The trusted voice of the industry
for more than 30 years

NZTA under fire over contracts

Officials claim changes have been made as a damning report criticises “unmanaged conflicts of interest” in relation to tenders.
Posted on 13 August, 2020
NZTA under fire over contracts

The NZTA is preparing to release an independent report that details a “wide range of serious issues” relating to work overseen by a former senior manager.

Consultancy firm Deloitte has reportedly delivered a damning report on the NZTA that says it failed to follow its own processes, had unmanaged conflicts of interests, operated on unsigned contracts, and paid out money for services for which it hadn't contracted.

It scrutinises contracts involving Martin McMullan, who was NZTA’s Zero Harm manager until resigning in March 2019, and an associate.

These resulted in a near-useless app being developed by a contact of McMullan, pictured, that cost the taxpayer $198,000, and a contract that saw the same company pocket $1.5m in fees from civil contractors.

Newsroom reports McMullan and Martin Riding, who are referred to as “ZHM” and “Person A” in Deloitte’s findings, are the two people at the centre of events examined between 2014 and 2018.

The article claims Deloitte found two companies – Lean Machine and Learning Machine – were incorporated by McMullan or his partner Riding and acquired NZTA contracts for apps.

McMullan vacated his shareholding in Lean Machine two days before the company received contracts valued at $51,950 from NZTA. Meanwhile, Learning Machine received $78,000 from the agency just two weeks after it was incorporated.

The Deloitte report, which Newsroom has obtained a copy of, says four companies were established by Riding and “immediately” received funding from NZTA or the civil construction industry. The other two companies were SafetyApp, which was contracted to deliver a second version of an app called Zero Harm, and ConstructSafe Testing.

The Zero Harm app was ditched in 2018 following complaints from staff and it suffered a privacy breach where the personal details of 110 users were leaked to other app users. 

ConstructSafe – a form of construction accreditation – landed a $1.5m deal with the NZTA to develop a competency assessment scheme for workers on roading projects similar to existing programmes.

The Deloitte report, which was allegedly ready to be published three weeks ago, concludes McMullan hadn’t declared a conflict of interest in relation to Riding's companies, but had approved payments to those entities.

Changes made

An NZTA spokesman told Newsroom the agency intends to publish the independent report, “as we have done with other related reports”.

“We are currently in the process of engaging with stakeholders in relation to the release of the report, and intend to publish the report when this engagement has been completed.”

The spokesman added practices identified in the review were unacceptable and changes have been made in response to the report’s recommendations, including improving the management of conflicts of interest.

“The report details a wide range of serious issues relating to work which was overseen by the NZTA’s former Zero Harm manager [McMullan] between 2014 and 2018,” the spokesman says.

“Similar issues were identified in a separate Deloitte report released in May 2019 examining the work undertaken by the former Connected Journeys Solutions group, which was led by the same manager.”
 
To read the full Newsroom story, click here.