A West Coast council will investigate all contracts issued by its asset manager after it emerged an Auckland cake shop owner's firm got a contract to upgrade two water treatment plants.
The Westland District Council said the contract with Techno Economics Services, which had no experience with such projects, was on hold. It was investigating all contracts issued by its asset manager, Vivek Goel, in the last three years.
Mr Goel is on leave.
The Serious Fraud Office has an ongoing investigation into the Westland District Council, but will not specify what is being investigated.
Westland Mayor Bruce Smith said he was aware of reports a $7 million contract was awarded to a company run by an Auckland cake decorator with no experience in sewage plants.
The Fairfax report said the contract was to build a sewage plant in Franz Josef.
Mr Smith said no such contract was ever awarded.
Techno Economics Services was due to upgrade two drinking water treatment plants in Whataroa and Kumara, worth $470,000, but the contracts were on hold, Mr Smith said.
Neha Bubna is the sole director and shareholder of Techno Economics Services, a company which was registered with the Companies Office on 14 November 2016.
She is the director and sole shareholder of Cake Culture, a cake decorating company in Waiuku, South Auckland, which has operated since February 2015.
Ms Bubna was contacted for an interview, but said she had no comment. Her South Auckland cake shop has been closed since last week.
Mr Smith said the water upgrade projects went out for public tender and, in December, the tenders committee recommended the contract be awarded to Techno Economics Services.
He said when the tenders came to the council, they rejected them because the company was unknown. The council said the contract could not go ahead without a bond and surety from the company to ensure ratepayers were not exposed, Mr Smith said.
"[The contract] then came back to our January meeting and the company involved had agreed to put up a $100,000 bond and to substantial retentions, and the contracts were let. At this stage no money has changed hands and the contracts are on hold."
Mr Smith said the company had no experience with water treatment projects in New Zealand or Australia, but the documentation it supplied to the tenders committee was impressive.
Mr Smith said looking into all contracts issued by Mr Goel was a "precautionary approach".
"We are ... ensuring that we look under every stone to ensure that if there is an issue we know what it is. Fair to say we haven't come across one yet, but we are looking."