Healey responds to DCHL terms of reference for Delta review

Received from Richard Healey
Sun, 6 Nov 2016 at 1:40 p.m.

So, two weeks ago the story was that heads would roll “if the accusations prove true”.

Let’s recap. I sent a letter outlining my concern that the state of the Aurora Network constitutes an unacceptable and potentially fatal risk for the workforce at Delta and the community in Dunedin and Central Otago.

No response, my letter of resignation arrives.

I turn up for work the next morning and expect the discussion to start. Two managers are told to remove me from the building and not to let me have contact with other staff. One is told to sit in the car with me and return to Dunedin. I am told that there will be a meeting with the CEO and the GM Strategy and Risk.

Before we make it to Dunedin that meeting is cancelled. I receive an email from the GM Energy and Communication advising me to withdraw my resignation and complaining about the “tone” of my email.

The CEO goes on national television and tells the world that he would have loved to discuss the issues with me, but I resigned before he had a chance.

Heads up Grady, I was at work the next day, my phone was on, I still had a thirty day notice period, the company had me removed before discussion could take place. YOU cancelled the meeting that I was told to expect.

The chairman of the DCHL board is quoted in the press as saying heads will roll (ODT 29.10.16) if the accusations prove true. The terms of reference for the review are in the article below. Here’s the question that’s not asked, the only one which is relevant :

DOES THE STATE OF THE AURORA NETWORK POSE AN UNACCEPTABLE RISK TO THE SAFETY OF THE PEOPLE WHO WORK ON IT AND TO THE WIDER COMMUNITY?

Where’s that question Mr Crombie?!

[ends]

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At Facebook:

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█ Facebook: Richard Healey

richard-healey-newshub-co-nz-odt-29-10-16-p51-1Richard Healey [newshub.co.nz] | ODT 29.10.16 classified p51

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4.11.16 Delta #EpicPowerFail 6 – Thick as a Brick
2.11.16 Delta #EpicPowerFail 5 : Grady Cameron on RNZ : How many Asset…
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.

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22 Comments

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22 responses to “Healey responds to DCHL terms of reference for Delta review

  1. Elizabeth

    [A Sunday entertainment for Grady look- and act-alikes]

    Received from Douglas Field
    Sun, 6 Nov 2016 at 5:53 p.m.

    Douglas Field Published on Nov 5, 2016
    Delta disasters
    This clip lampoons the incompetent so-called management, of a company that is owned by the ratepayers of Dunedin. The appointment of such people to its management is reminiscent of the appointment of a prominent bookseller to be First Lord of the Admiralty in the UK that W.S. Gilbert so stunningly lampooned at the time.

  2. Well done Richard Healey and thanks to Jim Moffat too.

  3. Rob Hamlin

    I saw a Delta crew out yesterday (Saturday morning!!!) replacing a pole near Forbury Park, or to be more precise replacing a pole and attached concrete block.

    This seems odd as these ‘block-bodges’ were supposed to stablise a pole for quite a while – Surely their unblock-bodged but equally rotted out compatriots would be a higher priority for a bit of unexpected Saturday morning overtime for the lads? Are these blocks being prioritised?

    The blocks have been around for a while. Their purpose mystified me. As had why the Council tolerated them hideously littering the sidewalks. Never in a million years would I have either deduced or believed that they were what we now ‘officially’ know they are for.

    These concrete blocks interest me. As of last week (before the ‘Grady’s Saved Us’ plan 100% per pole price hike), the estimated per pole replacement cost was, I believe, $5,000. Amortised over 50 years, that’s a depreciation cost of $100 a year.

    Comments made recently suggest that a ‘block prop up/bodge up job’ costs c. $3,000 a pole and lasts 10 years (even this seems a bit hopeful). That is of course a lower up-front cost than a replacement pole, but amortised over the ten years that gives us an annual depreciation cost of $300 per year for this lash up. Three times the cost of doing the job properly, and still more than the annual depreciation on the new price (Maybe this new price now includes a $5,000 allowance for replacing the equally knackered wires and insulators?) – and that’s if the lash up works as its authors presume.

    Now I really am mystified. This seems to make no sense at all, even for a company that is so heavily parasitised by the Foobar and debilitated by other exciting un(der)secured developer-finance activities. I personally can see no legitimate or logical basis upon which this process can be justified in light of any serious inquiry. It is maybe indicative of a 100% prioritisation of maximum year-by-year cash flow, with no other plan extending beyond that point.

