Former Kāpiti Coast District councillor and Government relations consultant Gwynn Compton says the cost should be made public, given Government departments routinely release consultancy spending.
The Herald complained to the Ombudsman, arguing there was significant public interest in the cost, especially because Willis had said she would have problems defending it in the public arena.
However, Chief Ombudsman Peter Boshier was satisfied that the public interest did not outweigh the threat to McKinsey and Company in future negotiations that could come as a consequence of the release of such specific information.
Now, Boshier has written to the Herald advising he is investigating another complaint about a separate refusal to release the same information.
“I want to consider afresh whether this information should be withheld. If I do reach a different outcome, I may need to look at your case again,” he said.
Former Kāpiti Coast District councillor and Government relations consultant Gwynn Compton said it was reassuring the Ombudsman was reconsidering the “bizarre decision”.
Compton wrote to the Ombudsman in January to outline his concerns.
“There’s a clear precedent with other Government entities routinely releasing this same information for consultancy services, on projects with far less public interest, down to a very granular level,” Compton told the Herald.
“This transparency has clearly not impacted on their ability to procure consultancy services and it’s nonsensical to claim that KiwiRail having to do likewise would negatively impact their or McKinsey’s commercial activities.
“To continue to allow KiwiRail to withhold this information would undermine years of established Official Information Act practices and diminish the strength of our transparency and accountability frameworks.”
Compton gave examples of other departments that had released detailed consultant spending.
The Department of the Prime Minister and Cabinet released several years of itemised consultancy spending on companies such as Deloitte and KPMG. Descriptions of the work were provided, such as health and safety reviews and the Christchurch stadium feasibility study.
Victoria University Faculty of Law professor Dean Knight has said commercial confidentiality is not necessarily absolute.
There are cases where the public interest in disclosing the information could trump the commercial reasons for withholding it, Knight 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.”
KiwiRail has always maintained that the consultant spend is commercially sensitive. Photo / KiwiRail
In earlier correspondence with the Herald, the Ombudsman’s office explained its initial position on KiwiRail’s refusal to release the information.
Investigation and resolution team acting manager Penny Eathorne said KiwiRail had submitted that releasing the cost would disadvantage the company in any negotiations for consultancy work in the future.
“The Ombudsman is likely to agree that there is public interest in ensuring the integrity of the tender process involving State-Owned Enterprises, in this case, KiwiRail needs to be accountable for the expenditure of public money.
“However, disclosure of information about costs is likely to threaten the tendering process, which by commercial necessity needs to be fair to all tenderers.
“In this case, enabling the company’s competitors to see such details places the company at a significant disadvantage, and would remove the ‘level playing field’ that a tendering process requires.”
When previously asked to justify the cost of the McKinsey report, former KiwiRail board chairman David McLean said the board expected KiwiRail to lift its performance and grow its share of the freight and Cook Strait markets.
The Finance Minister raised concerns with McLean about the consultant cost a week before announcing his early retirement.
McLean retired in July last year. His exit was followed by the departure of KiwiRail directors Rachel Pinn, a transport consultant, Ed Sims, former chief executive of Canadian airline WestJet, and Maryan Street, a former Labour MP and minister.
Their resignation letters were only made public after the Herald complained to the Ombudsman about KiwiRail’s refusal to release them.
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.
