The Star: April 13, 2017

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CERA’s $600k payment to change car park
.kiwi
Thursday April 13 2017
•From page 1
A.B. Investments is owned
by PCML Ltd. Well-known
Christchurch businessman
Philip Carter is a shareholder
and sole director of PCML Ltd.
When The Star asked the
Department of Prime Minister
and Cabinet for a specific
breakdown of the costs that
made up the $600,000, the
request was declined on the basis
“the documents requested do not
exist or cannot be found.”
Emails obtained under the
OIA show that concern within
CERA about the payment led to
the Office of the Auditor
General being asked for advice
about it.
The concerns also led to CERA
engaging Ernst & Young to
review all of its payments over
two years.
Mr Carter has not responded
to The Star. His lawyer said
yesterday the transaction was
documented and approved by
CERA’s audit committee.
Emails obtained by The Star
show on February 5, 2015, Mr
Carter sent an email to CERA
project delivery deputy director
Greg Wilson with the
invoice, which he said was “as
discussed.”
But in an email on
February 9, CERA anchor
projects project director Tim
Anthon said: “We don’t have
600k in the budget to pay for
this.”
On March 4, Mr Carter
emailed Mr Wilson again
about the payment, saying
he had discussed it with then
CERA Christchurch Central
Development Unit director
Warwick Isaacs.
Mr Isaacs told The Star
yesterday he did not remember
the conversation.
“It was a very busy time and I
don’t have any recollection of it
or any issues with it,” he said.
Mr Isaacs left CERA in March,
2015, and was replaced by Baden
Ewart.
Mr Ewart told The Star
yesterday he was informed about
the agreement with Mr Carter
soon after he took on the role.
DEAL: CERA paid
$600,000 for
changes made
to The Crossing
development,
including cutting
a storey from
the car parking
building to
keep it from
shading the Bus
Interchange.
PHOTO: MARTIN
HUNTER
He said it was “unusual”
because of the lack of detail
provided in the invoice, and the
fact the changes asked for did not
have a set value.
“I had a conversation with Mr
Carter about the cost. He said he
had to spend another couple of
hundred thousand on design fees
and so on, but I didn’t get from
him a document which reveals
that explicitly,” he said.
“Usually, we would see
something delivered for that
amount of money, like a physical
construction.”
Mr Ewart said he received legal
advice that the deal was already
binding, because an agreement
had been made and Mr Carter
had already changed his designs
on that basis.
He signed the deal on June 26,
and made the $600,000 payment
to A.B. Investments on July 1.
Office of the Auditor General
spokesman Mike Heine told The
Star an appointed auditor spoke
to CERA chief financial officer
Martin Langridge about the
arrangement in June.
“CERA had concerns about the
invoice and whether there was an
enforceable contract,” he said.
He said the Office of the
Auditor General provided verbal
advice only and was not involved
in the investigation, which was
carried out by CERA.
The DPMC told The Star that
Minister supporting Greater
Christchurch Regeneration
Gerry Brownlee was told about
the payment.
A spokeswoman for Mr
Brownlee told The Star yesterday
he could not respond to
questions because “key people”
were away this week.
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