Stadium: Truth, usual whitewash or prosecution ?

stadium-header 2Waiting for the watery blue ink . . .

This is the test of DCC chief executive Paul Orders, firstly.
The rotten council (politicians and staff), secondly.
Conniving DCTL and DCHL, thirdly.

The following item is reproduced in full, in the public interest.

### ODT Online Sat, 11 May 2013
Council report to cover stadium review issues
By Chris Morris
One year to the day since a multimillion-dollar overspend on the Forsyth Barr Stadium was confirmed, the Dunedin City Council is preparing to reveal the lessons learned from the project. Council chief executive Paul Orders yesterday told the Otago Daily Times issues arising from the PricewaterhouseCoopers review of stadium spending would soon form part of a pre-election report to councillors.

The report – a requirement since changes to the Local Government Act in 2010 – would consider the impact of major projects dealt with by the council in recent years, and any lessons learned, he said. That would include the controversial stadium project, given the significance of the PWC report’s findings, he said. ”The PWC report was one of the milestone reports published by the council over recent years, so clearly, its significance will need to be reflected in my pre-election report.”

Mr Orders’ report would be given to councillors by August 2, and made public before the local body elections in October.

His comments came after PWC staff concluded a major study into stadium costs on May 11 last year by revealing an $8.4 million overspend, together with $18 million in interest not previously included in construction costs. The overruns, unauthorised spending and interest together pushed the total cost of the stadium up from $198 million to $224.4 million.

PWC director Stephen Drain said at the time responsibility for authorising the overspend lay with the council’s ”management executive”. Mr Orders – then only months into his new role – was asked at the time if heads should roll, but said he needed time to study the findings ”coolly and calmly”. There has been no public comment on the report’s findings since then.
ODT Link

Posted by Elizabeth Kerr


Filed under Business, Construction, CST, DCC, DCHL, Design, DVL, DVML, Economics, Media, Name, ORC, ORFU, People, Politics, Project management, Property, Site, Sport, Stadiums

18 responses to “Stadium: Truth, usual whitewash or prosecution ?

  1. Alan van Beek

    Council could be managed by Comms, the enclave of not being rotters. Salut, Uncle Rotterdam, “Workers’ Playtime”.

    • Mr Orders has taken forever, it seems, in processing the second PWC file he was handed; there have been many calls on council files as a result of the contents. What has he found, it better not be antiseptic soap and hand cleaner, or this city will erupt. Still we have no formal credible explanation for Athol Stephens’ sudden departure from DCC, everybody who is anybody keeps asking “What happened?”. It was very Heidi Klum, one minute AS was IN, the next he was OUT.
      Mr Orders at Burns Hall, promised us that he would give answers. Is he ‘allowed’ to? Will he give us something not everything? A lot riding on what he does with his report. We will not accept massage – actually, that’s something Ms Rosebud was keen to stop, massage. But all we’ve seen from her lately is massage, more of same. I guess that’s what happens on your large salary – frolics in the park [now transferred to the stadium]… more frigging borrowing and spending sprees on the Mayor’s re-election campaign, supported by EMT handmaidens.

      • From colleague @cafbear by tweet earlier today:

        @cafbear @PressNewsroom: Forsyth Barr Stadium Takes Top Prize: Dunedin’s Forsyth Barr… @whatifdunedin @TheWarRoomNZ
        9:43 AM – 12 May 13


        Hope everyone kept their cornflakes down.

        ### Last updated 09:00 12/05/2013
        Source: The Press
        Forsyth Barr Stadium Takes Top Prize
        ‘A magnificent tour de force’

