The state-owned enterprise Kordia has pulled out of its contract to design and build the country’s new emergency service network.?

Kordia and Christchurch technology company Tait Communications won the contract to build the new network, which is made up of more than 400 radio sites, in November 2022. ?

However this week Kordia interim chief executive?Neil Livingston confirmed the enterprise would divest its shares to Tait, who would take on the contract solo.?

※Kordia’s role in the project will continue with our scope focusing on our core strengths; mission-critical infrastructure and core network services, as well as co-location on Kordia-owned sites.

※Kordia and Tait designed this reset to simplify both the operational and governance decisions within the vendor to help deliver this critical project on time. Kordia will continue to be involved with the Public Safety Network as a subcontractor, with a scope centred around our core strengths - providing mission-critical build, design, and co-location services.§

Kordia will be a sub-contractor for the project instead.?

※By stepping into a subcontractor role on the Public Safety Network Land Mobile Radio, Kordia can free up resources allowing us to continue growing our business lines such as communications infrastructure, broadcast and maritime services, whilst also investing in high-growth areas such as cloud and cyber security,§ Livingston said. ?

Next Generation Critical Communications, a business unit within the police,?is responsible for developing the network on behalf of Fire and Emergency, police, Hato Hone St John and Wellington Free Ambulance.?

The previous government signed off on the new Public Safety Network solution in August 2022 at a cost of $1.4 billion over 10 years.?

The Minister for State Owned Enterprises, Paul Goldsmith, said he had been kept in the loop with the decision, which?was ultimately up to Kordia’s board to make. ?

※All those decisions are up to the independent board. There was concern about the overall project, so changes have been made.§?

The costs incurred to Kordia associated with the project were referred to by its chair Sophie Haslem earlier this year when announcing its half year result.?

※[Earnings before interest, taxes, depreciation, and amortisation] is $2 million lower year on year, due to softening economic conditions and rising costs across our business, coupled with costs associated with the delivery of the?[Public Safety Network]?project.§?

Those results also confirmed Kordia provided a $475,000 loan to the joint venture, with both parties liable for a non-performance penalty of up to $5m. ?

Kordia said the commercial viability aspect was not a factor that led to its decision.

The project has faced delays. A pilot site was supposed to be built by October last year which never eventuated.?

The Canterbury region network build was supposed to be done by March this year, ?but has still to be finalised, with Wellington supposed to follow that and be operational from June. ?

The venture has now changed its name to Tait Systems NZ. Tait has confirmed under the new structure things will go faster. ?

※Tait Systems NZ has scaled up, reshaped its operations, and brought experts and additional resource on board and now has the right structure to ensure delivery of all the components of the Land Mobile Radio to emergency services as scheduled.§?

Livingston said Kordia remained committed to the project as a sub-contractor, but supported the decisions ※designed to accelerate the project§.?

In August 2023 police officials told the then-police minister Ginny Andersen that Crown Infrastructure Partners had been involved in an attempt to get the programme back on track.??

※[Next Generation Critical Communications] and CIP have been working closely with Tait Kordia to progress the Land Mobile Radio Solution.?

※Over the last six months a significant amount of effort has gone into working with Tait Kordia to support them to deliver the agreed contract deliverables for the project.§?

Kordia is wholly owned by the Crown but is not part of the public service. Its principal objective is to be a commercially successful business. ?