are usually governed by a joint board that makes all decisions unanimously.
The TREC alliance comprises NZTA and KiwiRail as joint owner participants, and Downer, Fulton Hogan and Higgins, alongside subcontractors Tonkin + Taylor, Aurecon and WSP.
NZTA has now released further details in a summary of the February 2025 report, which was sparked by whistleblowers.
Monthly car grooming
The report summary says 14 vehicles were transferred from another road-building alliance, with a total payment of $422,915.
The payment was routed to an “original owner” of the vehicles rather than through the alliance structure, and NZTA sought clarification from TREC, which was not provided.
Fleet and vehicle spending was recorded across multiple accounts and project registers, making it difficult to establish a clear total cost.
Investigators found more than 5400 transactions worth about $1.6 million recorded under one account. A further 173 transactions worth $146,000 were recorded under a separate fleet register.
Prior to July 2024, fleet costs were also included within travel expenditure, further limiting the ability to isolate a clear total.
All the vehicles were professionally groomed monthly.
The review found travel and fleet-related spending was difficult to analyse and verify because costs were recorded inconsistently across multiple accounting codes and project registers.
It identified nearly $2m recorded under a travel-related general ledger account, alongside a similar value recorded across a separate travel project register.
In some cases, items such as “breakfast”, “lunch”, “dinner”, “meals” and “café” were also coded to travel accounts, indicating non-travel expenditure was included within travel spending data.
Office furnishing
The review also highlighted more than $173,000 in office-related spending in a single month during the early stages of the programme, when temporary regional offices were being established in Napier, Gisborne, Auckland and Christchurch.
Surplus office furniture from a Wellington relocation was repurposed for the new sites, with delivery and installation costs of about $109,650.
However, nearly a year later, in June 2024, $174,169.72 was recorded in office-related spending.
This included $122,977 on office furniture, $11,613 on office supplies, $6360 on first aid supplies and $33,220 on software.
The review notes some of the furniture expenditure appears to have been reclassified between capital and operating costs, including a $44,577 adjustment linked to earlier office furniture purchases.
Furniture items included office, cafe and visitor chairs, desks, whiteboards, boardroom tables, and a leaner.
Biscuits, lollies and chocolates
Catering costs were not recorded under a dedicated ledger code and were spread across multiple accounts, making total spending difficult to establish.
The review summary identifies regular internal hospitality across the project, including morning teas, coffees, staff gifts and events such as a Christmas brunch in Napier.
It notes an email authorisation for “small snacks” at each office, capped at $80 per site, with most spending within that limit - but two instances above it at $135 and $306.
Christmas event costs were recorded at about $35 per head plus chocolate and spot prizes, but approval for that was issued after the spending occurred.
A separate 250-page invoice covering $173,674 in October 2023 for office-related purchases was also provided to NZTA by TREC.
The review says the volume of material made full analysis difficult, but an initial check identified items including biscuits, lollies and chocolates that did not align with NZTA policy.
In an explanation, TREC told NZTA items were purchased and stored, then used as required for approved offsite community/iwi meetings/workshops held in community halls or marae.
“Some biscuits may be used for the approved Friday Comms catering … they are not available for general staff for day-to-day consumption, or internal staff only meetings less than 3 hours duration,” the response stated.
‘The desire of individuals to have a home not a room’
The Star-Times revealed total accommodation-related spending was estimated at about $850,000.
TREC initially rented 27 residential properties for staff accommodation, later reducing this by 14. But the review summary says it was not established who authorised the leases.
It also noted difficulties in establishing the full cost of accommodation due to incomplete and inconsistent records, with NZTA unable in the time available to fully verify how properties were used or by whom. One named tenant’s role could not be established.
Monthly rental costs ranged from $2552 to $6215, with one arrangement including a $2400 monthly contribution from a tenant. The arrangement was not formally documented, and the review notes non-payment was not followed up.
TREC argued renting the home was better value for money, but that other “non-financial matters” factored, such as “the desire of individuals to have a home not a room; the ability of FIFO [fly in, fly out] workers to store clothes and PPE equipment … a residential house/apartment can offer outdoors areas and company; tends to deliver better health and wellbeing outcomes for many people”.
According to a property audit, 15 properties required furnishing.
The review found uncertainty around the disposal of surplus items, with staff indicating items would be sold when no longer required, but no records were provided showing whether this had occurred or how any proceeds were managed.
Further information was still being gathered at the time of the review, including on properties used across hotels, motels and short-term rentals, which the report says was also complicated by inconsistent coding.
The report was sparked by three whistleblowers.
“The concerns raised by the protected disclosers had substance, however, the full extent of what was happening in relation to spending, and whether fraud was occurring, was not possible to ascertain in the time available for completing the review,” NZTA said in its summary.
“The task of understanding TREC’s expenditure has been made more difficult by information not being readily available to NZTA.”
Financial information should be held by NZTA under public records and official information laws. “Not being able to quickly and easily access this information is problematic,” it said.
The summary added: “There are obvious issues with how expenditure has been, and continues to be coded and described, making analysis and understanding of total spend by category difficult, if not impossible.
“Given the same parties are involved across multiple alliances similar practices may be mirrored across other alliances.”
NZTA responds
NZTA’s national manager of maintenance and operations, Andrew Clark, said the agency undertook further analysis with the TREC alliance after the preliminary review, and had “reinforced” existing controls around spending and governance.
In a statement, he said changes introduced from March 2025 focused on “strengthening requirements for documentation, coding discipline, and the accessibility of records”.
Internal audit teams now reviewed monthly claims more closely, Clark said, to ensure expenditure was properly coded, supported by evidence and stored on official NZTA systems for audit access.
NZTA also reviewed the accommodation, office and fleet-related spending identified in the preliminary inquiry and concluded that while record-keeping and cost visibility was inconsistent, the expenditure itself was broadly justifiable given emergency conditions following Cyclone Gabrielle.
Scrutiny of alliance contracting has intensified following two scathing reports into Wellington Water, which is owned by the region’s councils.
The reports found the organisation had been paying contractors, including Fulton Hogan, more than necessary for some repair work, identified weaknesses in procurement and tendering processes, and said the system was vulnerable to fraud risks.
And in 2024, a review into Queenstown Lakes District Council’s Whakatipu Transport Programme Alliance with NZTA found the council was “blindsided” by cost overruns across major infrastructure projects worth about $500m.
The Serious Fraud Office is also investigating allegations of financial discrepancies of between $700,000 and $1.3m, conflicts of interest, and preferential treatment of a subcontractor within the contractor alliance responsible for Auckland’s 200km motorway network.
And a separate preliminary integrity report from NZTA identified more than $5.1m in unapproved or contested contract variations on the $84m Te Ara Tūtohu (Waitara to Bell Block) route improvements project in Taranaki, alongside a disputed invoice that appeared to have billed for hours worked by a staff member while she was on leave.
Earlier this month, Bridges wrote to Transport Minister Chris Bishop to confirm he had commissioned an external review into its “integrity processes”.
He wrote: “Following our discussions this week relating to NZ Transport Agency Waka Kotahi's (NZTA) handling of alleged financial discrepancies and contract management practices within its alliances and/or roading projects, I am writing to you to confirm that the Board has taken steps to initiate an external review.”
The scope of the review was the “complaints handling settings across NZTA’s infrastructure-focused investigations, including the six alliance matters along with third-party contractors”.
A draft report would be ready by the end of June.
The agency has also commissioned a separate review by Wellington barrister Samantha Turner “to identify how its processes and practices for dealing with protected disclosures could be improved”. That’s also due in June.