Delta #EpicPowerFail 6 – Thick as a Brick

gary-larson-the-far-side-1-3-tweaked-by-whatifdunedin-pinimg-com

Received from Christchurch Driver [CD]
Thu, 3 Nov 2016 at 10:59 p.m.

Thick as a brick
Shallow as a bird bath
Not the sharpest knife in the drawer
A few sandwiches short of a picnic
Bought his doctorate online.

Come in Dr Parton….

Your correspondent was both entertained and aghast this morning when enjoying Choysa and a scone, he read Dr Parton, Aurora chair, dutifully parroting Grady Cameron’s lines in the ODT …. “aged network”, “our approach to its management is conservative”. Dr (Polly) Parton also said “it was “not appropriate” for him to respond to comments made by another chairman”. Your correspondent agrees it is not “appropriate”. It is essential to his credibility to do so, as Polly Parton is right – it is amazing that the chairman of a lines company, far away, has felt the need to make scathing comments about the lackadaisical approach to essential infrastructure he has found in the South, and called Aurora’s response “a lame excuse”. When did you last hear the CEO of a council make scathing comments about another ? —or one mayor disparage another in biting terms. It just isn’t done…. so now the attention of the entire lines industry, and the Commerce Commission is riveted upon Aurora as it has just been confirmed by the chair of Marlborough Lines, with no axe to grind, that Aurora’s mess and subsequent evasions are inexcusable.

Some other gems of the re-cycled obvious from Polly in the ODT were “Age … is one reason why we have marked so many poles for replacement” – how fascinating that the board and Mr Cameron only discovered these 40- to 60-year-old poles were aged and needed replacement around the time Mr Healey left three weeks ago.

Readers, while Aurora and Delta have an arrogant disregard for the interest of the consumers and ratepayers, they are very fearful of the Commerce Commission. And the Commerce Commission is under no illusions about the incompetence of Aurora. Not only did Aurora get warned for network failures this year, and are now ranked in the bottom 3 of the 29 lines companies for reliability, they were also warned about their lack of investment and incompetence in 2014 by the Commission.

On 26 June 2014 the Commission wrote to Aurora issuing them with a warning for non-compliance and raising concerns. They said:

“21. There are a number of concerns that we would particularly like to draw to Aurora’s attention … These concerns are:

21.1 Aurora’s vegetation control has been insufficient to prevent significant tree encroachment on lines, which has likely contributed to the frequency and duration of outages….”
Mr Cameron took great delight in waxing lyrical about the dedicated vegetation management unit Delta set up in 2015-16, and how Delta charged Aurora $4M for clearing 34km of lines. We now know it wasn’t anything to do with Mr Cameron, it was forced upon them by the Commerce Commission because they had neglected it for decades. In true Delta form, the cost of $130,000 per km is probably overstated by a factor of 5-10 dependent on difficulty.

“21.2 Aurora has had an increase in defective equipment incidents”.
Oh yes. Aurora’s own Asset Management Plan (AMP) spells out the failures, and impending ones, as noted in #EpicPowerFail 5. In relation to poles, Aurora reduced the number of poles it was going to replace in 2017-18, in its 2016-2026 plan, due to the mendacity of Matt Ballard, GM Capability & Risk. Reacting to public pressure and casting aside the long term plan due to a “perception problem”, without a funding plan in place is just giving the Commerce Commission all the evidence they need that the board isn’t in control and doesn’t know what it’s doing.

“21.3 There seems to be shortcomings in Aurora’s knowledge of its asset condition”.
….(Translated from bureaucratic-ese, this is : YOU ARE USELESS AND INCOMPETENT, and everything we have heard from Aurora recently confirms that this fault has become exponentially worse.

“21.4 Aurora’s reliance on its 6.6kV network as a back up to its aging 33kV cables in Dunedin could lead to major power outages.”

Ominously for the Directors, the Commission was clear about the consequences of further non-compliance, warning Aurora :

“Notwithstanding its 2013 and 2014 compliance, if Aurora fails to comply with the quality standards again, its 2012 non-compliance will be a relevant factor that may lead us towards a stronger enforcement response. Particularly relevant would be the extent to which concerns raised following Aurora’s 2012 non-compliance contributed to the second non-compliance.”

Here we are, four years later, and 3 of the 4 concerns are front and centre of the latest crisis. A lot of words have been written, meetings held, and plans begun, but the network has continued to decline. Unless the Commerce Commission has another spineless apologist like Rebstock of the Audit Office investigating, then the springs in the boardroom ejector seats are tightening.

