Tasman engineering revamp 'could save millions'

00:42, Jul 27 2012

A significant restructure of the Tasman District Council's business practices could save ratepayers millions of dollars but may come at a cost with at least one of the region's businesses likely to miss out on a key contract.

The Richmond branch of international engineering consultancy Montgomery Watson Harza could be the biggest loser when the council completes a review of its engineering services. MWH is contracted to provide consultancy services for a wide range of the council's engineering services including roading, river and coastal protection works, water supplies and wastewater systems.

However, council chief executive Lindsay McKenzie said at a full council meeting in Richmond yesterday that they were looking at bringing most of those services back in-house. He said the preliminary findings of a review of engineering services had shown the move would have both financial and non-financial benefits for council.

Although a full report would not be presented to council until September, there were strong financial reasons for returning to an in-house delivery of engineering services, he said.

It was too early to say how much it would save council although Mr McKenzie said they were spending "about $1 million a month" at MWH.

MWH won the contract in 2000 after the council cut 17 staff from its engineering department and put their services out to tender.


"We have just crunched the numbers and the financial reasons are self evident," he said. "It's a straight business case assessment of in-house delivery versus externally provided.

"If you take all the costs into account, the answer is fairly straight forward."

MWH acting New Zealand director Steve Jones said they were aware of the council's decision to "bring a number of services back into their organisation and we remain committed to supporting council to ensure a smooth transition".

"MWH looks forward to continuing to invest in and contribute to the community through future work with Tasman District Council and other organisations in the area," he said.

MWH employs 50 staff in Richmond.

Mr McKenzie said that MWH would still play a significant role in the council's engineering services. Its staff would be required for the specialist, high-end projects.

Councillors would discuss the engineering services review at a workshop next month before the report would be tabled at a full council meeting in September.

The formation of a memorandum of understanding on shared services with the Nelson city and Marlborough district councils was also approved and Mr Kempthorne said that could result in increased efficiencies and savings to all three councils.

However, Mr Kempthorne conceded that there could be some "tensions" involved with establishing shared services.

"A lot of smaller contractors could potentially miss out . . . but they live and spend their money in our community so that has to be taken into account."

The Nelson city and Marlborough district councils were to discuss the memorandum within the next few weeks.

The Nelson Mail