“It was a lot of money and you would expect ministers to be careful with public money.”
Willis’ office declined to comment.
Finance Minister Nicola Willis.
The ministers’ decision comes as MBIE is already in the firing line over a separate, botched Immigration NZ technology project.
MBIE chief executive Nic Blakely told a parliamentary select committee today that $50.7m had been wasted on the now-abandoned biometric capability upgrades.
MBIE said the decision to halt the Companies Office contract was not linked to the immigration project.
“A business case was prepared to upgrade the Companies Register and leverage new technology,” MBIE market integrity general manager Sanjai Raj told the Herald.
“The upgrade project was a considerable investment with a whole-of-life cost in excess of $50 million. A decision was taken to not progress the business case, and as a result MBIE have not entered a new contract with Foster Moore for the upgrade.”
A source told the Herald: “This has left Foster Moore exposed and has forced the company to enter an aggressive role-disestablishment process, which will result in scores of employees being laid off within the next month”.
The source said about 60 of 160 roles would be disestablished.
“Cabinet’s lack of approval took both MBIE and Foster Moore by surprise as the contract issuing process was well advanced,” said the source.
Do you know more? Email in confidence – shayne.currie@nzme.co.nz
The Herald put the source’s assertions to Foster Moore managing director Nigel Dasler.
He said in a response: “Foster Moore is a privately held company and does not comment on any internal matters in the public domain. We are contractually prohibited from commenting on our customers”.
Foster Moore managing director Nigel Dasler.
The source said Foster Moore had advised staff “to avoid any public reference” to the situation and it had contracted a human resources firm, Hello Monday, to manage the staff cuts.
Hello Monday founder and director Will Allan declined to comment.
Foster Moore is owned by Canadian company Teranet – according to its website it “delivers world-leading registry solutions, helping governments modernise registers, improve transparency, and drive digital transformation”.
It has worked with MBIE on the Companies Office and other registers for more than a decade, but it hasn’t been all plain sailing in recent years. According to a news report two years ago, it was planning to lay off 100 staff at that time.
The online Companies Register holds a trove of information about New Zealand businesses.
The source said the new Companies Office contract would have led to a significant upgrade for the Companies Register.
“This would be a two-year project – a full redesign of the platform,” they said.
“So all new graphics and formatting plus additional search tools and [the] introduction of AI enhancements.”
The source believed ministers got “twitchy” after the separate immigration project issues.
“Cabinet chose to defer any sign-off. I dare say they did not even consider the human impact of their decision.”
Raj said MBIE managed a range of registers, including the Companies Register, and these held information “on a wide range of business entities”.
“These business registers provide information, guidance, and support for businesses to understand and comply with the law.”
Ministers had asked officials to explore alternative options.
“This decision is not linked to the [Immigration] BCU project,” said Raj.
He said there were existing contracts with Foster Moore to support and maintain the current register.
“We appreciate the effort that has been put into this project so far. The work undertaken to date provides a valuable foundation.
“MBIE will work closely with customers and stakeholders to ensure they are updated about next steps and what it means for them.
“Any contract information is commercial and in confidence, and we are unable to comment on it.”
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.