Sorry State of Mangawhai Sewerage,Supergold Card Travel Denials Refuted
There needs to be a corrective history of how this sorry saga came about.
• About 14 years ago the Beca group became head consultant for the Mangawhai sewerage project, it evaluated
tenders, and awarded the tender to itself, receiving $675000 of ratepayers’ money to manage the bid process.
• The Beca group in association with the council’s chief executive officer Jack McKerchar settled on Simon
Engineering from Australia as the preferred bidder.
• Simon Engineering had claimed experience in dozens of engineering projects in Australia like Mangawhai.
• Simon Engineering had no such experience other than a trailer park equivalent to a single subdivision in
• Councillor Bruce Rogan sought a referral from one of Simon Engineering’s purported happy customers in Australia
• This cautious request was attacked by Beca group project group leader Johnson and the Mayor and no information
• In 2002 the local government amendment Act banned the concept of a 25 year old –build-own-operate-transfer
• Neither Beca or the chief executive observed the law change because the deal had already been secretly committed
• Councillor Rogan’s request that Simon Engineering be warned of exceeding its budget was ignored by the chief
executive officer who later said that his failure to follow a council resolution was because it might have frightened
• Councillor Rogan directly advised Simon Engineering of the council resolution, which caused the company to bolt
and financially go belly up.
• What remained of Simon Engineering’s skeletal remains morphed into a new creation Beca-Simon which promoted
itself as a multinational infrastructure builder
• So the project manager became the builder, or put it another way, had now organised a contract with himself.
• In time the contract ended up with Water Infrastructure Group now running the entire waste water system project.
• Quarterly reviews were denied the Kaipara councillors under threat of legal action.
• Some councillors were asking difficult questions of the relationship of Mr McKerchar and a council staff
employee working on the planning for the sewerage scheme.
• The council employee transferred from the council to the Beca group who then contracted her back to provide
services to the Kaipara council.
• Another sewerage scheme on the west coast of Kaipara went to the same contractors for $7 million despite the
financial blow out on the Mangawhai scheme, or that another proposed tenderer at $5 million was warned off because of
the affect that this tender might have on the roading contracts in the Kaipara district the following year.
• The Auditor-General was aware of the chief executive officer-council employee-cum Beca employee connection but
she did not think it was relevant.
• Staff at the council lived in fear for their positions if they questioned decisions. And the chief executive
officer, when appointed commissioners took over the council, was given a $240,000 handshake.
Ladies and gentlemen this is not the script for a novel or a bodice-ripping bestseller. This is a sorry litany of
negligence, corruption and coverup.
The Simon Engineering connection puts one in mind of Novopay, another bunch of Aussie Ned Kellys, who took over our
education payroll system despite having no experience in that business whatsoever. Costs have blown out to around $60
million, some teachers are still not getting paid despite the government picking up the skeletons of Novopay.
New Zealand First, as a result of extensive investigation, discussions, and analysis, opposed the Kaipara District
Council (Validation of Rates and other Matters) Bill.
The National Party, Labour, Greens, Māori, ACT and United Future parties all supported it.
Hone Harawira, believing that New Zealand First was on to something, opposed it as well.
Illegalities in entering into loans are not mere technicalities or formalities but go to the heart of local government’s
obligation to consult ratepayers before entering into large financial commitments.
Especially where the rates can be set to cover illegal loans.
In Kaipara's case community consultation stopped at $34 million. But the scheme’s cost ended up being far more than
double the price.
Contractors have taken large margins. The ANZ bank acquired the original loans at a 40%mark down, clearly having done
some due diligence on the whole scheme. But that bank is insisting upon the full loan. Where Beca Group sits in this is
a good question requiring answer. They were contracted to manage the project so why are they not taking a haircut as
But the key issue here is what is the responsibility of central government in this sorry mess. The auditor general’s
office is a key agency in central government.
Retrospective legislation that is harmful to any party should be an abomination in a democracy.
In this instance, it was used as a device to brush incompetence and corruption under the carpet.
New Zealand First’s view is clear; inconvenient truths should not be buried but exposed to the cleansing light of public
Cover up – deny – and avoid scrutiny whilst the innocent suffer and the guilty walk away unscathed and fully paid.
How the Audit Office allowed five years of clean audits to go through on the Kaipara District Council while the sewerage
scheme racked up so much debt is incredible, especially as some of you were voicing concerns early on.
How the Auditor General refused to consider many questionable matters, saying they were irrelevant, begs the question.
If that is not relevant what is?
The Auditor General’s office has a reputation for integrity but what went wrong here?
Was it that some the participants looked too big to be questioned?
However your political representatives in Parliament, from all parties, except New Zealand First and Mana, were no
They defended the Auditor General and take no responsibility for forgetting about you.
Former Prime Minister Norman Kirk once pointed out to MPs that it was not their job to defend the Government Department
from the people; instead their role was to defend the people from the Department.
He was precisely right. So instead of defending you, 112 politicians rushed to defend the Audit Office, and they went
further collectively sweeping all the wrongdoing under the carpet by voting for retrospective legislation.
The National government has wiped its hands of your problem, as have the other parties and there’s been no attempt to
try and renegotiate the loans, to lessen the load, or step in do their duty by you.
There’s been no admission of the culpability of the Audit Office which should see Central Government pick up the bill
for the bloated cost.
We are 13 days from an election and some of you want New Zealand First to declare its position on Coalitions now. I
trust you now all understand what a betrayal of you it would be to enter pre-election Coalition arrangements without
securing your interests in negotiations first. Or would you prefer someone who is ‘all tea and sympathy’ with no
objective of backing it up.
National and its local MPs, past and present, should be ashamed of their underhand way of allowing the guilty to escape
accountability and leaving you with the cost.
A similar matter is occurring under your eyes where the SuperGoldCard is concerned.
It has a free travel component which is under review in November, after the election.
We know the National Party wants to wind it back, although its annual cost would be a third of the Novopay debacle.
It benefits 630,000 Seniors.
Last night Minister Woodhouse on TV denied our allegations. Well, Mr Woodhouse, how do you explain the discussions
between government and local body transport authorities being held behind closed doors as I speak.
Four years ago the master of Novopay was caught out on a similar denial. And now another Minister, Woodhouse, has been
caught out doing the same.
With 13 days to go before the election you can vote for your political choice and remain with an albatross around your
neck, or can you see with great clarity what you now must do.
Party vote New Zealand First because for you, more than probably any other group in New Zealand
It’s Common Sense