Westland District Council manager awarded cake decorator's firm $7 million contract to build sewage plant
A new business, run by a cake decorator, which had no track record in waste management won a Westland District Council project to build a $7 million sewage plant in Franz Josef, a Stuff investigation has found.
Techno Economic Services, which is based in South Auckland, won the council project in the middle of last year, despite never having provided waste management or construction services before. The company was not a registered company at the time it won the tender. It registered with the Companies Office several months after securing the Franz Josef job.
Neha Bubna, the sole director and shareholder of the company, runs a cake shop in South Auckland, specialising in birthday and special occasion cakes. She is a recent migrant from India.
The process was overseen by Vivek Goel, the council's assets manager who stood down last month as a Serious Fraud Office (SFO) investigation into his activities began. The SFO has declined to discuss the allegations against Goel.
Goel was in charge of organising tenders and supervising contracts for council projects such as wastewater treatment.
The project was not put out to public tender. It is understood three companies were approached for expressions of interest in the project.
Filtec, a nationwide water and wastewater company that has operated on the West Coast for almost two decades, expressed interest in the new Franz Josef wastewater system job last year but was not successful. The company declined to comment.
In March 2016, Franz Josef was hit by flooding which wiped out the town's sewage ponds. The Westland District Council then looked for options to rebuild Franz Josef's wastewater facilities.
Goel repeatedly recommended a specific sewage plant plan to council, which would cost about $7m.
Opus Consultants, hired by the Westland District Council to advise it on options for the plant, recommended a compact, high rate, mechanised biological plant sited out of the flood hazard zone – such as that proposed by Techno Economic Services – with a range of cost estimates from $6.8m to $7.3m.
It did not recommend the exact site or cost, nor did it recommend a specific contractor. Opus declined to comment, saying it was subject to a confidentiality agreement with the council.
Goel's recommendation would have cost each of Franz Josef 's 240 ratepayers over $28,000 each, excluding the costs of running the plant which was estimated at $150,000 a year.
The previous council approved the plan as it progressed from stage to stage, despite intense opposition from the tiny Franz Josef community. Before the contract could be finalised, a new council was elected and in November the incoming council, led by Mayor Bruce Smith, rejected the deal.
The current council has opted for a plan to build oxidisation ponds at a cost of about $1m.
Bubna, who runs a small cake business called Cake Culture in Waiuku, a town 60 kilometres south of central Auckland, said her company had never provided waste management services before the Franz Josef tender.
She confirmed her company was the successful contractor.
"Yes, this was our first one," she said this week.
When asked about the nature of the deal Bubna said she had no knowledge of the multimillion-dollar deal.
"I'm not too sure about the answer," she said.
Bubna said she had outsourced the work to a manager, but she would not reveal who that was.
"I'm not too sure why I should be talking to you," she said, before hanging up.
Stuff contacted her by email seeking more details but she did not reply.
Mayor Bruce Smith declined to comment due to the ongoing SFO investigation into Goel's activities at the council.
Former Mayor Mike Havill said his council had not officially approved any contract and that he did not know about any deal Goel may have struck with contractors.
"It's one of those things. Time will tell us whether there was fraudulent activity or there wasn't. I'm not in a position to judge."
When asked if he knew that Techno Economic Services was run by a cake decorator from South Auckland, he said he did not.
"Given the investigation by the Serious Fraud Office, nothing surprises me."
Goel has been on leave from the council since February. Council chief executive Tanya Winter's contract was not renewed at the same time, but she continues to work as chief executive until her contract expires in September.
Just prior to Goel's period of leave, council staff confirmed that Techno Economic Services had been awarded the contract to upgrade water treatment plants in both Whataroa, just to the north of Franz Josef, and Kumara, which is just north of Hokitika. Havill said his council had not approved this contract.
According to the council no work has begun in either Kumara or Whataroa.
The Stuff investigation shows Goel has a chequered history, including a string of failed businesses, a bankruptcy and a Tenancy Tribunal hearing in which he was forced to pay $650 in damages to a landowner.
His companies, originally based in Auckland, included Goel Holdings, Anvik Liquor, Sai Super Mart and Sai Aden Investments.
In February 2006, Goel declared bankruptcy and all his businesses were liquidated.
Goel then started some new companies, including Sai Advisory Group, established under his wife's name, and Sai Property Group.
A Tenancy Tribunal hearing in 2012 found that Goel had caused damage to a property he was renting in Kaniere Road, just out of Hokitika, and ordered to pay $650 in damages.
Goel's family also has commercial interests in Hokitika.
His father, Vijay Goel, owns a liquor store on Hokitika's Tancred St. The store is branded as Brews, part of a nation-wide chain of liquor outlets.
Vivek Goel advertised for staff to work at the liquor store on a Facebook page for West Coast jobs after the consent had been granted.
Goel's personal property has also raised questions in his local community.
His house in the outlying suburb of Kaniere has gold lettering emblazoned on the fence saying, "Sai House". To many in the Indian community, this indicates a place of religious worship – there is a Sai House in Auckland, and many worldwide.
Sathya Sai is a worldwide charitable religious organisation founded by the Indian prophet Sai Baba and followed by millions. It has loose ties to mainstream Hinduism, but some claim it as an inter-faith religion of its own.
Stuff spoke to Sathya Sai New Zealand, who said it had never heard of a Sathya Sai branch in the Hokitika region.
Stuff also spoke to members of Hokitika's Indian community, who said they had never heard of any Sathya Sai religious congregations taking place at the property.
Attempts to contact Vivek Goel were unsuccessful.
* An earlier version of this story incorrectly stated Tanya Winter left the Westland District Council in February, and named former mayor Mike Havill as Durham Havill.