30 Jun 2021

Water reforms: New entities proposed to take responsibility of infrastructure

10:39 am on 30 June 2021

Further details have been released of the biggest shake-up of water and sewage infrastructure seen in generations.

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Local Government Minister Nanaia Mahuta. Photo: RNZ / Samuel Rillstone

They outlined four publicly owned entities covering Auckland, Northland, central North Island including Taranaki, east coast North Island, including the top of the South Island, and a fourth covering the remainder of the South Island.

The four entities would be run by boards appointed with input from councils and with expertise in water infrastructure.

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Photo: Supplied / Department of Internal Affair

They would also include Māori representation.

In a statement, Local Government Minister Nanaia Mahuta said without the reforms, councils would struggle to pay for an estimated $120 billion to $185bn worth of infrastructure needed over the next three decades.

She laid bare the impact years of under-investment have had.

"We have seen the effects of a system in crisis: fatalities from bacteria in drinking water, broken sewer pipes, poorly treated wastewater running into streams and rivers, no-swim notices at the beaches, regular boil-water notices, and lead contamination."

The cost she believed ratepayers would be forced to shoulder was also laid out with an average annual bill ranging from $1900 to $9000 by 2051 if the status quo was retained.

She compared that to a bill of between $800 and $1640 if the changes were adopted.

"Without this change, communities are going to either face very large bills for water services; or infrastructure will continue to degrade with ongoing health and environmental consequences. Both of these outcomes are unacceptable," she said.

The downside for councils was they would no longer be able to include billions of dollars worth of infrastructure paid for over decades as an asset on their books.

While they would technically own the infrastructure, there would be no financial recognition of this ownership and this would limit their ability to borrow against it.

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