Readers, we are all frustrated that Mr Cameron, Mr Ballard, and the directors have not a thread of integrity left among them, preferring eventual forcible removal (health problems anyone ?) to decency. But readers, how delicious will it be when they are kicked out, as that will almost certainly be the end of all of their directorial ambitions. Getting kicked out by the Government is the sort of thing that even the Institute of Directors would frown upon, despite overlooking a lot of other venality. As noted at What if?, the Government cannot afford to have tourists killed or suffering from power outages in their #1 tourist region in Central Otago, so it will not be open for Mr McLauchlan to go crawling to Minister Woodhouse, who doesn’t carry a lot of weight now in any case. McLauchlan’s other great fixer, fellow South Canterbury Finance trougher, Denham Shale, is now dead. Mr McLauchlan feeling the chilled air of exposure perhaps ? Perversely, we can be glad that Messrs Parton, Kempton, Thompson, McLauchlan and Frow are all….“thick as a brick”.

Final thought for the evening. If you were Grady Cameron and the board, and wanted to quickly replace 10,000 poles to “restore public confidence” then does buying steel poles from China that are made from less ductile steel (ie more brittle) sound like a good plan ? (Chinese steel is typically 20-25% ductile, whereas NZ seismic requirements generally require 32-34% ductility. It is near impossible to get Chinese steel at this ductility. A recent example is the problems with steel products imported from China by Steel & Tube). Yes readers, you heard it here first, not only did Mr Cameron fail to tell you where the $30M was coming from (they don’t know yet), he also neglected to mention they are buying steel poles from China. And remember, readers, not only did Mr Cameron describe this as “a good plan” on National Radio, but that he “was excited by it”. Truly…… “thick as a brick”.

[ends]

Related Posts and Comments:
2.11.16 Delta #EpicPowerFail 5 : Grady Cameron on RNZ : How many Asset Management Plans does it take to get a Real One ?
1.11.16 Delta/Aurora/DCHL corporate whitewash #dangerousnetwork
31.10.16 Delta #EpicPowerFail 4 : Delta/Aurora, Drugs and Dividends
29.10.16 Mr Crombie, not quite the spent force
28.10.16 Heads of Delta/ Aurora/ DCHL/ DCC out to lunch
27.10.16 Bev Butler says ‘Come in, Grady’ #LGOIMA #Delta
27.10.16 Delta #EpicPowerFail 3 : Rotten Poles and Greedy Algorithms
25.10.16 Delta #EpicPowerFail 2 : Plaudits to Saunders & Elder : Delta…
22.10.16 DCC struggles with Governance…. Delta/Aurora/DCHL…
21.10.16 Dunedin City Council must hang the companies out to dry
20.10.16 Delta #EpicPowerFail : Delta fulfils Adam Smith’s 1776 Prophecy
19.10.16 Grady Cameron and Graham Crombie : Eyes tightly shut #FAIL
13.10.16 COMPLETE Dis-satisfaction with DCC, DCHL, DVML, DVL, Delta….
9.6.16 Aurora Energy Ltd warned by regulator

█ For more, enter the terms *delta*, *aurora*, *epic fraud* or *dchl* in the search box at right.

Posted by Elizabeth Kerr

This post is offered in the public interest.

*Image: pinimg.com – gary larson the far side, tweaked

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11 Comments

Filed under Aurora Energy, Business, DCC, DCHL, DCTL, Delta, Democracy, Design, Dunedin, DVL, DVML, Economics, Events, Finance, Geography, Health, Infrastructure, Media, Name, New Zealand, OAG, Ombudsman, People, Perversion, Pet projects, Politics, Project management, Property, Public interest, Resource management, Travesty, What stadium

11 responses to “Delta #EpicPowerFail 6 – Thick as a Brick

  1. Rob Hamlin

    “Getting kicked out by the Government is the sort of thing that even the Institute of Directors would frown upon, despite overlooking a lot of other venality.”

    Ah CD, it’s not quite that straightforward round here. This from the ODT:

    https://www.odt.co.nz/news/dunedin/southern-health-board-sacked

    “Dunedin legal consultant Kathy Grant has been appointed the Commissioner of the troubled Southern District Health Board which has been sacked today.

    Her deputies will be board member Richard Thomson, who was sacked as Otago District Health Board chairman in 2009, and Dunedin City Holdings chairman Graham Crombie.”

    So a public government sacking isn’t necessarily the end…..if your specific talents are truly appreciated in the corridors of local and national power.

  2. Elizabeth

    Received.
    Fri, 4 Nov 2016 at 5:20 p.m.

    CD replies:

    Mr Hamlin is correct that public directorships are often / generally politically motivated and bear no relation to ability….The SDHB board were sacked because they failed to trim their deficit after several years, however the deficit was actually minor in relation to total revenue, unlike in Aurora’s case. There was no suggestion that they might have failed to manage their assets so badly that there may well be virtually no real value in the existing asset when the true level of required capex to place the network on a reliable basis is properly accounted for. Mr Hamlin may well be right that our dismal directors may yet get to feed at the public trough again, but your correspondent suggests that such demonstrated incompetence would mean the private sector would be loath to touch them.

