Shakeup comes at $50m cost
Legal costs and improving safety enforcement have cost the NZ Transport Agency about $50 million over the past 21⁄2 years.
The figures are revealed in an Official Information Act response to questions about agency spending after restructuring and a major shakeup of compliance work.
The agency’s $35.6m legal bill covers the period from the beginning of 2017 to July 2019.
A review of compliance standards has racked up $14.6m in expenses related to a crackdown on the enforcement vehicle inspection and certification.
Most of the legal spending went to six law firms – Buddle Findlay
($10.4m GST exclusive), Meredith Connell ($8.1m), Chapman Tripp
($7.8), Kensington Swan ($5.2m), Crown Law Office ($1.8m), and Bell Gully ($1.8m).
The $35.6m covers payments to barristers, law firms, Queen’s Counsels, experts, document service costs, and the cost of getting Meredith Connell to review 850 outstanding files and oversee a revamp of the agency’s regulatory compliance work.
Righting deficiencies in that area began last October after serious concerns over substandard warrant and certificate of fitness inspections, leading to the retesting of more than
63,000 vehicles.
Just last week, a further 2420 vehicles were recalled for retesting following the suspension of two inspectors in Auckland and Whanga¯ rei.
Engaging external consultants made up the bulk of the direct costs of the compliance review, and the bill for warrant of fitness retests was $474,000.
The transport agency did an about turn after initially refusing to reimburse vehicle owners for recertifying and, if necessary, fixing suspect towbars on truck and trailer units, campervans and other commercial vehicles.
The agency said it had not recovered any of that from suspended heavy vehicle certifiers, vehicle inspectors and inspecting organisations (individual garages) and was ‘‘not yet in a position to confirm what actions are, or will be, taken with regards to cost recovery’’.
The agency’s general manager regulatory, Kane Patena, acknowledged the cost of addressing compliance issues was ‘‘large’’ but said it had resulted in significant improvements.
Hiring up to 100 extra staff over the next 18 months would greatly reduce reliance on ‘‘external support’’.
Transport Minister Phil Twyford said the agency had assured him it had not reduced any other activities to cope with the additional costs incurred, and he expected it to continue ‘‘beefing up’’ its regulatory functions.
PSA national secretary Glenn Barclay said the union opposed the excessive use of contractors and strongly supported state sector organisations building their inhouse capacity by training and employing fulltime staff.
‘‘It’s time to end the over reliance on outside help, and support organisations like NZTA reaching the point where they can do this work themselves.’’
Road Transport Forum chief executive Nick Leggett declined to comment on the spending figures.
‘‘It cost what it cost and we don’t really have any comment on that because there will be lots of complexities in the breakdown of those costs.
‘‘There were heavy vehicle certifiers that weren’t performing and quite rightly, they have been identified and are no longer certified.’’
Leggett said the transport industry could see evidence that the agency was ‘‘out the right side’’ of making necessary changes
‘‘We won’t always endorse their approach on all issues, but we need them to be functional.
‘‘After a period of increased costs and uncertainty it appears they are improving their performance,’’ Leggett said.