Super City's set-up costs top $200m and counting

By Bernard Orsman

Labour warns a rates rise will follow for Aucklanders. Photo / NZ Herald
Labour warns a rates rise will follow for Aucklanders. Photo / NZ Herald

Aucklanders are shelling out $200 million to build the Super City.

The latest figure includes an admission from Local Government Minister Rodney Hide that it will cost $125.7 million, mostly in information technology costs, to get the new-look council up and running.

Mr Hide has previously been tight-lipped about the implementation costs, which come on top of $34.4 million of operating costs for the agency designing the Super City.

Other costs are $26.5 million to set up a mega-water company and $14.2 million by the region's existing councils. The councils' costs and setting up Watercare will be funded out of current budgets.

Mr Hide, who has been careful not to promise immediate savings to ratepayers from the Super City, said the transition agency and implementation costs of about $160 million were below the mid-point of the $120 million to $240 million estimate by the Royal Commission on Auckland Governance.

He did not take into account the cost of setting up Watercare and councils' costs.

Mr Hide said to put the agency and information technology costs into perspective, Auckland councils currently spent about $90 million a year on IT out of an operating budget of $2 billion.

"The new Auckland Council will be able to provide integrated planning and improved service delivery at a reduced cost," he said.

"The emphasis throughout has been on ensuring no undue burden is placed on the ratepayers of Auckland."

But Labour's spokesman on Auckland issues, Phil Twyford, said it was too early to say what the final cost would be, but it would be more than $200 million.

"What we do know is that Aucklanders will be hit with rates rises to pay for it," he said.

The agency is focusing on nine main IT projects to enable the "efficient functioning of the organisation from day one".

These include a system to support the new governing body and local boards, an integrated call centre and effective planning.

The largest contract is $53.8 million to support day-to-day functions of the council such as human resources, payroll, the financial system and procurement.

The contract has been awarded to a consortium including SAP, Deloitte, Hewlett Packard and IBM after nine parties were invited to tender.

The $94.1 million bill the agency expects to run up before November must be repaid by Auckland ratepayers by November next year.

This could be done by way of a loan to spread the cost over time.

The numbers:

* $200.8m total.

* $34.4m Auckland Transition Agency.

* $125.7m Implementation costs.

* $26.5m Watercare set-up costs.

* $14.2m Council costs.

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