An independent review of the electricity network in Dunedin and Central Otago by Deloitte is recommending the management separation of Aurora Energy Limited from lines company Delta.
Dunedin City Holdings Limited (DCHL) says it will move to implementing all of the recommendations in the Deloitte review of the electrical network maintenance processes.
Deloitte’s report is recommending the enhancement of health and safety systems due to the age of the network, and it says Aurora and Delta should have different board members with no commonality of directors and separate chief executive officers.
The Deloitte review also recommends the creation of competitive tension between Aurora and Delta for the provision of services and that asset management planning needs to have a longer term horizon, such as 30 years.
The review also suggests investing in an asset management system that focuses on outcomes and performance.
DCHL chair Graham Crombie says in line with the Deloitte recommendation DCHL is committed to the separation of the governance teams of Aurora and Delta and will work with the companies to align this with the organisational separation.
“Both the boards of DCHL and Aurora accept the findings of the report in full, and they have moved already to start to address the matters raised. Some changes will occur short term and others will take longer to evaluate further and implement,” says Crombie.
The review was performed when a former worker raised health and safety issues.
The Deloitte review found that the Board and management of Aurora need to adopt a more transparent approach with staff and public about health and safety.
Both the chair Ian Parton and long-term director Stuart McLauchlan have not sought reappointment which has enabled the changes to the Board which include Steve Thompson, a newly appointed director, being elected Chair.
Crombie says Dunedin-based Thompson will help to ensure the company’s management has the necessary support to implement a wide range of changes.
Thompson was previously a Tax Partner and Office Managing Partner with Deloitte in Dunedin but retired from the partnership in May 2015.
He has held some governance roles since 1998 covering a range of businesses involved in the energy industry, contracting, property development and investment, manufacturing and professional services.
Also Brian Wood (current Director of DCHL) has also been appointed to the board to align DCHL interests and to assist the transition. He has had experience in the civil engineering and energy sectors, particularly in lines companies.
Crombie says these governance changes will ensure the immediate operational enhancements focus on the evaluation and implementation of the structural changes which will allow Aurora to focus solely on asset management.
“That will include implementing the adjusted pole replacement programme, investing in updated asset management systems and implementing any recommendations from both the pending WorkSafe New Zealand and Commerce Commission reviews,” says Crombie.
“The health and safety of our workers and the public are important to us, and we want to regain their confidence that our network is up to standard, he says.
The Deloitte review report is available online at dunedin.govt.nz/dchl
