Fraud investigation after Auckland cake decorator wins contract to build Franz Josef's new sewage plant

Cake decorator heads plans for sewage plant in Franz Josef. Photo: File

A fraud investigation is under way after a South Auckland cake decorator was awarded a multi-million dollar contract to build a sewage plant in Franz Josef after flooding last year wiped out its sewage ponds.

Fairfax has reported Techno Economic Services, a new business, was given the Westland District Council project in mid-2016, despite having no track record in waste management or construction services.

When it was given the tender, Fairfax said, it was not a registered company and was only registered with the Companies Office several months after.

Its director and shareholder is Neha Bubna, who is also the director of Cake Culture, based in Waiuku.

Fairfax reported the process was overseen by council assets manager Vivek Goel, who was stood down last month as a Serious Fraud Office investigation into his activities began.

Goel, it was reported, organised tenders and supervised contracts for council projects such as wastewater treatment.

The project awarded to the South Auckland cake decorator was not put out to public tender, Fairfax reported.

It was understood three companies were approached for expressions of interest in the project, including Filtec, a nationwide water and wastewater company that has operated on the West Coast for almost two decades.

It's understood the company expressed interest in the new Franz Josef wastewater system job last year, but was not successful.

The company declined to give Fairfax comment on the issue.

Opus Consultants had been hired after the flooding for options on a new plant, and reportedly recommended a plant be built outside of the flood hazard zone with a cost estimate of $6.8m to $7.3m.

It did not recommend a specific contractor.

Fairfax reported Goel's recommendation was a specific $7m sewage plant plan, which would have cost Franz Josef's 240 ratepayers more than $28,000 each - excluding the estimated $150,000 annual cost of running the plant.

The council at the time approved the plan as it progressed from stage to stage, despite intense opposition from the tiny Franz Josef community, but Fairfax reported before the contract could be finalised a new council was elected.

In November last year, the incoming council and Mayor Bruce Smith rejected the deal.

Fairfax reported the council has instead opted for a plan to build oxidisation ponds at a cost of about $1m.

Bubna confirmed with Fairfax her company was the successful contractor.

When asked about the nature of the deal she told the media company she had no knowledge of the multimillion-dollar deal.

She also said the work had been outsourced to a manager, but didn't reveal who it was before ending the conversation with the Fairfax reporter.

Smith wouldn't talk to Fairfax because of the ongoing SFO investigation.

The SFO said it would not be making any further comment about the "ongoing investigation".

Former Mayor Mike Havill said his council had not officially approved any contracts 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," he told Fairfax.

Goel has reportedly been on leave since February. Council chief executive Tanya Winter's contract was not renewed at the same time. However, she remains in the role until her contract expires in September.

According to Fairfax, Techno Economic Services had the contract to upgrade the water treatment plants in Whataroa, north of Franz Josef, and Kumara, north of Hokitika - but no work has begun.

The Companies Office register shows Goel has a string of failed businesses, including Anvik Liquor, Goel Holdings, Sai Super Mart and Sai Aden Investments.