Council finances review

An advisory firm specialising in insolvencies and corporate recovery has been hired to look into the Christchurch City Council's finances.

Mayor Lianne Dalziel has confirmed that KordaMentha, which is headquartered in Australia but has an office in Auckland, has been contracted to conduct an analysis of the council's financial position. The move follows her pre-election pledge to "open the books".

KordaMentha are insolvency and turn-around specialists and have worked on some of Australia's most high profile corporate recovery projects. Most notably the company, which has a forensic arm, acted as the administrator of Ansett - a group of 42 companies with 15,000 employees and more than $1 billion in assets.

Dalziel said she had personally driven the selection of KordaMentha to carry out the financial analysis.

"I took soundings before the election and people agreed that they had the skill set we require. They will take a hard look at the council's true situation."

One of the tasks KordaMentha has been asked to do is to provide a plain English summary of the council's finances which can be easily understood by ratepayers.

The earthquakes have put the council under unprecedented financial pressure. Over the next 30 years it is set to borrow around $2 billion - a figure some say is too high.

Acting council chief executive Jane Parfitt this week acknowledged that the council's finances were tight. "The council's finances will be under pressure and priorities may need to be revisited".

The results of KordaMentha's analysis are expected before Christmas.

The Press