Commerce Commission Investigates Wellington Water Over Procurement Practices.
The Commerce Commission has launched an investigation into Wellington Water following damning reports that exposed skyrocketing costs and financial mismanagement. The reports revealed that Wellington ratepayers were paying nearly three times more for emergency water repairs compared to other cities like Christchurch and Hamilton.
The investigation will examine how Wellington Water hired contractors and consultants, focusing on whether the procurement processes resulted in anti-competitive behaviour. A Commerce Commission spokesperson confirmed the probe, stating, “We are undertaking an investigation under the Commerce Act. That’s all we’re able to say at this point.”
The reports found:
- Unplanned water spending tripled between 2017 and 2022, costing councils millions.
- Weak financial controls left the organisation vulnerable to fraud.
- A culture that favoured contractors over ratepayers, with council budgets being shared with suppliers.
Further concerns have been raised around Wellington Water’s leadership, particularly the role of Chief Executive Pat Dougherty. Dougherty previously sat on Wellington Water’s board as a director before being appointed as chief executive in 2024. This transition from governance to executive leadership is uncommon and has led to questions of conflict of interest, particularly as scrutiny over Wellington Water’s financial and operational failures continues to grow. Under Dougherty’s leadership, the organisation has faced allegations of financial mismanagement, excessive contractor costs, and weak fraud protections. While board chair Nick Leggett has defended the appointment, public frustration over the company’s performance has only intensified, with some viewing Dougherty as either incompetent or complicit in a culture that has failed ratepayers.
One of the biggest concerns was Wellington Water’s procurement model, which assigned work to a panel of preferred contractors, including Fulton Hogan, which was embedded within the organisation. This model has now been scrapped, but the nine companies involved can still tender for work.
The commission’s investigation will assess whether these agreements substantially lessened competition, leading to higher costs and fewer choices for ratepayers. If Wellington Water is found to have breached the Commerce Act, businesses and individuals involved could face significant penalties.
Meanwhile, pressure is mounting on Wellington Water chair Nick Leggett, with calls for his resignation. Some Wellington City councillors are also pushing for legal action against board directors and efforts to retrieve overpaid funds.
With the Commerce Commission stepping in, the future of Wellington Water’s governance and financial integrity is now under intense scrutiny.