A review conducted by the Water Industry Commission for Scotland (WICS) has found that Auckland’s water utility, Watercare, is performing ahead of New Zealand peers but needs to be able to invest more to deliver fully on its potential.
WICS examined Watercare’s economic performance for the 2018/2019 financial year and compared it to other water providers in New Zealand and the UK.
WICS chief executive Alan Sutherland explained the report’s findings in a presentation to Auckland councillors today, when Watercare outlined its updated Asset Management Plan.
“It is clear that Watercare’s improved performance since 2010 has benefited Aucklanders. Other metropolitan areas report unit operating costs that are 50% to 100% higher. But there are steps that need to be taken to ensure Watercare can match the performance of leading UK water providers,” he said.
“In Scotland, allowing resources to Scottish Water to ‘spend to save’ was critical in kick-starting what became a huge leap forward in performance. Watercare could clearly similarly benefit. Building on what has been achieved is going to be critical as it is clear that Watercare will need to invest much more year-on-year in renewing and improving assets. This investment will ultimately reduce unplanned maintenance and operational costs.
“Comparisons with the UK suggest that if Watercare were able to borrow based on its financial performance, its customers could benefit from additional investment to improve services and environmental outcomes. This would clearly be better value for money for customers and could be delivered with lower annual price increases than previously planned - capped at about 2.5% for 10 years.”
“Watercare should be recognised for their bravery in seeking this determination. It demonstrates a level of maturity – that the company is willing to expose its performance in order to identify areas for improvement,” said Sutherland.