Napier City Council loses $1.3 million a a pair of buses

August 5th, 2014 at 12:00 pm by David Farrar

This is such an appalling and avoidable waste of money:

Napier’s disastrous art deco buses have been sold for just $25,000 each – meaning the short-lived investment has come at a cost to ratepayers of more than $1.3 million.

The buses were sold at auction by Turners Auctions last week. The Dominion Post contacted the buses’ new owner, who did not wish to be identified, but confirmed he had paid “about” $25,000 for each vehicle.

He said the buses, named Veronica and Belle, were likely to remain in Hawke’s Bay but it was uncertain how or where they would be used.

The council paid $837,000 for the two old US schoolbuses, which were converted into Deco City Discoverer buses in the United States and shipped to New Zealand.

The goal was to provide a tourist link between the popular seaside suburbs of Napier and the city centre.

But when they arrived in Wellington, the buses were found to be unroadworthy, and the council had to repair numerous faults. The total cost, including refitting, shipping, a feasibility study, repairs, bus fittings, and other costs ended up at $1.1m.

NZ has no shortage of tourism companies and private bus operators. If these buses were a good investment for tourism, then a private company would have made the investment. But once again a Council thinks it should compete with the private sector, and the result is a $1.3 million loss for the 22,000 Napier households. That’s around $50 per household gone.

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21 Responses to “Napier City Council loses $1.3 million a a pair of buses”

  1. Rick Rowling (816 comments) says:

    There is incompetence, damned incompetence, and City Council incompetence.

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  2. redqueen (596 comments) says:

    When are we going to prohibit councils from operating commercial ventures? (I would probably expand that to the government as a whole). I understand it makes people ‘feel good’ to know they ‘own’ things in a ‘communal’ sense, but that dim view takes no consideration for the risks associated with commercial ownership and the simple moral hazard involved. The councillors will not be stumping up the loss or face bankruptcy, like a private investor would. That people vote for this sort of nonsense (or its reversal) is utterly barmy.

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  3. Colville (2,318 comments) says:

    Who spends $1,000,000 of their own money on a couple of buses ex USA and never even goes and has a look?

    Oh yeah a Council Officer. Shit its not their money and you can bet your arse they wont get the sack.

    (if I was organising the purchase it was the purrfect reason for a 2 week junket to USA!) :-)

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  4. Lance (2,712 comments) says:

    I know a company that made a mistake like this (and about the same amount of money but involved machinery). It nearly bankrupted a thriving company and took them years to recover with sleepless nights and lots of unpaid hard work to recover.

    A council does it and just shrugs its shoulders.

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  5. David Garrett (7,698 comments) says:

    Isn’t this just the best illustration of why councils should not be in business, but stick to roads rates and rubbish? (And perhaps libraries and swimming pools)

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  6. chris (647 comments) says:

    It seems rather odd that they did a feasibility study *after* they’d already blown a huge wad of cash on buying and converting them (badly, it would seem if another few hundred thousand were required when they got here). Surely the feasibility study should have been done *before* buying them in the first place. Mind you, the fact they still seemed to think it was a feasible idea means there was probably no point doing one before or after.

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  7. Mark (1,502 comments) says:

    @David Garrett 12.24pm I agree 100% with your sentiment here that Councils should stick to infrastructure. The makeup of that infrastructure may change from region to region but there needs to be some fiscal accountability for Local Authorities which is currently not in place

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  8. RRM (10,099 comments) says:

    What an abomination.

    Whoever thought that was a good idea, worth wasting ratepayers’ money on, needs to be shot.

    For reference, here is the sort of thing that was actually on the roads in New Zealand during the 1930s…

    http://www.ferrymeadtramway.org.nz/images/collections/NZR460-DK.jpg

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  9. gump (1,683 comments) says:

    >At that meeting, council tourism services manager Neil Fergus said he was unsure of the buses’ current value, but said the new engines had a minimum value of $50,000 each.

    —————–

    It looks like somebody just got a bargain at the auctions.

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  10. hj (7,156 comments) says:

    Next someone will be suggesting there shouldn’t be any town planning (or RMA)? That’s where all this anti-councils stuff is leading (behind the bike-sheds).

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  11. soundhill1 (311 comments) says:

    “Isn’t this just the best illustration of why councils should not be in business, but stick to roads rates and rubbish? ” Why those? The rubbish collection in Wanganui is private. Is it subsidised? Would you put it back in public domain? Why roads? That’s just susbisidising heavy traffic?

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  12. backster (2,195 comments) says:

    Who did the feasibility study and how feasible did they say it was?…….And how much did they charge?

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  13. Maggy Wassilieff (483 comments) says:

    And lets not forget that fabulous tourist money-pit Zealandia. This once acclaimed venture was never going to cost the rate-payers of Wellington a cent.
    All talk. 2 decades on and the place hasn’t got a clue how to run as a self-supporting business.
    Ratepayers of Wellington can kiss their $10.4M loan to Zealandia goodbye as they shell-out each year for the salaries of this over-staffed embarrassment.

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  14. BlairM (2,340 comments) says:

    I can’t even begin to comprehend how insane all this is. How does a bus cost $400k?!!!

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  15. dirty harry (525 comments) says:

    smells of Tony Marriott ex chc town clerk…

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  16. howitis (29 comments) says:

    The thing to note about Councils is that they don’t actually do much. Mention of roads and rubbish. eg Auckland Council does not build one metre of road. It is all contracted out. It does not collect any rubbish – it is all contracted out. Council is largely one big overhead. It needs to be seriously downsized.
    ARC about 5 years ago lost $2m bringing LA Galaxy and Beckham to Auckland. Wellington and Kapiti ratepayers had to chip in to top up the $4m paid to the multi millionaire philanderer Tiger Woods because the private backers just did not come up with the money.
    Councils all over NZ need to be stripped to core as they are largely contract managers. Instead they are becoming self perpetuating beasts.
    These were old schoolbuses. Heck the technology of these buses is really old anyway. They are mass produced from an old design.

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  17. MH (830 comments) says:

    I think originally they were just meant to order a couple of busts for a permanent art double decko display….

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  18. David Garrett (7,698 comments) says:

    I recall a meeting with the then mayor of rodney when iwas an MP I began by asking her what I go for my $1500 a year since I get my water from the sky, dispose of my own shit thru septic tank, and pay per bag to dispose of rubbish. ..the meeting went downhill from there.

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  19. ben (2,279 comments) says:

    What about the estimated $5 trillion in wider economic benefits (© BERL) from those two buses?

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  20. KiwiGreg (3,278 comments) says:

    Auckland City spending $1.3m to replace “friendship garden” which they tore up (I think last year). Government of any description will = waste at some level but these councils are just taking the piss.

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  21. OlderChas (25 comments) says:

    I saw that KiwiGreg – and it is costing $269,000 just to design the garden! Design it? For heavens sake don’t they have photos of what the garden they are replacing looked like? If so – design work done! Who is getting paid $269,000 of my money for nothing?

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