Auckland ratepayers have already invested billions in their water company, Watercare, and the Government’s Three Waters reforms don’t look promising, mayor Phil Goff says.
Local Government Minister Nanaia Mahuta announced more details of the proposed reforms on Wednesday.
The Government wants to create four publicly owned providers to take responsibility for all of the country’s drinking water, wastewater and stormwater services.
Mahuta says it will save ratepayers thousands of dollars a year and ensure the estimated $120 to $185 billion in investment that’s needed in water services over the next 30 years goes ahead.
But Goff isn’t buying the proposal, which would make Watercare part of a new entity providing services for the whole of Auckland and Northland.
“Aucklanders have invested heavily in building up Watercare’s more than $10 billion worth of assets, with a further $11 billion invested in our current 10-year Budget,” he said.
“Control over those assets, and our ability to ensure that Aucklanders’ needs are put first, is undermined by the reform, which proposes that Auckland Council could have less than 40 per cent of the representation in the governance of the new entity.”
The councils would own the new provider but there wouldn’t be any formal shareholding and no dividend payments to the councils.
Mana whenua would have joint oversight.
Goff said under the Three Waters model, 92 per cent of the new Northland and Auckland water provider’s assets would come from Auckland.
Any attempt to privatise the provider would require a public referendum with 75 per cent support for a sale to go ahead, but Goff said such safeguards could be repealed by a future administration.
“According to the Water Industry Commission for Scotland (WICS) report — the review on which the government is basing its water reform proposals — Auckland is already by far the most efficient and effective water supplier in New Zealand. It has already achieved the scale and professionalism in water supply that the Government is seeking for the country as a whole,” he said.
“The supposed benefit of cheaper water costs, projected to be half the costs of an unreformed sector by 2051—30 years out, simply cannot be relied upon as being real.”
Goff would not comment on whether Auckland would opt out of the new model, a day after Whangārei District Council did just that.
Manurewa-Papakura ward councillor Daniel Newman said he has concerns with the ownership structure and the fact the council wouldn’t hold shares in the new water provider.
He said Auckland needs to have a greater say in and control of a new entity.
“If the overwhelming majority of the assets and infrastructure are provided by Auckland you would think we would have the majority of the shares.”
Watercare was hit hard by the financial impact of Covid-19 and the region’s drought. Just before Christmas, its board approved an annual price increase of 7 per cent for 2021 and 2022, 9.5 per cent from 2023 to 2029, and 3.5 per cent until 2031.
The board cited a loss of revenue as the cause, with the region’s ongoing drought adding $209 million in costs.
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