Water Reform in NZ Features and Timeframe or "Why, What and When" - Presentation to Wellington Mayoral Task Force
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Sensitivity: General
Water Reform in NZ
Features and Timeframe
or “Why, What and When”
Presentation to Wellington Mayoral Task Force
Monday 20 July 2020
Garry Macdonald – Beca LtdSensitivity: General
Historical Reflections and Context (1)
In 2000 the Parliamentary Commissioner for the Environment, after studying the existing
arrangements for water services in NZ, reported:
‘I believe industry and community evidence indicates that the ‘model’ has
now reached the end of its design life. Further incremental tinkering with
the current systems, without going back to first principles of community
water and wastewater needs relevant to the 21st century, will simply
mean the necessary changes will be harder to achieve and more costly at
some time in the future.’
Office of the Parliamentary Commissioner for the Environment. June 2000: Ageing Pipes and Murky
Waters: Urban Water Systems for the 21st Century
http://www.pce.parliament.nz/publications/archive/1997-2006/ageing-pipes-and-murky-waters-
urban-water-system-issues-for-the-21st-centurySensitivity: General
Historical Reflections and Context (2)
Havelock North Drinking Water Inquiry
• To conclude, the Inquiry has found that a compelling case for dedicated and aggregated suppliers
being set up as an effective and affordable means to improve compliance, competence and
accountability has been established. The Government should make a decisive and definitive
assessment of whether to mandate, or persuade, suppliers to establish aggregated dedicated
water suppliers.
• If necessary, this should be mandated, but there seems to the Inquiry to be substantial scope, with
effective leadership, for suppliers to be persuaded to subscribe to the idea, and for it to occur
without legislative or structural changes.
• While there has been staunch political opposition to the idea for some 25 years or more, the
under-resourced and non-compliant state of many suppliers today makes it critically important to
address the idea again. Given the long history of equivocation on this issue (see Appendix 3), a
review and decision by the Government should be actioned as soon as practicable. The risk to
public health of another sizable outbreak to the economy, tourism and New Zealand’s
international reputation of not doing so is simply too high.
https://www.health.govt.nz/our-work/environmental-health/drinking-water/government-inquiry-
havelock-north-drinking-water-outbreakSensitivity: General
Historical Reflections and Context (3)
Government’s 3 Waters Review, Investigations and Reports
• DIA has been managing investigations into NZ Water, Wastewater and
Stormwater Services
• Huge investment required to meet new Drinking Water Standards
(post-Havelock) - $300-600M
• Even larger investment required in upgrading wastewater systems
($3-4.3B) and treatment plants ($2B plus)
• Majority of WWTPs need reconsenting in next 10 years ($100M cost)
• Taumata Arowai (Regulator) office created – formal legislation due
soon
https://www.dia.govt.nz/Three-waters-reviewSensitivity: General
Historical Reflections and Context (4)
Land and Water Forum (LAWF 2009-18)
• Multi-year/multi-party consultation amongst numerous stakeholders –
rural, urban, iwi, public and private sector
• Focussed on state of NZ freshwater quality (stream, rivers, lakes)
• Consensus was – all is not good!
• Culminated in changes to NPS Freshwater Management (NPS-FM) and
National Freshwater Environmental Standards (NES-TM 2020)
http://www.landandwater.org.nz/
https://www.beehive.govt.nz/release/government-act-land-and-water-forum-report
https://www.mfe.govt.nz/fresh-water/freshwater-acts-and-regulations/national-
environmental-standards-freshwaterSensitivity: General
Government’s Proposition – FebJune 2020
https://www.dia.govt.nz/Three-waters-review#progress-update-february-2020
• A much smaller number of dedicated Water & Wastewater Services
Entities
• Number and geographical areas TBD before end of 2020
• Publicly-owned entities established by legislation:
• Assets transferred (along with liabilities/debt) from Councils to these
statutory entities
• Shareholding of entities TBD – most likely to be all Councils in their
geographical area but could also have iwi or Crown partners
• Would have the power to charge for services like other utility companies
• Could include Stormwater in ‘special circumstances’ but preference is
to leave with territorial authorities (Councils)Sensitivity: General
Proposed Timeframe – 2020/2023Sensitivity: General
Current Work Programme – Commercial/Financial
Entity Structure Assets and
and Ownership Liabilities
Central and Local
Government
(Steering Committee)
plus Others (LGFA,
DMO etc
Impact on Local Funding and
Authorities Financing
Governance
Short/Long TermSensitivity: General
Main Discussion/Decision Areas
• Geographical areas
• Form and formation of new entities – companies, CCOs, other
• Shareholders and Shareholding formulae
• New Governance and transition phase from Councils
• Stormwater – in or out
• Valuation and transfer of assets and liabilities
• Pricing and charging for water services
• Regulation and LegalSensitivity: General
Tranche 1 –MOU Three Waters Services Reform
and 2020/21 Grants
• Agreement for Councils to “opt in” to the Reform Process
• To be signed by Territorial Authority by 31 August 2020
• Effective until 30 June 2021 (unless terminated earlier or replaced)
• Access to the $700M+ special TWS fund conditional on TAs signing up to
Funding Agreement and Delivery Plan
• Funding Agreement and Delivery Plan
• Simple template supplied to Crown Infrastructure Partners (CIP) who will
monitor progress against the Plan
• Crown will supply funding to stimulate investment on improvements in water
service delivery, support economic recovery and progress TWS Reform
https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters-reform-
programme/$file/three-waters-reform-memorandum-of-understanding.pdfSensitivity: General
Core Design Features of Reform Programme
Minimum requirements for the design process:
• Water service delivery entities, that are:
• of significant scale (most likely multi-regional) to enable benefits from aggregation to be achieved
over the medium to long-term;
• asset owning entities, with balance sheet separation to support improved access to capital,
alternative funding instruments and improved balance sheet strength;
• structured as statutory entities with appropriate and relevant commercial disciplines and
competency-based boards.
• Delivery of drinking water and wastewater services as a priority, with the ability to
extend to stormwater service provision only where effective and efficient to do so.
• Publicly owned entities, with a preference for collective council ownership.
• Mechanisms for enabling communities to provide input in relation to the new entities.
https://www.dia.govt.nz/diawebsite.nsf/Files/Three-waters-reform-programme/$file/3W-
Reform-Programme-FAQs-15-July-2020.pdfYou can also read
