Auditor General concludes Transmission Gully conflict of interest probe

Transmission Gully is now due to open late next year. Photo / Mark Mitchell

The Auditor-General says both NZTA and its chairman took reasonable steps to manage a conflict of interest during a multi-million-dollar Transmission Gully settlement agreement.

Prior to his appointment as Waka Kotahi NZTA chairman in June 2019, Sir Brian Roche was a director of the Wellington Gateway Partnership.

Transmission Gully is being built through a public private partnership, with the Wellington Gateway Partnership being the private group of financiers and companies contracted to finance, design, build, and operate the road.

Roche resigned from the partnership when he was appointed to Waka Kotahi's board.

The 27km four-lane motorway has been the subject of delays, settlements worth hundreds of millions of dollars, and has been accused of being run like a circus.

In February this year NZTA agreed to pay $191 million to the joint venture following the 2016 Kaikōura earthquake, and flooding around the same time.

Today Auditor-General John Ryan issued a public statement in response to correspondence his office had received, which raised question about the settlement payment and how Roche's conflict of interest had been managed.

During work to decide whether an inquiry into the settlement was needed, NZTA reported Roche was not involved in any board discussions or decisions about Transmission Gully throughout his first year as chairman.

Waka Kotahi NZTA chairman Sir Brian Roche. Photo / Mark Mitchell

Board minutes show he declared his conflict of interest at the beginning of each meeting and then he left the room while related matters were discussed and decided.

Other board members chaired meetings during these times.

NZTA also reported there were strict measures in place to restrict Roche's access to confidential information about Transmission Gully.

The Auditor-General cannot make a legal ruling on whether someone has a conflict of interest, or acted appropriately in relation to a potential conflict.

However, the office has a strong interest in supporting good practice as it is considered a fundamental part of maintaining public confidence in the public sector.

"Based on what we have seen, including through our annual audit work, both Waka Kotahi and Sir Brian Roche appear to have taken reasonable steps to manage Sir Brian's conflict in the lead-up to the $191 million settlement agreement", Ryan said.

After interviews, regular updates, a review of documents, and annual audit work, the Auditor-General has decided not to inquire further into the settlement or the Transmission Gully project at this stage.

"Instead we will continue to monitor developments with the project, including the outcome of a Government review of the project that was announced in August 2020", Ryan said.

Transmission Gully construction works at Paekakariki. Photo / David Haxton

That review was ordered the same day NZTA announced a second considerable settlement over the troubled project

In August the Transport Agency announced the opening of Transmission Gully would be delayed until September 2021 after the latest round of settlement negotiations concluded to the tune of $208.5 million.

The Infrastructure Commission is overseeing an urgent and wide-ranging review into the project, with an independent expert reviewer appointed to do the work.

Its scope will focus on how the Transmission Gully project was awarded for the agreed price and whether it was actually realistic.

The probe will also consider whether identified risks were appropriate and properly taken into account.