Finance Minister Nicola Willis speaks about KiwiRail cancelling its mega Cook Strait ferry contract with the South Korean shipyard Hyundai Mipo Dockyard.
Video / Mark Mitchell
Willis said the spend was “excessive and not justifiable” and she would have problems defending it in public.
Newshub has reported it understands the cost was $8 million.
KiwiRail maintains the cost is commercially sensitive but a legal expert has questioned that position and the Herald has complained to the Ombudsman arguing the figure should be made public officially.
Willis told reporters yesterday she didn’t think an organisation with highly paid executives such as KiwiRail should have to spend a sum as big as it did on external consultants for advice on how to run its core business.
“Of course, from time to time, people need to pay specialist consultants for specialist advice but from what I’ve seen, this was straightforward advice.
“Frankly, if I were on the board, I would have been asking why couldn’t my executive come up with this themselves.”
Willis was asked whether she has confidence in the board and KiwiRail chief executive Peter Reidy.
“Ultimately, it is for us to have confidence in the board. The board decides who their executive and management are and as we announced at the weekend, the chair of KiwiRail has retired early from that board,” Willis said.
“We will be refreshing that position and we will be looking to refresh the board more generally to ensure it has the skills and expertise needed to lead that organisation into the future.”
Asked if that meant other board members could be losing their jobs, Willis said that could be the case.
KiwiRail chairman David McLean has announced he will be leaving his position early. Photo / Mark Mitchell
In his statement on Sunday, McLean said he was stepping aside from the start of the new financial year because that was best for KiwiRail as it entered a new phase of its development.
“I understand the Government intends to announce my retirement today, so I have brought my announcement forward.”
The board is appointed by its shareholding ministers, being Willis and Minister for State Owned Enterprises Paul Goldsmith, and the performance of KiwiRail is accountable to those ministers.
Shareholding ministers may jointly remove directors at any time and entirely at their discretion.
Victoria University Faculty of Law Associate Professor Dean Knight said commercial confidentiality was not necessarily absolute.
There are cases where the public interest in disclosing the information could trump the commercial reasons for withholding it, he said.
“I would have thought there is significant public interest in knowing the quantum of public money spent by a state-owned enterprise on consultants, especially when the minister is concerned they are outsourcing business-as-usual work that ought to have been done in-house.”
Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.
