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Merging our water services with 22 others

by Daran Ponter
As some of you will be aware, the Regional Council provides bulk water to the four metropolitan councils – Porirua, Wellington, Lower Hutt and Upper Hutt. It is the only regional council providing water services.

Our bulk water infrastructure is well maintained and in good shape (note I am talking about regional council bulk water assets, not your local council’s piping infrastructure). Greater Wellington’s assets are managed by Wellington Water.

Following the Havelock North water contamination event in 2016, the Government examined the regulatory and delivery environment for water services (drinking water, waste water and storm water). As a result they established Taumata Arowai, a new water services regulator to administer and enforce a new drinking water regulatory system. The Government also decided to take a look at the way water services are delivered across the country. (85% of the country has water delivered by Councils. The rest are on private supplies).

A report by the Water Industry Commission for Scotland (WICS) estimates that New Zealand will need to invest between $120 billion to $185 billion in our three waters infrastructure over the next 30 years to meet drinking water and environmental standards and provide for future population growth.

The Government’s reform proposes putting all water services (drinking water, waste water and storm water) into four entities. Greater Wellington is in entity C with 22 other Councils covering the top of the South Island, the Wellington region and the east coast of the North Island.

The entities will have an independent board and although Councils would be owners, that would not include a shareholding interest. It is intended that the entities have the scale, capacity and capability to improve delivery at an affordable cost. A suite of mechanisms would protect Maori/iwi rights and interests, and prevent privatisation. An economic regulator would be appointed to protect consumer interests and to provide strong incentives for performance.

All of this information (and much more) is available on the Department of Internal Affairs website. The Department has done a great deal of work on this issue for the last several years.

The Government has given Councils eight weeks (till the end of September) to consider the data and analysis underpinning the reform proposal, as well as its likely implications for the Council, the region and the people who live and work here. No decisions are required. By the end of September we expect the Government will have decided on its next process steps.

This is a very big issue for all communities and councils. Water is an essential public good, and it’s clear that as a country we cannot continue as we are. We need to get this right, weighing up public health, environmental and economic considerations over the long-term.

Critically, it is important to understand that environmental requirements are due to increase significantly. So even those Councils with well-maintained infrastructure will need to consider the significant investment they will need to make over the coming generations to keep pace with environmental requirements.

The proposed reforms represent the Government’s attempt to wrestle with that complex challenge. The Council is reviewing the details to assess its implications.

Daran Ponter is chair of the Greater Wellington Regional Council. This article was first published yesterday on Facebook.

37 comments:

  1. Claire, 9. August 2021, 10:43

    I totally agree with the water carve up. Councils do not have the expertise. Water should be the same all around NZ and to first world standards.

     
  2. greenwelly, 9. August 2021, 11:09

    Given that this is probably the biggest devolution to occur in Local government since the reforms of 1989, does the council intent to put the final decision to a referendum?

     
  3. TrevorH, 9. August 2021, 11:11

    You are correct Cr Ponter, “water is an essential public good”. The proposed merger of all water services into four entities nationally is tantamount to the expropriation of community owned assets and will also make responsibility for the delivery of services more remote and less accountable than at present. While it is true that the Wellington City Council have dropped the ball on the 3 waters until recently, other councils have done a good job. If Internal Affairs “have done a great deal of work on the issue over the last several years”, it is not apparent from the infantile and misleading advertising campaign the government is running. These proposals must be opposed.

     
  4. bsmith, 9. August 2021, 11:47

    It’s such a big issue, the only option you have, before giving away ratepayers’ (paid for) assets, is to hold a referendum.

     
  5. michael, 9. August 2021, 15:01

    It’s well past time for a change! Like many others, the WCC abdicated their basic responsibilities by outsourcing and then underfunding infrastructure in preference for “vanity and keep staff in work” projects. Now the long-suffering ratepayers are faced with the legacy of years of underfunding and mismanagement, so why on earth would we want to continue down the same track?

     
  6. Peter S, 10. August 2021, 0:34

    Thanks for the overview Daran. Any proposal to devolve the “localness” of local government should be viewed with great suspicion and as an affront to democracy. The model we have in the Wellington region is a perfectly workable one. It’s just a shame that some councils have lost the plot on infrastructure maintenance and were distracted by building stadiums* and convention centres etc (I’m looking at you here, Andy).
    Only a naive person would believe that a huge restructure such as this will result in lowering the cost to ratepayers. But plenty of rich pickings for consultants and managers. Maybe a better model might be a government backed contestable fund that councils compete for based on suitable criteria.
    * Yes, you language pedants, I did have Latin classes at high school, but I still think it’s silly to maintain the ancient plural word endings. Hmmmm, is it “forums” or “fora”?

