Tauranga Council slated over failed transport hub

The failed Harrington Street transport hub is awaiting demolition. Image: John Borren/SunLive.

A damning report from the Auditor-General has criticised Tauranga City Council over the failed Harington Street transport hub project.

In today’s letter to council chief executive Marty Grenfell, it’s stated that “price was prioritised over ability” when selecting the tender for the project.

“There was no business case or any overall procurement plan for the project,” states Office of the Auditor-General manager inquiries Dave Lemmon.

The Auditor-General notes that elected council members had not settled on the final design and intended outcome for the project before procurement started.

They also state that no risk assessment for the procurement plan and no written procurement plan happened.

“Little if any consideration seems to have been given to the approach to procurement for the project overall,” states Lemmon.

Regarding structural engineering, the Auditor-General’s office is critical of a process which saw the documentation and timeframe for the procurement of a structural engineer stretch over just 17 days.

“Some tenders appeared to have been evaluated based only on price and without assessing the tenderer’s ability to meet the tender requirements,” says Lemmon.

However, the result has been the opposite.

“In the end, the council will have nothing to show for the money it has spent,” says Lemmon, at the start of the letter.

It was estimated that it would cost $9.8 million to demolish the building and restore the site. The council decided not to demolish the building, and instead on March 19 sold it to Waibop (Harrington) Limited, a subsidiary of the lead project contractor, Watts and Hughes Construction Group Holdings Limited for $1.

Selling the unused material and structural steel and the negotiated settlement of the construction contract resulted in a final payment of $200,000 to the Council.

Council CEO Marty Grenfell says he welcomes the letter and recognises the failures in the procurement and management of the project.

“Prior to the Auditor General’s interest in this matter, we had commissioned two independent reviews and the recommendations from these, and the Auditor-General’s letter, are in the process of being implemented,” he says.

“We have put in place a range of measures to improve project delivery, governance and procurement processes. This has included the disestablishment of a standalone Project Management Office and the transfer of direct accountability for delivering capital projects to the business units which will ultimately be responsible for the asset.

“Central to this reform is the new Capital Programme Assurance Division (CPAD) and new Procurement Policy.

“The draft Long Term-Plan has an extensive programme of capital projects and the creation of CPAD will support our project delivery with increased capability, expertise and confidence.”

Lemmon concludes his letter, “I will be interested in what progress is made with the improvements to policies and procedures, especially as they relate to procurement.

“Although there is often pressure to complete projects quickly and for least cost possible, obtaining value for investments such as this one can require time, expertise, and the discipline of good procurement and project management processes.”

In March the council also initiated a complaint against the building designer with the sector’s professional body, Engineering New Zealand, in relation to the failure to provide a compliant building design.




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13 Comments

Tom Ranger

Posted on 28-05-2021 14:11 | By Tom Ranger

@morepork. One dollar. OMG lol - Corrupt.

Someone should resign

Posted on 28-05-2021 10:52 | By olemanriver

It is one of many failed projects. This should cost someone in government employ their job. Toss out the boss because ultimately the responsibility is his. Then reassign or retire the rest. Have a clean sweep.

@Tom Ranger

Posted on 27-05-2021 21:08 | By morepork

Never suspect nefarious action, when ineptitude is far more likely. (Not saying no corruption is involved, but I hope there’s not...) I liked the use of "Business Case" in the Auditor’s report; this seems to be a term that TCC never heard of. "We don’t need a Business Case; it will look so cool...Let’s just do it..." Quality control, peer review, monitoring KPIs? All standard Business practice. But not for our lot...There are 2 main factors missing with our Council (apart from ensuring that competent people are in the right jobs); TRANSPARENCY and ACCOUNTABILITY. Wouldn’t you think Commissioners would be talking about RESPONSIBILITY? Have you heard them? I haven’t... I would LOVE to hear if anything mentioned here is, in fact, used in SOPs by our Council. I would be very pleased to be wrong about this.

