16 Jul 2020

Overhauling water infrastructure & the quid pro quo

From Nine To Noon, 9:33 am on 16 July 2020

Mechanisms are being devised to ensure proposed publicly-owned regional water entities worth billions of dollars cannot be privatised and sold off in the future.

Under sweeping reforms, the government will give $761 million to councils to kick start a programme to reorganise water assets as independent publicly-owned bodies.

A water treatment pond in South Wairarapa

A water treatment pond in South Wairarapa Photo: SUPPLIED South Wairarapa District Council

Currently over one million New Zealanders do not have access to clean drinking water, wastewater systems are degrading the environment, pipes are ageing and leaking, and the inability to deliver water services ahead of demand has been a critical handbrake on the release of land for housing.

Local Government Minister Nanaia Mahuta tells Kathryn Ryan the status quo was untenable. She says it was clear councils lacked capacity to deliver upgraded infrastructure and meet new water quality standards being introduced as part of the Govenment's reforms.

Councils, which currently own and manage most water services, are being persuaded to accede authority to the new Crown entities envisaged under reforms and get funding to upgrade services while the transition takes place. She promises “an enduring public-ownership model” in return.

Mahuta estimates upgrading drinking water would cost up to $575m and to upgrade waste water treatment plants could cost between $3-to-$5 billion.

In December 2019, the Water Services Regulator Bill was introduced to Parliament. It’s now on its third reading at Parliament, supported by all parties.

The Bill establishes Taumata Arowai as a Crown water regulatory body that will administer and enforce a new drinking water regulatory system and carry out other functions relating to improving the environmental performance of wastewater and stormwater networks.

A complementary Bill, the Water Services Bill, also gives effect to the Government’s package of regulatory reforms, which are intended to address issues highlighted by an inquiry into Havelock North drinking water, and in the Three Waters Review.

The bills come after a waterborne disease in Havelock North affected 5500 residents in August 2016. The campylobacteria outbreak hospitalised 45 people and there were four related deaths.

 “A number of recommendations were made and when we became Government it became very clear that we needed to act in a way that gave New Zealanders an assurance of the health of their drinking water across the country.

“What the report highlighted very clearly was that, while this outbreak happened in Havelock, it could have easily happened elsewhere across the country,” Mahuta says.

With root-and-branch reforms recommended, a two-year process of consultation was initiated within the local government sector responsible for delivering water services. The Government is now pushing for concrete reforms through local funding of infrastructure and has set up a special unit to liaise with council executives to oversee a transition of authority.

“We’ve established a working group to encourage councils to consider locking into a reform agenda,” she says.

“What we want councils to do is think strategically about how they could aggregate service delivery in the water space to be able to gain all the advantages of creating scale and the opportunities it would provide in terms of investment into the water service system.”

Comparative examples overseas have been presented to councils as models of best practice and to highlight the benefits of having that type of scale and resilience. The system operating in northern Tasmania, Australia was one such example.

The regulator will asess storm water, waste water and drinking water quality and determine how much needs to be spent to get systems up to new, robust standards. Initially its remit will focus on delivering on drinking water.

The minister says better urban water planning is needed, especially in regions and cities with high growth. Green solutions to slow and trap storm water using systems like swales and upgrading waste water treatment plants are two initiatives that would improve water quality in harbours and beaches significantly.

She says it is important councils, which own the assets, feel part of the reforms.

The minister says the one-to-five regional authorities envisaged would not be privatised and sold off by a future government, after billions of taxpayers' money has been spent upgrading assets.

“The public’s sentiment, as well as our Government’s commitment, is to an enduring public ownership model. There are mechanisms that we can put in place to ensure that’s it’s very difficult to overturn a publicly-owned model and these are serious and important issues that must be addressed as we’re moving towards the reform and we’re doing that in collaboration with local government."

Mahuta says Auckland’s recent drought highlights a need for strong urban water solutions, including the use of grey water and also the need to factor in climate change when development plans are being made.

She says she understands Auckland’s need to extract water from the Waikato River, but also understands why the Waikato region doesn’t want its own development impeded by Auckland’s long-term over-reliance in its resource.

“There is an acute awareness to ensure that over the next two summers, Auckland has enough water reserve to cater for its existing population and Waikato region is sympathetic to that issue. However, they are also keen to ensure their own growth ambitions are not stunted by a huge take from Auckland without resilience planning.”

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Photo: RNZ

Councils are required to get plans for upgrades in by August and their cuts of the $761 million funds spent by next June. 

“The local economy will primarily benefit very quickly. We’re not mucking around. We’re wanting to ensure that, at this time in a Covid context where revenue is constrained in councils, that we’re doing something significant to partner with councils in terms of investment. We’re also asking them to give serious consideration to the benefits of the reform agenda.”