        Dunedin’s Forsyth Barr Stadium – the country’s first undercover stadium – has taken out the Supreme Award in the New Zealand Commercial Project Awards announced at last night’s national gala event in Auckland. Up against more than 40 of the country’s top commercial buildings, the Forsyth Barr Stadium, built by Hawkins Construction South Island Ltd, was described as “a magnificent tour de force”, “a project of firsts” and “a credit to all involved”. The project was also awarded a gold and category prize for the industrial category, and top project over $15 million.
        Judges hailed the “unique” snow melt valves in the translucent ETFE plastic roof and the indoor natural grass pitch. “The Forsyth Barr Stadium impressed us with the sheer volume of man hours (1,370,000), meticulous planning and creative approach that saw the team continually searching for ways to ‘do it smarter’,” the judges said.
        The RMB Commercial Project Awards first launched in 2006 -recognises the country’s top commercial buildings and the teams behind them.
        Read more

  2. I think Mr Orders has charged himself with the task of “getting to the bottom” of the situation. He knows the debt position, he knows the main causes being the Stadium, the Otago Settlers Museum, the Town Hall Conference Centre and the Tahuna pipeline extension plus the treatment upgrade. Those are the obvious.

    By now he knows that the OSM, having no revenue, is a dead burden of around $35-40 million. He will very quickly come to realise that the Town Hall Conference can never reach the super optimistic projected 36 plus conferences per annum. He will know that it escalated from a starting point of $14.5m, moved to $18.5m then to $29.5m and got the green light at $42m. He will also know by now that it is completed at about $43m not counting finance costs of around $5m. He will also know that even if the 36 conferences are achieved, according to the Horwath Report (on which the approval was based) that after debt servicing it will show an annual deficit of $4m plus.

    He will as well, due to the PwC report, be aware of the true cost of the Stadium at around $225m, with no private funding, a far cry from the “not a cent more than $188m” mantra of Malcolm Farry. He will know that all of this added to council’s existing debt, plus DCHL’s in-house borrowings that the ‘consolidated city debt is around $668m and counting.

    He will also know that our illustrious city financial controllers had, in their wisdom, sought to minimise the cost of that horrendous debt by indulging in the dangerous tactic of Interest Rate Swaps, Hedges and Derivatives.

    As at 30 June 1012 the city’s accounts were at an additional risk to the tune of some $34m due to these activities. He knows that Athol Stephens had been explaining away these risks as being not actual, but only disclosed to meet the accounting standards required. He will also know that if these ‘nasties’ blew up, the city could be in trouble for hundreds of $millions over and above the actual debt. He will also know that no-one around the council table, including the Mayor understand this or the implications.

    He will also know that his boss is a populous super optimist who manages to make even the simplest exercises complex.

    He knows the way this city has impoverished itself to rugby, and the disgusting, grovelling public exercise in which the mayor endeavoured to cover his ineptness when publicly criticising two rugby entities. This cost the city all the appellants’ legal costs plus who knows what ‘confidential damages payments’.

    He will know that DCHL is in no position to produce sufficient trading profits to enable it to service its own in-house debt, plus provide a constant dividend and interest payments of $10.450m year after year to the DCC. He will also know that DCHL is committed to also pay $5.25m to DVL (the stadium holding company) for debt reduction.

    He will also be aware that the Waipori Investment Fund is scheduled to produce annual returns to the DCC of $3.211m regardless of market investment conditions.

    He will also know that during at least the last decade that DCHL has borrowed (increased debt) to meet these requirements. He will know that the new board of DCHL have stated that as from 1 July 2012 it would no longer be prepared to continue to borrow these funds.

    He will know that the city is in dire straits and that the current mayor and council are either in total ignorance, or denial. Either way, it will be bad news if the same old same old are returned in October.

    What he probably doesn’t know is how much of the information that has been fed to him over the last two years has been a true reflection of the state of affairs, and how much is obfuscation.

    By the way he has systematically culled (pun intended) out senior position holders I suspect that he is getting his head around the problem. There is more to come yet, I suspect. For me, I have a lot of faith in his efforts, but it is a Herculean task, with no guarantee that he can save our bacon.

  3. Whippet

    Will the last one to leave Dunedin turn off the lights and taps. If we still own them?

  4. Hype O'Thermia

    That’s like praising the Cave Creek platform’s design for how sensitively the colour fitted into the natural surroundings. Appalling drivel from The Stupefyingly Superficial Central Bureau of Irrelevance.

