Auditor-General's overview

Effectiveness and efficiency of arrangements to repair pipes and roads in Christchurch - follow-up audit.

The major earthquakes in 2010 and 2011 severely damaged the roads and underground freshwater, wastewater, and stormwater pipes in Christchurch. These pipes, roads, retaining walls, and bridges (horizontal infrastructure) are necessary to support basic human health needs and the future growth and economic well-being of Christchurch.

An alliance of public and private-sector entities called the Stronger Christchurch Infrastructure Rebuild Team (SCIRT) was formed to repair the damaged pipes and roads. The alliance included the Christchurch City Council (the Council), the Canterbury Earthquake Recovery Authority (CERA), the New Zealand Transport Agency (NZTA), and five construction companies. SCIRT is a temporary alliance, which is expected to finish its construction programme by 31 December 2016.

In November 2013, I published a report about how effectively and efficiently the public entities (the Council, CERA, and NZTA) were managing the rebuild of Christchurch's pipes and roads through SCIRT. In 2013, I concluded that:

  • SCIRT had many of the good practice characteristics of alliancing;
  • SCIRT projects seemed reasonably priced, given the circumstances; and
  • SCIRT was delivering other benefits, including increasing the skill level of the construction workforce and fostering innovation.

I also found risks that the public entities needed to manage. These risks included a lack of clarity about governance roles and responsibilities, limited involvement of CERA in the governance of SCIRT, and the public entities not having a common understanding of levels of service to be delivered by the pipes and roads. I made seven recommendations to address these risks.

This follow-up report looks at the public entities' progress in addressing my recommendations. Overall, I consider that the public entities have made good progress in addressing my recommendations.

Since 2013, SCIRT has made solid progress in repairing damaged pipes and roads. At the same time, the public entities have improved the governance arrangements over SCIRT. These improvements include clearer roles and responsibilities, more effective guidance and clearer direction to SCIRT, and improvements in reporting.

The public entities faced challenges in deciding appropriate funding and levels of services for the horizontal infrastructure. In disaster recovery work, getting the balance right between competing interests is difficult.

The levels of service are now agreed, the funding arrangements are confirmed, and a second independent review of the Infrastructure Recovery Technical Standards and Guidelines has been carried out. The funding arrangements, however, took up to 19 months to confirm, creating funding uncertainty for about 30 wastewater and stormwater projects for more than eight months.

While we were following up on the public entities' progress, my staff also took the opportunity to look at the arrangements for:

  • transferring assets and information from SCIRT to the Council; and
  • learning and sharing lessons from managing the rebuild of the horizontal infrastructure.

Both of these arrangements could have long-term benefits, including for the management of assets and future alliances.

As part of the rebuild, SCIRT collected a wealth of information about pipes and roads owned by the Council and NZTA. SCIRT has also set up asset information systems that the Council could benefit from. The Council has a unique opportunity to improve its understanding of the condition of its assets, which will in turn improve its future management of them. Although progress was initially slow, there has recently been promising progress in planning for the transfer of the information and preparing for the transition from SCIRT to the Council. To realise the benefits of SCIRT's work for the people of Christchurch, I encourage the Council to sustain the recent momentum, with the support of the other public entities and SCIRT.

SCIRT has a continuous improvement culture that identifies, shares, and applies lessons and innovations. The public entities need to continue actively and systematically identifying, recording, and sharing their lessons from SCIRT and the Alliance's approach, to manage the risk that their own lessons might be lost when staff leave or organisations change.

I thank staff from the Council, CERA, NZTA, and SCIRT for their help and co-operation during our follow-up audit.

Signature - LP

Lyn Provost
Controller and Auditor-General

5 May 2016