     
  7. Steve Doole, 10. August 2021, 9:05

    Will amalgamation of water control really make any difference? Amalgamation happened in England decades ago. In recent years one of the largest water businesses by number of people supplied to there is being fined for sewage overflows.

     
  8. TrevorH, 10. August 2021, 12:46

    After the power outages last night, we should be grateful that our water supplies are locally controlled.

     
  9. Joolz, 10. August 2021, 14:10

    Greenwelly and Bsmith. We have a “referendum” every three years called a general election. Referendums are a recipe for even more paralysis than we have already. Water was municipalised in the late nineteenth century because private companies extracted maximum profits at the expense of public health and maintenance of infrastructure. Water-borne diseases caused by faeces leaking into the water supply led to cholera epidemics, etc. Fast-forward to today and we have essentially devolved council “ownership” to private companies – 74 in total – that run our water infrastructure. No way is that an efficient management model and no way is it sustainable for a population of 5 million people. Havelock North was a nineteenth century event and a warning to get our acts together. Remember that we got rid of the people on councils (and government) with the practical expertise to run water, so we need a sensible solution. I’m with Daran on this. The status quo is not working, clearly.

     
  10. Andrew Nichols, 10. August 2021, 14:11

    After the power outages last night, we should be grateful that our water supplies are locally controlled. Uh. It shows the opposite. The Mad Max Bradford destruction of Electricorp and the fragmentation of the system into an artificial market for a nation with a population smaller than most decent sized cities overseas and a country that would fit into a tiny corner of Queensland all who get by with no effective competition. Had Electricorp still existed we would have an integrated publicly owned system with levels of service for customers set by engineers commissioned to keep the lights on, not fiddling the system to maximise returns to investors. A bold government in this time of global warming challenges would renationalise the lot or establish a regulator supremo to control the whole system independent of the bloodsucking commercial enterprises that run it at the moment.

     
  11. Chlöe Swarbrick, 10. August 2021, 14:25

    These power outages are the result of decades of under-investment in our grid. Conflating this with moves to end reliance on fossil fuels is misleading the public; it takes years for decisions of today to reach infrastructure. That’s the point. [via twitter]

     
  12. Claire, 10. August 2021, 15:15

    Neither power nor water should be private. But not run by hapless councils either. A govt owned water corp and electricity provider probably is best. Two essential services. But we will have to wait till Rio Tinto has left the house. This frees up 13% of power in NZ.

     
  13. bsmith, 10. August 2021, 15:16

    Actually Chloe it has nothing to do with under investment, and all to do with not turning on extra capacity when needed.

     
  14. bsmith, 10. August 2021, 15:25

    You’re correct Joolz we do. It must also be noted that nowhere in Labor’s manifesto, prior to the last election, was there any mention of putting ratepayers’ water assets into corporate hands. Havelock North was unfortunately a one off, promoted to infer that the whole country’s water is third world.

     
  15. Joolz, 10. August 2021, 15:27

    I agree with Andrew. 100%. Time to end the neoliberalism experiment that made price-gouging legal back in the 1980s and permitted our publicly-owned infrastructure, built up over the generations, to be looted/asset-stripped by a select few, who shaped the policy then did very nicely out of the lolly-scramble. Whether we’re talking power, health, housing, supermarkets or infrastructure, all roads lead back to the decisions made by the Lange, Bolger and most recently Key governments (which was effectively Rogernomics round 3). It’s my guess that the narrative that conflates failing infrastructure with climate change policies is very deliberate, managed by those with vested interests who have profited very nicely with few if any rules to rein them in across the last 4 decades. Time to serve them notice that the game is up.

     
  16. Dave B, 10. August 2021, 17:16

    Closing a fully-functioning, 100% clean and green aluminium smelter is madness, as long as the world still needs aluminium. Why is Rio Tinto unable to make Tiwai Point succeed? Is there someone else that could make better go of it? While it might seem good to divert the environmentally ‘clean’ power from Manapouri for other purposes, the real loss in decommissioning the smelter will be major if that aluminium ends up being made elsewhere in the world by non environmentally-clean means. This is as nonsensical as Wellington throwing away its trolleybuses.

