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Hauraki Rail Fiasco

The reason that the relevant information regarding the Hauraki Tail Trail, and its Trust has been so hard to come by became patently obvious at today's Council meeting.

It is simply this - the Trust is effectively insolvent, and appears to have been in this position for some time, even after allowing for balance date debt owed by the three settlors being met. Now we know why all the non iwi trustees have been so keen to put distance between themselves and the Trust - even one of the iwi trustees has now resigned, leaving only Wati Namane and a single colleague to face the music when the chairs stop revolving. Could it be that there may be an element of ignorance over the liability applying to trustees who continue to knowingly trade and incur debt after insolvency, regardless of promised contributions by the settlors/underwriters. 

I ask this question because it was perfectly obvious during today's meeting that the significance of the situation did not escape the qualified accountants aboard our expanded Council - Keith Johnston and Strat Peters were obviously concerned, and who could blame them. Leach was all bluff and bluster, either in trying to shut down the conversation, or in trying to word a resolution that would frame the TCDC response to Hauraki District Council request to meet its obligation under its MOU. This relates to its $1m contribution that is meant to cover its share of the K2K section of the Trail about to get under way.

HDC had sent through an email at 5.30 last evening, obviously in a desperate attempt to secure confirmation of the payment at today's meeting along the following lines:

Hi Glenn

Further to our conversation: it is agreed that, should TCDC approve their funding contribution, we will construct the trail from Kopu to the POkorokoro Miranda Stream Bridge immediately north of the Miranda T­ Junction. This work will include the clip-on to the Piako River Bridge to be funded by NZTA. This will give a continuous trail from Kopu to the Bridge just  beyond the T-Junction.

The trail will generally be located on Stopbanks and within the road reserve up a portion of Front Miranda Road but will be well set back from the road. It will also make use of Shelley Beach Road and Buchanan Road - both very low trafficked roads.

Regards Adrian

Adrian de Laborde   Engineering Services Manager

Our Council, in its wisdom, decided in open meeting (no confidences requested, or granted!) that it had the upper hand and that it would seek to use this $1m leverage to ensure that HDC finally came to the party to seriously discuss the future of the Trust, and all other outstanding issues surrounding the operation of the Trail. Leach also wants the costs of the K2K section more equitably shared between the three councils - something that has rankled ever since Matamata Piako slid out of any obligation for that sector under the current MOU.

The actual wording of the resolution became a matter of great import when Greg Hampton pointed out that he had been in discussions with HDC for over a year, to no avail. He was assigned the task of finalising the wording for later in the meeting, after I had left, but he did promise to email me the final wording. It is now 6pm, and I am still waiting!

At least one member (French) was concerned that such a resolution may push Tregidga into a corner and cause HDC to walk away. The HRTT would certainly be in a pickle if that were the case because clearly it is relying on the TCDC $1m contribution to bail it out - a great way to dissipate what is meant to be a capital contribution to the K2K stage.

French also queried the wildly differing annual budgets out 10 years. He was not the only one around the table who appeared unaware of the several hundred thousand dollars required at five year intervals to top up the stop-banks. How they could have been unaware of this critical long term commitment is quite beyond me - they surely have just not been paying attention as it has always been the 'bee in the bonnet' of K2K - easy to forget, but an irreducible irritant!

Even tyro business  people will be wondering at this point what the hell is going on. I don't intend to sugar-coat the pill - but it is precisely the imminent disaster that I have been predicting for some time, based on inadequate evidence, until today. Our Council may only be bit-players in this drama with HDC playing the lead role through supervising the  PTO (Principle Trail Operator), and compiling the accounts - regularly presented late according to Wati Namane, but it has a responsibility to keep its members, and rate-payers fully informed - a responsibility that has not been adequately fulfilled to date, even since CEO Hammond joined the Trust as TCDC 'temporary' representative. 

I am not in the "I told you so" business, but despite all the claims of this venture having been a wonderful success story with numbers of users well in excess of budget, only 2% of users have stayed overnight against the 10% predicted. Statistics regarding Thames - Paeroa users have been woefully inadequate for reasons about which we can only speculate, though Leach claimed today that Thames had "by far the best" accommodation figures - sans hard evidence. Grand predictions that this will be reversed (including by Leach today!) with the completion of K2K and beyond remain just that and again not backed up with any hard evidence.

But no matter what mistakes have been made in the past in regard to governance and management, it is now time for a bloody hard look by commercial interests who know how to make a venture of this nature actually work and make money. The HRT has suffered from input from too many dreamers, optimists and amateurs.

I hope that the HDC accept the conditions laid down by TCDC at today's meeting. If they don't then I predict that this whole shebang will go down the gurgler, and at the present rate of track deterioration it won't last long even as a relic. In the meantime, Wati Namane and his remaining colleague had better start looking into  their own interests by visiting a competent lawyer. There are a few staff who may also care to take a close look at their positions.

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