A decision to bring engineering operations back in-house by the Queenstown Lakes District Council is not an admission of failure, CEO Duncan Field says.
The council announced on Tuesday it was bringing not-for-profit company Lakes Engineering Ltd back in-house.
Mr Field said the move would save $800,000 a year and eliminate continual "frustration and communications" between separate departments at the council and Lakes Engineering.
Twelve staff employed by Lakes Engineering will keep their jobs and be employed by the council.
The move was made to ensure the "two entities" became one, Mr Field said.
Bringing council's engineering back in-house after more than a decade of troubled operations was not an admission of failure, he said.
A resolution to contract engineering operations to the privately-owned consulting firm Imtech was made in 1998, before Mr Field arrived at the QLDC.
A decision to contract services to a partially-owned council company, Alpine Infrastructure Ltd, three years before the Imtech contract expired, was taken on specialist advice, he said.
Mr Field hailed the Alpine deal - at the time - as a contract which would deliver a "better deal for the community" through cost savings and greater transparency.
The contract ended up on the steps of the Court of Appeal, after the council dealt with a dispute with the 80% majority shareholders in a series of public-excluded council meetings.
Lakes Engineering Ltd was formed to take over services from the failed Alpine bid.
It was wholly owned by the council and responsible for engineering maintenance and project managing many of the councils' capital projects for roading, water and sewerage.
The council expected that its total operating and capital expenditure in 2009 on roading, water, sewerage and waste would total about $58 million.
The council will also maintain management of the long-term roading, water and waste assets, valued at about $600 million, in the interests of the community.
Mr Field and Lakes Engineering chairman Trevor Tattersfield acknowledged that since the establishment of the company in 2007, there were frustrations on both sides about achieving the necessary clarity of roles between the two organisations.
A joint working party is to be set up to "begin to define" the organisation and structure of the new entity, Mr Tattersfield said.
Full circle
1998: QLDC passes resolution to contract engineering services for 10 years to newly created company, Imtech.2005: QLDC moves to bring some engineering functions back in-house and forms Alpine Infrastructure Ltd.
2006: QLDC relationship with Alpine Ltd's 80% majority shareholder, private company Dufill Watts and King Ltd (DWK) breaks down.
2006: DWK takes QLDC to Court of Appeal. Court action avoided by 11th hour settlement. Dispute costs ratepayers $1.92 million.
2007: QLDC forms Lakes Engineering Ltd, a "wholly owned not-for-profit company", to to take over failed Alpine Ltd contract.
2009: QLDC scraps Lakes Engineering and brings services back in house.