  3. Elizabeth

    Fri, 4 Nov 2016
    ODT: Concern over power network allegations
    Clutha Mayor Bryan Cadogan is concerned over accusations the power network in his region has been dangerously mismanaged. Mr Cadogan was responding to comments from Marlborough Lines chairman David Dew that OtagoNet had “very similar” issues to the ones Aurora was facing. […] Mr Cadogan said Mr Dew’s comments were a concern and he planned to seek assurances from PowerNet chief executive Jason Franklin that the network was being managed safely. Cont/

  4. Elizabeth

    Delta/Aurora have just announced a review of the power pole situation. Deloitte are to carry that out.
    Interim report due 10 November.

  5. Elizabeth

    Sat, 5 Nov 2016
    ODT: Deloitte to review power network
    A review of the Aurora/Delta power network by Deloitte is expected to start next week, but Dunedin City Holdings Ltd chairman Graham Crombie says it is unclear when any information will be released. […] He said he expected an “interim update” from Deloitte at DCHL’s next board meeting on November 10. But as the review was expected to start next week, the auditor would only have days to provide that update. Cont/

    “I struggle to recall an audit produced by Deloitte that I’d characterise as robust and insightful …. I do, however, see the irony in Deloitte auditing a company led by the winner of the 2014 Deloitte’s Energy Excellence Awards young executive of the year.” –Richard Healey

    • Hype O'Thermia

      Richard Healey, isn’t that the secret of Deloitte’s success – being the auditing equivalent of elevator music?

      “Elevator music | Define Elevator music at Dictionary.com
      http://www.dictionary.com/browse/elevator-music
      Elevator music definition, prerecorded background music played in elevators, stores, and other public places, meant to provide a bland, soothing atmosphere.”

    • Elizabeth

      Given Deloitte have DCC as one of their large ‘ongoing’ – constantly streaming – clients (money trees) requiring advice on ‘bigger picture’ council finance, I can see how this would provide splendid fee-earning opportunities to coverup Everything Incompetent at Delta/Aurora/DCHL/DCC in a giant swoosh.

      And no jail cells.

  6. Elizabeth

    Asides [phoneshot details]

    NBR 4.11.16 : Private Bin (page 25)

    2016-11-05-18-15-14

    NBR 4.11.16 : Market odds and experts be damned (page 28)

    2016-11-05-18-42-17

    Garrick Tremain 17 Oct 2016

    *25.10.16 The Board of Wynyard Group today regrets to inform shareholders that it has placed the company into voluntary administration.
    Listed on the NZX – Wynyard Group is was a market leader in serious crime fighting software used by customers in government, financial services and infrastructure critical to a nation.

  7. Calvin Oaten

    Am I right in thinking that maybe the directors and management of Aurora are less than what one might think? If so then ‘outski’ is the message. If, on the other hand they are investigated and found to be all in good shape by Deloitte then it is fair to say that this is a ‘pigs ear’ or holy setup. This whole business is the result of the $40million of subvention payments to the Stadium. Nothing but the fact that it was debt funded from the beginning and was a “not a penny over $188million job for $225million (officially)”. Then the financial strategies kick in and now we see the results. And the Stadium still is as indebted as it wallows, with the rugby people getting more and more perks tossed at them. Meanwhile Aurora goes from worse to worst.

    • Lyndon Weggery

      Calvin – you are so right and the reason why we anti rates-funded stadium people just won’t let it go and “move on”. Aurora are giving DVL subvention payments as a tax write down to assist with the Stadium loan. This is money derived from lines charges on all our power bills, which should have been used to upgrade the network as identified in the 2016 Aurora Asset Management Plan. A read of this document will show that it is not just poles poles there are substations and 33KV lines erected in the 1950s and 1960s which are in need of urgent renewal.
      Money which is certainly not going back to us as DCC ratepayers in the form of an annual dividend. Not to mention what money of ours has been wasted by Delta in its dodgy subdivisions. The very fact that Delta has to borrow $30M to fund the urgent upgrade of power poles shows that something is amiss in these two organisations (Aurora/Delta) which are linked. Furthermore Delta are conveniently avoiding statutory timelines for Condition Zero and One poles under the Energy Safety Regulations by stating they have an audited safety management process in place. Let’s hope when the WorkSafe people from Wellington come down on 22 November to review safety they have some hard questions to ask of Aurora/Delta.

      {Moderated. The Aurora AMP 2016-2026 is far from being credible ‘gospel’; it is strongly criticised by Christchurch Driver [CD] at the above post and previously. -Eds}

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