     
  17. Claire, 10. August 2021, 18:33

    Dave B: they are using 13% of NZ’s power for goodness sake. We need that for things other than a foreign company taking profit offshore. Sure 1000 people will need other jobs but there is a very long signpost here!

     
  18. Robert Reid, 10. August 2021, 23:23

    Tell me again why we are subsidising Rio Tinto to take 20%? of our electricity for Tiwai Point at a price well below what a household pays, which means we have to burn coal and have blackouts to ration the power on a cold night. [via twitter]

     
  19. Ian, 11. August 2021, 7:40

    DaveB: I don’t think anyone could claim Rio Tinto is a “100% clean and green aluminium smelter”. The thousands of tonnes of toxic waste they are trying to leave buried on site as they withdraw tells another story.

     
  20. Brent, 11. August 2021, 11:42

    Re three waters, any body who supports this needs their head read. The suggested reform will be another labour greens stuff up. It’s modelled off Scotland which has 7 people per square kilometre, NZ has 2.5, under three waters, Their rural isn’t treated any different to urban? Then Scotland has their water so well under control that they spew millions and millions of litres of raw sewage straight into the sea. Councils are local. When your town’s main water supply bursts during the day (let alone at night) you’ll wait weeks while someone you’ve contacted hundreds of Ks away from the location sends someone to fix it. Local control is totally lost under this three waters plan. Just as as a classic example of lost local control. The only way this three waters would ever float is if there was a fourth option, government funding with complete local council control.

     
  21. Claire, 11. August 2021, 12:31

    Brent: Councils do not have the Billions to fix the issues across NZ. We have NO choice.

     
  22. Trish, 11. August 2021, 17:39

    I’ve been thinking about how much I value public control of my water supply and sewerage. Next October I will be able to exercise my influence by voting for the 5 members from Wellington city. They will join 8 others from Kapiti to Wairarapa. With a bit of luck one of the candidates I like might be appointed to the committee that selects directors for the water company (none of which are GWRC members) or to the committee that monitors the company’s operations but none of its members are elected regional councillors. So when it comes to making a decision, like whether we should spend several million to expand the holding lakes at Te Marua, I’m not sure that my vote would give me any influence, even if I had an opinion, which I don’t (does anyone?). So on reflection, I think that I’d be happier if this important infrastructure service was run by a professional organisation owned by the government.

     
  23. Joolz, 11. August 2021, 18:48

    Brent, my old dad was the “drainage engineer” for the city council years ago. He had the unglamorous job of ensuring that sanitation standards were maintained by overseeing the pipes infrastructure and water supply. Contrary to myth, it was well-run because back in those days, every council had its own engineers and ‘works’ department, that were hives of activity. In fact Wellington was the last major city to close down our works department – under Celia Wade – an incredibly short-sighted and stupid decision, given how much expertise that department held. Nobody is talking about giving up public ownership as far as I know, but the disaster scenarios you speak of with a joined up service need to be challenged, because they’re not based on fact.

     
  24. Ross Clark, 11. August 2021, 22:26

    If local government loses its water assets, the clarion call to see wholesale amalgamations, for economies of scale issues, will be unavoidable. I think that central government is losing patience with much of the NZ local government sector, and the prospect of another revamp, even if it overrode local wishes, may be too tempting.

    Losing water policy would mean that many regional councils would cease to have a distinct role, as well.

     
  25. Henry Filth, 12. August 2021, 5:27

    What will be the measures and metrics of success? What will happen if they indicate failure?

     
  26. bsmith, 12. August 2021, 6:24

    I think there are far greater issues at play here, than simply saying our water systems are not up to standard so we will take them off you, split them up and fix it all for you. Overall the water systems are not in the state they are pictured to be, sure there is maintenance etc, to do, but it is time local councils published what percentage of our rates go towards infrastructure, compared to vain white elephants.

     
  27. Tamatha Paul, 12. August 2021, 15:49

    Personally, I’m not supportive of 4 super Crown entities taking over water! I will never support concentrating more power & resource to the Crown. Some of these super entities will have 100 iwi, not to mention countless hapū. It’s just another structure for hapū to defer to! The solutions to our wasteful and destructive water usage and investment lies in local hapū and communities. Rain water tank collection, greener buildings, wetland replanting etc. Not centralisation and a reduction in accountability. It’s just more neoliberal BS imo. [via twitter]

     
  28. Ray Chung, 12. August 2021, 16:11

    I’d like the auditor-general to study the proposal to have our Three Waters centralised to ascertain whether there are any efficiencies and cost savings. If this brings in another layer of bureaucracy and having more select special-interest groups in the decision-making process, then I’m against it. I just want an efficient system at the minimum cost to tax and ratepayers.

