Dispute over undervalued assets

Last updated 05:00 14/04/2014

Relevant offers


No visitor levy but other sweeteners possible - Steven Joyce Union pushes for tighter lift safety rules following death of Wellington man Brendon Scheib Building consents top $2 billion for the first time 'Perception' the problem as super changes bring ageism into sharper focus Chart of the day: Sharp drop in value of exports from Port Taranaki Wellington's Amora Hotel says it is closing for up to 12 months TVNZ outlines newsroom cuts to staff No fine but demolition company director pleads guilty over asbestos danger Fletcher Building is a target for bored investment banks, fund says Budget will bump up NZ's infrastructure spending, finance minister signals

Christchurch City Council staff and councillors are at odds over claims crucial council assets were undervalued before the earthquakes.

The council has given up taking action against Good Earth Matters Consulting (GEM), the firm said to have undervalued council assets at a great cost to ratepayers.

Critics of the firm say city assets including the town hall, former AMI Stadium and convention centre, and many suburban assets, like the Waltham Pool, Sumner Library complex and the Mt Pleasant Community Centre, appear to have been undervalued for insurance purposes by many millions of dollars.

Council corporate finance manager Diane Brandish told The Press there appeared little point in pursuing GEM because it was "in effect" a shell company. "[The] council has focused on efforts to maximise the insurance claims as this will bring the biggest return for the rebuild."

The council "disputed there was an undervaluation" by GEM in 2010 for insurance renewal purposes, Brandish said.

This was a surprise to councillors Yani Johanson and Raf Manji - the finance committee chairman.

Johanson, who has been outspoken about GEM's performance, said the valuation issue was still continuing and of concern.

"There's no doubt in my mind many of our facilities did not have a value attached to them to allow them to be reinstated," he said.

Manji said he had made a formal request last week for council staff to provide a full report on the valuation issues so mistakes were not repeated.

There was no disputing some assets had been undervalued, he said, but it was unclear where liability fell and how redress could be achieved.

The matter was historic and therefore not a high priority, Manji said. He was not sure why Brandish was appearing to back the valuations.

Brandish did not respond to further questions from The Press.

Documents provided under the Official Information Act show GEM, an environmental consulting firm based in Palmerston North, got the insurance valuation contract in 2004. The contract included a requirement for land and buildings to be physically inspected in year one and then every three years.

New valuations were done in 2008 and then the valuations were updated for inflation in 2009 and 2010.

GEM's tender was about $70,000 for three years of valuation services. The contract was rolled over in 2007 for another three years, just before a 2008 Audit New Zealand review said GEM's work had been poor .

The firm has never commented but it got into the valuation business through Christchurch-based Chris Bridges, the brother of the managing director of GEM, David Bridges.

Ad Feedback

At the time of the tender, Chris Bridges worked as a subcontractor for the Australian State Valuation Office, which was awarded the contract for Christchurch's rating valuations in 2002. This contract was handed over to GEM in 2005.

Chris Bridges was a shareholder of Good Earth Matters Consulting up to May 2009 and a shareholder and director of Good Earth Matters Holdings between 2007 and 2012.

At the time, he was also a director of Crown Accredited Property Services, a company set up in 2001 and struck off in February last year.

Chris Bridges managed the tender for the council insurance valuation work and led a team of seven specialists in carrying out the contract.

GEM had a general liability and professional indemnity insurance.

Chris Bridges set up a new company, Market Valuation, in August 2012. According to company records, he is the only director and shareholder.

He declined to talk to The Press.

- The Press


Special offers

Featured Promotions

Sponsored Content