Watercare's ability to charge for services enables timely investment in infrastructure
“Watercare's new asset management plan released this week demonstrates the value of having a strategically capable
specialist infrastructure provider with the ability to set prices to fund growth," says Stephen Selwood CEO of the New
Zealand Council for Infrastructure Development.
"Auckland’s water Council-Controlled Organisation (CCO) 20 year asset management plan details a $4.9 billion fully
funded capital spend over the next decade aligned with the Council’s vision for growth. Approximately $3 billion will be
directed towards wastewater provision and $2 billion towards water supply.
“In addition, some $2.6 billion will be allocated to operational spending, signalling a total $7.4 billion spend overall
by 2026 and $18.4 billion over 20 years.
“Investment over the next decade will ensure provision for a further 195,000 dwellings across the region on top of
present capacity for 45,000 more dwellings, exceeding population growth projections.
“Timely investment ahead of demand will help unlock developable land and take pressure off house prices.
“The ability to look out 10 and 20 years and produce a fully funded investment programme is made possible by Watercare’s
consolidation of activities inside a special purpose, non-profit council company resourced by user charges.
“Having the ability to charge customers directly to fund future investment to support growth is fundamental to the
success of this model.
“Compare this situation to other publicly owned entities like Auckland Transport and dozens of council funded water
programmes where investment decisions are more influenced by politics than by good asset management.
“Auckland faces a transport funding gap of up to $20 billion over the next 30 years having assumed a legacy of
underinvestment that goes back some decades and can’t use prices to raise revenue or send price signals to users. The
result is congestion.
“Many local authorities across the nation have water renewal and upgrade programmes that remain unfunded. Local
politicians are fearful of ratepayer reaction to rates increases so aren’t funding investment needed to meet basic
levels of service.
“Although Watercare’s AMP does not contain a detailed investment pipeline, this is something Watercare will no doubt
develop over subsequent iterations.
“Comprising one third of New Zealand’s urban water sector, Watercare has the capacity to send strong forward signals to
the supply market and drive best value from appropriately scaled business partners.
“This kind of CCO model is worthy of serious consideration by other Councils, many of whom lack the scale, expertise and
funding needed to enable timely investment in water infrastructure services,” Selwood says.
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