     
  29. TrevorH, 12. August 2021, 16:44

    I agree with Tamatha. Let’s keep it local. Rainwater collection and re-establishing wetlands are excellent ideas to be taken forward.

     
  30. Rebecca Matthews, 12. August 2021, 17:11

    We need to work with government for a good deal that will fix Wellington’s water problems. The alternative will cost Wellingtonians a lot, lot more. [via twitter]

     
  31. Soap on a rope, 12. August 2021, 17:54

    First time I’ve ever agreed with Tamatha. Party politics was there for all to see today when they voted about putting it to a referendum. Keep local government local.

     
  32. michael, 12. August 2021, 22:43

    Rebecca our water problems have happened under local government control so what is going to change if it stays the same?

     
  33. bsmith, 13. August 2021, 6:49

    I think Tamatha Paul’s comments sum up exactly what is wrong with Wgtn Water. Instead of committing to investment in infrastructure, we will have greener buildings, water tanks and wetlands. Councilors are elected to control/maintain council assets/infrastructure for ratepayers.

     
  34. Trish, 13. August 2021, 10:13

    Ross Clark: I don’t see another round of local government amalgamation. Rather the opposite. With regional transport authorities, standardised district planning schemes, standardised building codes/inspections, with four water supply/drainage authorities nationwide and a professional emergency service, there will be very little left to be done by councils as we know them. They could be broken up into local Community Boards dealing with noise complaints, libraries, parks, flower gardens and cycleways.

     
  35. D'Esterre, 15. August 2021, 13:33

    I agree with TrevorH: this proposal must be opposed. Ratepayers have, through Councils, owned these assets since time immemorial. Now the government is proposing to expropriate our property. This is an erosion of democracy. It isn’t neoliberalism: it’s apparently an attempt to introduce big government. But, as usual, this government has aimed at the wrong target: these assets were always locally-owned. They were never previously government-owned. This isn’t electricity. I note that ratepayers elsewhere have characterised this proposal as undemocratic.

    I’m well aware that WCC has failed in its responsibilities regarding the three waters. But it by no means follows that we – or it – should agree to this proposal. Were we to do so, experience says that the last state of our infrastructure will be worse than the first.

     
  36. ex LGM, 15. August 2021, 14:26

    As a person who has been involved in the smooth operation of Council Services and the provision of a service [something foreign to most Councils now] let us not forget the 1980s Labour Government introducing new [radical some may say] concepts in many industries. The Administration of that period underwent severe rationalisation of Local Councils on the pretext of large = more economic = cheaper rates.
    These reforms were based on a simple concept big = good; small = bad. We have seen the direction of Councils since the amalgamation of November 1989 and the “managed” rates increases. We have also observed the level of borrowing Councils have undertaken in building “assets”.
    Councils were encouraged by the subsequent administrations to divest themselves of “Core” services in favour of external contractors who could provide the required service cheaper than Councils’ workforces could achieve. This included the devolution of Professional Engineers and engineering / construction / service divisions in favour of “managers” and “out sourcing”.
    We have seen the local councils in the Greater Wellington area form a CCO called Wellington Water which is supposed to manage the three waters and address all shortcomings and failures in a “timely” and economic manner. This in effect has allowed Councils to do a “Pontius Pilate” washing of their hands of the operation of the infrastructure in favour of more attractive projects.
    I have observed over thirty years the ineffectiveness of the reorganisation into larger units and also observed the decline of Councils fulfilling their obligations to provide basic services for sewer, water, stormwater and roading. Parks and libraries are now on the “hit” list as these are taking monies away from Vanity Projects. Similarly the Administration [Government of the day] has moved away from any direct control or involvement, preferring to blame others when failures occur. It appears that these cumulative failures or non performances are finally becoming unacceptable to the administration and they want to turn back the clock and take over functions when they do not comprehend the complexity of their operation.
    The suggestion that Councils cannot fulfill their obligations has come about by Govt actions. We could be forgiven by considering the proposed change to the Three Waters as another potential failure not just for the people who own the systems but also for our descendants. Councillors and Staff who support such a proposal must look into their conscience and consider the mood of their electorate before committing themselves.

     
  37. TrevorH, 15. August 2021, 19:21

    ex LGM. Brilliant and timely history and commentary.