Accountability

Posted on 27-05-2021 16:23 | By Fernhill22

In every other business there would be accountability for people’s actions & in this case what would amount to gross negligence. We have had so many failed projects that have been delivered but no accountability for these. We have had Councillors & the Mayor acting like children & wanting to have fisti-cuff’s in the playground. These actions just would not be tolerated in any other business or corporate environment. Who is policing what is going on in Council, and making people accountable for their actions??? Who is reviewing the tendering process, the contracts to the preferred providers, the cost overruns, and failed projects that haven’t delivered value for money to the Rate Payers??? If you worked in the Corporate world and failed to deliver a project on time & on budget you would more than likely lose your job. Where is the accountability in TCC??

Tom Ranger

Posted on 27-05-2021 11:55 | By Tom Ranger

@Kancho. That is a fair assessment of peoples opinions. I say that too. Realistically though...If we strongly protest ALL rates increases of any sort (Stealth or not). We will get what you/we are asking for. Pulling the "line in the sand" more in the direction of what we need. Selling of this valuable work to (Watts and Hughes) for 1$! amounts to theft and conspiracy between council and their preferred contractors of W&H. I will not support them continuing the formula they are using in any way. Corruption!

Hopeless

Posted on 27-05-2021 11:29 | By Told you

I hope they use a different method to design Cameron Rd than they used on the parking building it is obvious their modelling is all wrong.

Poorpen

Posted on 27-05-2021 08:42 | By Poorpen

The CEO and those responsible for this disaster should be sacked. In the real world they would be removed very quickly.There are no consequences for council stuff ups,so it keeps happening.And Cameron road will be to.

Wow, so what punishment?

Posted on 27-05-2021 07:51 | By jed

People in council earn insane money for extremely secure jobs...yet, I don’t see any accountability. Ratepayers are getting smashed but council arrogantly want 20% rate rises, on top of my 15% rise last year. Then you get the people who say we must have rate rises to improve the city, but , my rates are already insanely high (over 9k a year plus regional council plus water). Unliveable Tauranga.

Local

Posted on 26-05-2021 21:45 | By Considered

WHY is it that Tauranga City Council continue to make these incredible costly mistakes over and over again, and then they (and the commissioners) expect the ratepayer to finance the burden ? ? ? I would have thought that if TCC is the local government, why isn’t Central Government coming to the party to stump up the coin to get these things fixed... Tauranga residents and ratepayers are not at fault here, so why are WE being punished?

@ Tom your opinion

Posted on 26-05-2021 21:19 | By Kancho

I’m not against rate increases as costs do go up. What I would like is better decisions, focused priorities and of course good value for every dollar. As I have said before most businesses have a cost control quality improvement policy a kpi reporting strategy. Sadly not sure the council has demonstrated good business methodology . To many glaring mistakes and big problems skirted around. I think the gist of what Tenby said if it were a business it would be bankrupt. I think that is so in more than financial terms.

What an inept bunch

Posted on 26-05-2021 21:11 | By The Sage

Mistakes of this magnitude are totally beyond belief. Now we have no Mayor and a Government appointed Commission costing trillions, to do what I am not quite sure. Is anything actually being sorted, rubbish, Greerton debacle, Mount carpark, Bella Vista, to name but a few. Meanwhile our rates are tipped to be going up 17%. What on earth is going on in Tauranga. Meanwhile people with relatively minor concerns have to leap through hoops. Keep taking the tablets.

Tom Ranger

Posted on 26-05-2021 18:26 | By Tom Ranger

AND THIS IS WHY WE CURRENTLY PROTEST RATES INCREASAES OF ANY SORT IN TAURANGA!!!!!!!!!!

Smoke

Posted on 26-05-2021 17:39 | By Slim Shady

The structural design was at fault so tendering and price point for construction is irrelevant. This is just throwing shade on elected Council to justify their removal by the Central Committee. The CEO and all the faceless money grabbing “managers” are still there and are being given big bucks to build their empires. None of which would have made any difference to this outcome.

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