    Maybe it is best that they were gone before anybody makes any such inquiry methinks. They would represent a bit of a disposal problem. Does Delta own these blocks – or rent them?

    Perhaps Mr Healey can enlighten us further on this matter?

    • Richard Healey

      The “average” price of a pole replacement is a difficult thing to pin down. A simple pole in the country, carrying light conductors, replaced as one of a bunch in the same area, may cost two or three thousand dollars. A complex transformer structure may get to $70,000 or more.

      In Dunedin the costs will be hugely higher than in Central Otago. Traffic management alone can run to more than $1000 a day. The structures are more complicated, the pressure to work alive far greater.

      The costs of an accelerated program will almost always be higher too. Crews from out of town will have to be moved here, accommodated and fed. Front loading materials into the project will probably mean accelerated freight times and further expense.

      The good news is that given normal margins the return from Delta (as opposed to Aurora) should look great next year as the result of all the extra work. The bad news is that the margin paid to external contractors will be lost to the city.

      I expect many savings to be made ~ because a bulk upgrade program should be far more efficient. Fixing one pole here then another one on the other side of town, all without turning off the power, is slow and expensive.

      The blocks are a tiny expense compared to the cost of the program. Derek Todd, GM of Asset Management at Delta, was quoted in the ODT as saying that they stay in place on average a couple of weeks. I think others may have a different view.

      I can think of one block in Waverley that has probably been there a year or more. In St Kilda there were four in one street for more than six months.

      I think the thing you refer to as a “bodge job” for $3000, judging by the cost you quote, is probably pole nailing, not blocks. My guess is that fitting a block is going to come to less than $600.

      Pole nailing is a process where a formed steel plate is driven down next to a pole and then bolted to it. Amortising the true cost of a nail over its likely life is another equation altogether.

      You are correct when you suggest that it is not just the poles which are knackered. Much of the conductor on the peninsula is heavily corroded. One piece that I measured was down to 27% of its original size. My guess is that conductor reduced to around 50% of its original cross sectional area will be pretty common out there. If you read the 2016 amp you will find many worrying items listed as “replacement recommended”.

      As I’ve said before, this isn’t just about the poles.

      • John P. Evans

        The Peninsula, no rubbish collection, no water supply, no sewage treatment. All we get is a bill from the DCC for Fulton Hogan. Just who benefits at city hall from that contract? And Richard Healey now explains that the electricity supply is buggered. Thanks Richard, we knew from the number of power outages that we had a problem. There is some satisfaction in knowing it’s another DCC stuff up.

  4. Gurglars

    Rob, the blocks are a result of climate change and they were provided by a dead man from a Fulton Hogan truck in Christchurch.

  5. Clyde Key

    Being forcibly escorted all the way to Dunedin is a breach of Richard Healey’s civil rights.

  6. Elizabeth

    Richard, earlier there was concern expressed in the media for continuity of network supply to central Dunedin – the 1998 blackout in Auckland (a five-week-long power outage affecting the central city) was cited…. more recently, offline, someone mentioned the poor state of a major cable that comes down Stuart St to (was it) the substation near the Hyatt Kingsgate ?

    If time please could you comment on these network matters given the vulnerability that exists for Central Dunedin. Much appreciated.

  7. Rob Hamlin

    Thank you Richard, most informative.

  8. Elizabeth

    Tweet received.

  9. Gurglars

    Deloitte! Like getting the rabbit to conduct an enquiry into who ate the lettuce!

    They whitewashed the theft of 152+’cars from the DCC blaming ONE MAN, a dead one.

    Just how many enquiries can they lead before they find the DCC guilty.

    My betting is many more!

  10. Elizabeth

    Networks feared former Delta manager Richard Healey coming forward with allegations against Aurora could prompt increased scrutiny of investor-owned networks.

    Tue, 8 Nov 2016
    ODT: Claim other networks uneasy
    Accusations Aurora dangerously mismanaged its network has other lines companies scared of a wider Commerce Commission crackdown. An anonymous source said fears of such a crackdown resulted in a South Island-based network contacting Marlborough Lines to express concern the latter was speaking out in the media. The Otago Daily Times understands it was Christchurch City Council-owned network Orion which made that contact. Cont/

  11. Hype O'Thermia

    “Accusations Aurora dangerously mismanaged its network has other lines companies scared of a wider Commerce Commission crackdown.”

