Government orders tools down on $532M Three Waters ICT project

Government orders tools down on $532M Three Waters ICT project

Officials told to make the most of work already completed.

Simeon Brown (Minister for Local Government)

Simeon Brown (Minister for Local Government)

Credit: Supplied

Minister of local government Simeon Brown has ordered a stop-work on the previous Labour government's Three Waters ICT enablement projects.

On 14 December, Brown announced cabinet’s decision to repeal the previous government’s water services legislation and signalled next steps for implementing the government’s plan for water services, dubbed "Local Water Done Well". 

The government said it would implement a new regime which recognised the importance of local decision-making and flexibility for communities and councils to determine how their water services would be delivered in future. 

"It will do this while ensuring a strong emphasis on meeting rules for water quality and long-term investment in infrastructure," said Hamiora Bowkett, acting deputy chief executive of the Department of Internal Affairs' local government branch.

The IT capability and other projects associated with the previous government’s water services policy were designed to work as part of a nationwide model, Bowkett said yesterday.

"As part of the minister’s early decisions around the implementation of Local Water Done Well he has therefore directed the department to stop work on the nationwide rollout of these projects, while leveraging value for the sector from the work completed to date."

The move mirrors another at training and skills roll-up Te Pukenga, where a $220M enablement project was shuttered last week.

The Three Waters project comprised two major strands – systems of record, and corporate systems and operational technology.

In June, US ERP giant Infor won a $107.5 million cornerstone role enabling the $532 million system of record project, which would help see water services entities reduce in number from 67 to just ten, all using the same platforms.

That $532 million budget, of which nearly $200 million has already been invested, included a $147.7 million contingency.

A separate corporate and operational technology project budgeted at $383 million is also affected, but Reseller News understands spending on this to date has been relatively minimal.

Tenders and advance notices in relation to procurements for this stream have emerged on the government tenders website since August covering infrastructure, remote access, asset management and data ingestion.

Heather Shotter, executive director of the programme's National Transition Unit, said at the time that shifting the management and delivery of water services from 67 councils to ten larger water services entities provided the opportunity to standardise ICT systems.

“The change from multiple existing IT systems to a single platform will be a key enabler for the successful transition of water services management and delivery and is critical for ensuring longer-term transformational benefits are realised," she said.

Bowkett said the department would now be working with parties who expressed interest in taking over elements of the projects.

"We are currently working through the implications of this decision with contractors, staff, vendors and other affected parties."

More detail would be provided once decisions had been made, Bowkett said.

The possibility of a change of government and water policy appears to have been considered during the huge Three Waters ICT enablement.

Documents prepared for former local government minister Nanaia Mahuta and provided to Reseller News in June indicated several "off-ramps" were included in negotiations with Infor to cover risks including a change or repeal of any part or all of the reforms or a scope change.

In addition, the software subscription licence was also to include a "gate" allowing Internal Affairs to terminate the agreement a year after commencement if the software was not usable. 

By that stage, it was estimated, the project would already have cost $298.4 million.

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