  5. This post shows a hint of what’s wrong in NZ, not just here in Dunners but all over the place.
    We’ve got how many ‘companies’ and fronts for companies so shit can be hidden.
    The council owns the stadium. It is that simple. They can say DVML or ‘putsomeotherwanknamehere’ as seems to be the in-thing. In because they seem to be able to hide shit once this is done. This is all wrong, and every one of these fronts costs even more money, we can easily add delta to this to.
    Is it too honest to just call them what the are? As for the tax write-off side of it, I’ll wager even if we paid more in tax for these city assets it would still be cheaper than having the arseholes hiding god knows what behind the fronts.

    • [Ultra fun to get the names of the habitual investors that were offered DCC bonds (stadium)]

    • The MYTH goes on…

      ”Try and find another stadium in the world for $220-odd million dollars, a covered roof and natural grass … Well, you won’t find one.” –Andrew Holmes

      ### ODT Online Mon, 13 May 2013
      Award to stadium; judges wax lyrical
      By Hamish McNeilly
      Forsyth Barr Stadium was a ”magnificent tour de force”, judges said at the annual New Zealand Commercial Project Awards before crowning it supreme winner. ”We often refer to this as our Everest. It was almost insurmountable,” project director Andrew Holmes, of Hawkins Construction South Island Ltd, said about the project.
      Read more

  6. Hype O'Thermia

    Tourettes de farce more like. Feck-feck-feckin’ stupid from the get-go, approval by show of tics, that’ll be the only explanation later generations will be able to come up with to interpret this latter-day Easter Island edifice when they find and decipher the digital records – and piles – of the long-vanished monument to (they’ll speculate) a regional God of Stupidity.

  7. BillyBob

    Congratulations Hawkins Construction. Well deserved award.

  8. The Baker

    Proof of the pudding will be in the eating, so they say BillyBob. If this award winning stadium is the bees-knees as well as a world first (and maybe the last). Then we shall wait and see how many more copies of it are built. Don’t hold your breath waiting, it could be injurious to your health, as it has been to the ratepayers’ pocket.

  9. Peter

    I seem to vaguely remember some similar award given last year for the stadium. For how many years will they rehash this ‘new industrial building’ category award for a building that was opened almost two years ago?
    Will the stadium last as long as the pyramids in Egypt?!
    The oh so proud comments made by that Hawkins bod can be taken with a grain of salt, eh.

    • ### May 13, 2013 – 7:09pm
      Stadium takes major award
      Forsyth Barr Stadium beat challenges from developers of more than 40 of the country’s top commercial buildings to take a major award on the weekend.

      • Comment at ODT Online – abridged.

        Submitted by ej kerr on Tue, 14/05/2013 – 12:09pm.

        Kevy says The stadium is up and running and a success.

        He hasn’t read DVML’s six-monthly report -or DCC’s consolidated annual accounts, if success meant anything. Divorcing the mind from a slight flurry of subsidised activity at the rugby stadium and heavy financing the stadium requires (into the future) at considerable risk to city property owners and residents, I put down to stray endorphins and skew.[Abridged]


        As sent:

        Success is a word, that melts
        Submitted by ej kerr on Tue, 14/05/2013 – 12:08pm.
        kevy says The stadium is up and running and a success.

        kevy hasn’t read DVML’s six-monthly report -or DCC’s consolidated annual accounts, if success meant anything.

        Divorcing the mind from a slight flurry of subsidised activity at the rugby stadium and heavy financing the stadium requires (into the future) at considerable risk to city property owners and residents, I put down to stray endorphins and skew.

        Poor kevy. Buy him an icecream, sit him in the corner a while. Don’t forget sun hat and shirt.

  10. Phil

    Those awards are a bit like kids football. The categories are structured so that everyone wins a prize. Entrants also nominate themselves, so it depends on who bothers to make the effort. Remember when Wall Street mall “won” the same thing a few years back ?

  11. Mike

    I’m pretty amazed they managed to beat out the Ophir store ….

  12. Peter

    Phil. It all sounds a bit like NCEA!

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