    Why scared? Have those other lines companies been frittering money away and paying absurd salaries to noddies who can’t keep track of their reason for being in the role, instead of keeping infrastructure up to safe standard?

    If not there’s no need for them to worry about Com.Com – is there?

  12. Elizabeth

    Not an Otago / Dunedin rotten pole with a transformer toppled over, but along these ‘lines’…. a reminder, in case Messrs Cull, Crombie and Cameron forget their duty to society.

    ### NZ Herald Online Tue, 8 Nov 2016
    Four children injured at Auckland daycare after tree falls onto playground
    By Morgan Tait, Cherie Howie, Alicia Burrow
    Four children under three-years-old have been injured, one critically, after a tree fell on to a playground at an Auckland daycare. Emergency services are currently at the daycare centre on Gilles Ave, Newmarket. A St John spokeswoman said four children were being taken to Starship from Discoveries Educare Newmarket. She said one of the patients was status one, or critical, one was status two, or serious, and the other two had moderate injuries. At least two received head injuries.
    NZH Link

  13. JimmyJones

    Hype O’Thermia: I think that Aurora and the other lines companies are not a bit scared of a Commerce Commission crackdown. They will try to avoid bad publicity, but a “Commerce Commission crackdown” is like a head-on collision with a butterfly, during a leisurely stroll. As an example, for the 2012 year, Aurora, Eastland, Electricity Invercargill and Orion failed to comply with the quality standards. The “Summary of the Commission’s enforcement decisions in response to non-compliance ~” was released on 26 June 2014 and the result was – warning letters for three companies and no enforcement action for Orion.

    Aurora’s non-compliance was because of these failings:
    — vegetation control has been insufficient to prevent significant tree encroachment on lines
    — an increase in defective equipment incidents
    — shortcomings in Aurora’s knowledge of its asset condition
    — ageing 33kV cables in Dunedin could lead to major power outages
    — failing to submit its 2012 compliance statement within the required time.

    Since 2012 things seem to have gotten worse.

    We read that the Commerce Commission said yesterday it “may” conduct a wider investigation of the state of New Zealand electricity infrastructure. If it happens, this might show problems with other companies, but what it probably won’t show is the apparently feckless and incompetent behaviour of the Commerce Commission. This is the same situation as DCHL’s Deloitte review. DCHL chairman Graham Crombie has chosen the terms of reference for this review so that his own failings are not examined. Grady Cameron isn’t the only one with blood on his hands.

    • Elizabeth

      Tomorrow is another day JimmyJones. Read your ODT in the morning.

    • nick

      Was not Crombie appointed as an associate member of the Commerce Commission in 2015?
      What does that role entail, and is there not the tiniest area of conflict, given the extensive interest on several levels by the ComCom on Aurora/Delta?

      • Elizabeth

        Correct, nick.

        23.7.15 ODT: New role for Crombie
        Dunedin independent director and accountant Graham Crombie can add another line to his already extensive CV after being appointed as an associate member of the Commerce Commission.

        http://www.comcom.govt.nz/the-commission/about-us/commission-members/
        Last updated: 15 Aug 2016

        Commission members
        The Governor-General, on the recommendation of the Minister of Commerce and Consumer Affairs, appoints Commission members for their knowledge of, and experience in, areas relevant to the Commission’s interests. The Telecommunications Commissioner is appointed on the recommendation of the Minister for Communications and Information Technology. Cont/

        ……

        Graham Crombie
        Associate Commissioner
        Graham Crombie was appointed in July 2015 as an Associate Commissioner for a five year term. Graham is a Fellow of Chartered Accountants ANZ and a Chartered Fellow of the Institute of Directors. He is a previous president and chairman of the New Zealand Institute of Chartered Accountants. Graham has a Bachelor of Commerce from Otago University and was awarded a Masters of Design Enterprise. He has 30 years’ experience in professional services firms specialising in audit and consulting. Since 2013 he has been acting as an independent director to a range of organisations in both the private and public sector.

  14. nick

    Given the knowledge needed and criteria required to be first appointed as an associate member of the ComCom, this puts Mr Crombie in a very interesting position as chairman of the DCHL.

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