Council keeps settlement under wraps

Whanganui District Council chief executive Kym Fell

ANY money Whanganui District Council has received from its legal action against global engineering consultant MWH will remain under wraps ... for now at least.

The council yesterday refused a Chronicle request to release details of the mediation process with MWH over its design of the city's failed wastewater treatment plant, including what - if anything - council had been paid by way of compensation.

The council decided in July 2013 to sue MWH over the troublesome plant, commissioned in 2007.

It cited shortcomings in the concept and final design of the Airport Rd facility, though MWH has always denied it was at fault.

Early reports suggested the council - which earlier this month decided to replace the plant at a cost of $38 million - was seeking up to $10 million in compensation. The Chronicle made its request under the Official Information Act and received the council's rejection yesterday.

We had requested information about how much MWH paid council to settle the dispute, and when the payment had been made or would be made.

The Chronicle had argued that it was seeking the information because there was "huge public interest in this issue given our rates have been spent on the failed plant, it's a publicly-owned asset, any money from the settlement is public money".

The council did disclose that during the course of proceedings it was awarded costs of $6727 on February 12 following its successful defence of MWH's strike-out application - a move which got both parties to mediation and ultimately settled the claim. Up until the end of December, the council had paid its lawyers $860,000 to pursue the action.

Council chief executive Kym Fell yesterday acknowledged that there was a community interest in the wastewater treatment plant and the construction of the replacement plant.

"However, council is, to a degree, bound by the terms of the agreement, one of which requires parties not to disclose the terms of the agreement to any third party without the written consent of the other parties," he said.

"Council sought the view of MWH in respect of the Chronicle's request and MWH (said) they do not consent to the request to obtain the detail.

"Accordingly, in order to comply with the terms of the agreement council must refuse your request."

Mr Fell said there were a number of factors in favour of maintaining confidentiality, including a concern that breaching it could prejudice future settlements with other parties through mediation. "It's in the community's interest that its council is seen to honour the terms of settlements through mediated processes. The release of the information does not in any way change the need for council to construct a new treatment plant."

Mr Fell said under terms of the Local Government Official Information and Meetings Act 1987, the test was not whether there was a public interest in disclosure of the information, but the considerations favouring the release of information in the public interest outweighed the interest in withholding the information. "Council has given considerable thought to this request. While there may be public interest in disclosing a term of the settlement agreement, council has concluded that maintaining confidentiality of the settlement outweighs that public interest."

The Chronicle will ask the Ombudsman to investigate and review the council's refusal to release the information.