Evidence to support the rationale for the Water Services Bill isn’t hard to find. Recent events include the high nitrate levels in Nelson’s Richmond water supply and the 2019 prosecutions citing numerous failures in managing wastewater plants around the Clutha District, which resulted in nearly $500,000 in fines. There is a strong argument that the current system is in urgent need of transformation, but how did we get here?
The funding shortfall
In an ideal world, enough money would be available to build, maintain, and operate these assets to cater for population growth and to maintain healthy communities.
The reality is this funding doesn’t go far enough. It’s up to elected members and local government staff to make decisions that are balanced between the provisions for new services to cater for a growing population and the renewal of existing assets that have reached the end of their useful life. This is an oversimplification of the actual situation, as several other factors – including development contributions and central government funding streams - are also at play.
The shortfall in the amount of investment in water infrastructure is a cumulative problem. The need for investment in each subsequent year becomes greater and ‘sweating the asset’ (allowing the assets to extend long beyond its useful life) has become a legitimate asset management tactic. I was once told by a water asset manager that ‘the best way to identify leakage in a network is when the water bursts out of the ground’. Obviously, these tactics are borne out of necessity but it’s concerning to see a growing number of water related incidents across the country.
Economies of scale
Most communities outside of the main centres don’t have the population density to maintain the necessary levels of investment required. The cost of providing water to the tap is a combination of the costs from source abstraction from either rivers, streams, or groundwater bores, treatment to filter out contaminants, disinfection, and tap supply via a pressurised pipe network of varying age and condition.
The same occurs in reverse when managing wastewater. In areas of chronic underinvestment this has resulted in the degradation of the receiving water bodies where network outfalls are situated; be that rivers, lakes, or coastal areas. The assets, intakes, pumpstations, reservoirs and treatment plants, that make up these systems are costly to build, operate, and maintain.
How water reform will help
It’s fair to say that investment decisions that follow local political boundaries don’t necessarily deliver the best outcomes for the wider community, nor are they the most efficient and effective use of resources.
The Water Services Bill will remove water and wastewater management from local government. This has started with the creation of a new, centralised regulatory authority (Taumata Arowai). Initially Taumata Arowai will oversee drinking water – a role traditionally filled by District Health Boards with oversight on the regulation of wastewater and stormwater. Ultimately Taumata Arowai will oversee all three waters; drinking, wastewater and stormwater.
The second stage of reform will see the formation of independent water service entities to manage water supply and wastewater for their respective consumers.
Although some of the decision making, such as the scale and ultimate responsibilities of these entities, hasn’t been confirmed, the implementation timeline has. Water reform will continue at an accelerated pace, with the new water management entities expected to come into being by December 2022/ January 2023.
In some areas the intention of this reform is more progressed than others. Auckland, for example, already has Watercare, an independent, asset owning, Council Controlled Organisation (CCO) that manages water supply and wastewater on behalf of Auckland Council. Although not without its challenges, Watercare’s consumer education and network water quality have improved the way water is managed throughout the Auckland region by centralising a process that was historically managed by eight different local authorities.
Why has it taken so long?
It’s my belief that without a centralised mandate for reform there will always be a concern around equity and the equitable split of resources. This misses the point that true equity in service comes at a cost to everyone. By spreading the costs around the entire populace, the costs to individual consumers is shared. This means priority can be given to the greatest need, which is not necessarily the largest consumer base.
We also need to change the paradigm around water, perhaps thinking of it like the electricity market. We don’t assume the right to a fixed rate for the infinite supply of electricity. Water, like electricity, is both costly to generate/collect, distribute and treat. Some local authorities are already moving to a mixed fee model combining a fixed targeted rate and per cubic metre charge. Watercare has done this since 2012 and recently Waikato District introduced a fixed charge and unit charge for the supply of treated water.
Regulation and management of water form part of the equation, but so does the way consumers value water and the environment. Do we continue to see it as a limitless commodity or start to place a higher value on it? My colleague Troy Brockbank has highlighted the need to acknowledge Te mauri o te wai (the life supporting capacity of water) and prioritise ecosystems that are healthy, protected and enhanced – leading to the restored hauora (health) of our waterways, ensuring the mauri (life force) is enhanced and not further degraded. I’m delighted to see that water reform includes incorporating a Te Ao Māori perspective into our approach to water.
Paul King is Head of Water and Regional Director for WSP New Zealand in Hamilton. His 20 years’ technical experience has been primarily focused on the development of three waters infrastructure throughout Aotearoa New Zealand and the United Kingdom. His background includes two years in local government, five years in land development, and for the last 12 years, he has worked for multinational consultancies. Paul is passionate about water and its role in how we live.