An Auckland Council IT project considered key to delivering the promised savings of the "Super City" model faces a budget blowout of up to $100 million.

The "NewCore" programme is designed to consolidate the outdated operating systems of the eight local bodies that merged in 2010 to become the Auckland Council and has an approved budget of $71 million.

The first stage was supposed to go live in May with the project completed by June 2016, but council bosses yesterday confirmed a delay of 12 months.

Chief operating officer Dean Kimpton also confirmed more money was needed but would not comment on specific figures as councillors were discussing a briefing paper behind closed doors today. But sources say the total cost could end up between $140 million and $170 million - up to $100 million more than the budget approved two years ago.


The Herald has learned of a $13.2 million IT contract with a third party being rushed through the tenders and approval committee behind closed doors in September.

Up to six other parts of the project will also be outsourced but Mr Kimpton downplayed the extra costs, which he said would come from $500 million previously budgeted for IT over the next 10 years.

"Not everything has gone smoothly ... but these are tough projects," said Mr Kimpton, who has recently taken control of the project.

"We're better off taking longer getting it right than doing it quicker and screwing it up." Lessons had been learned from other troubled IT projects, such as Novopay, and Mr Kimpton said several factors caused the delay. Chief among these was the technical complexity of amalgamating the systems inherited from the eight previous councils in Auckland, none of which were suitable as a starting point.

The scope of the project had also increased, said Mr Kimpton.

"There is a delay and it will cost more. But we'll also be delivering much more."

In November 2012, former chief finance officer Andrew McKenzie and IT manager Mike Foley assured councillors the total cost of the NewCore programme was $71 million, made up of $58 million capital works and $12.9 million operating costs.

The slideshow presentation to councillors described NewCore as a "a key part of our journey towards delivering the value of one council and a transformed customer experience".


Once completed, the project is supposed to make life easier for anyone dealing with the council and, over time, save ratepayers millions of dollars.

Mr Kimpton yesterday gave the example of lodging a resource consent application. Currently, someone would have to visit a council building, with documents, lodge the application in person and then make a separate payment. The files would be physically shifted from desk to desk as the application moved through the system.

Mr Kimpton said that once NewCore was live, the whole process would be managed online.

The delay and new budget will be discussed in secret by councillors at the finance and performance committee today because of a motion to exclude the public due to "commercial sensitivity".

Councillor Cameron Brewer said Auckland ratepayers had heard nothing about this "massive project" for exactly two years when councillors approved $71 million.

"Everything has been behind closed doors since which is a real worry.

"I don't accept that escalating costs relating to this key IT project cannot be publicised, nor any of the issues publicly discussed," said Mr Brewer.

"We're told it's all to remain in secret because of commercial sensitivities, but this is a stack of public money. What's more, this whole project has been deemed a significant transformational project for Auckland Council and the way it services the region."

The NewCore blowout comes a week after a new computer system built to deliver the new property valuations crashed due to a surge in traffic.

The extra money for back office computer systems also coincides with proposed average household rates rises of 5.6 per cent next year and cuts to core services, including transport, parks and community services, in a new 10-year budget.


What is the NewCore programme?

NewCore is an IT project to merge the outdated systems which Auckland Council inherited from the eight local bodies that were amalgamated into the "Super City".

How will it make life easier?
Essentially by making processes more of a "one-stop shop". For example, someone lodging a resource consent has to visit a council building, with documents in tow, lodge the application and then make a separate payment. The files are then physically shifted from desk to desk as the application moves through the system. Once NewCore is live, the whole process would happen online.

When will NewCore be finished?
The first stage was supposed to be ready by the middle of this year and the whole project complete by mid-2016. But this will be pushed back by 12 months.

What's the holdup?
IT engineers have discovered merging the eight systems from the previous councils to be more complex than originally thought. And not one of the existing systems was considered a good starting point. Project leaders were also wary of falling into the same traps of other troubled IT projects, like Novopay, and the scope of NewCore has grown.

So, how much will this cost?
Two years ago, councillors approved a budget of $71 million. But more money is needed because of the delay and need for some of the work to be outsourced. The costs will be discussed behind closed doors today but Herald sources say the total cost could rise to between $140 million and $170 million.