At the moment 67 different councils, including Porirua, own and operate the majority of the country’s water services. However, councils face a number of challenges to deliver these in an affordable way into the future, including ageing infrastructure, growth and the impacts of climate change.
The Government’s reform proposes putting all water services into four larger public entities. Porirua would be in Entity C (Eastern-Central) with 21 other councils from the top of the South Island, the Wellington region and the east coast of the North Island.
Water Services Entity Bill
The Department of Internal Affairs are currently consulting on a new Bill to establish the four Water Services Entities. The Bill sets out the ownership, governance, accountability arrangements relating to these entities and includes essential provisions for ongoing public ownership and engagement, and safeguards against future privatisation.
The Bill also provides for transitional arrangements relating to the establishment and governance of the new entities; strategic direction, planning and reporting; employment; and the oversight powers of the Department of Internal Affairs during establishment.
We will be submitting on this Bill. If you wish to you can find the relevant information here: www.dia.govt.nz/Three-Waters-Reform-Programme
This is a big issue for all Councils and one we are taking very seriously to ensure a good outcome for Porirua. It is clear things cannot continue as they are, but the way forward has not been decided yet.
Changes will not come into place until mid 2024 and in the meantime, we will continue to deliver water services through Wellington Water, the region’s joint Council controlled organisation. Porirua, Wellington, Hutt, Upper Hutt, Greater Wellington and South Wairarapa Councils are all owners in Wellington Water
It’s early days and there is a lot to work though. We will keep this page updated as things evolve, and there is extensive information on the Department of Internal Affairs’ website and on the Local Government New Zealand website.
Background – why reform is being considered
- In 2016, Havelock North's water became contaminated and many people in the township fell ill, with a number of deaths. This sparked the Government to examine the regulatory and delivery environment for "three waters" services (drinking water, wastewater and stormwater).
- The government subsequently established Taumata Arowai, a new water services regulator, to administer and enforce a new drinking water regulatory system. Once Taumata Arowai is fully functional, it will oversee and administer an expanded and strengthened drinking water regulatory system and oversee the environmental performance of wastewater and stormwater networks.
- The Government has also looked at the way water services are delivered across the country (around 85% of the country has drinking water delivered by Councils. The rest are on private supplies).
- Through this process, the Government commissioned a analysis from Water Industry Commission for Scotland (WICS) which estimates New Zealand would need to invest between $120 billion to $185 billion in its three waters infrastructure over the next 30 years to meet drinking water and environmental standards and provide for future population growth.
What’s happened so far
- Last year, Porirua City Council (along with every other Council in the country) signed a Memorandum of Understanding (MOU), agreeing to work with the Government on water reform. That didn’t require Porirua city to agree to opt into the reform.
- In exchange, we received what the Government has called fiscal stimulus money. In our case this was $59m for our region. This money went into our water services (mainly renewals of our pipes).
- Since the latest round of announcements (in July 2021), the Government gave Councils until the end of September 2021 to analyse the WICS data and information provided by the DIA and consider the implications for the Council, the city and the people who live and work here. No decisions are required. Following feedback from councils, we then expect the Government will make decisions on its next steps in the process.
- In April 2022, Government confirmed they will be progressing with water reform and that Councils will maintain ownership of the Water Entities.
Where things are at
- Under the Government's proposal, Porirua would be part of "Entity C" along with 21 other councils from the top of the South Island, the Wellington region and the east coast of the North Island.
- The proposal indicates the entities would have an independent board which would deliver the needs of Councils through a yet-to-be finalised governance structure. Councils will hold a financial shareholding interest in these new entities. Councils will own one share per 50,000 residents.
- The assets (including pipes, pump stations and the wastewater treatment plant) would be transferred to the new entity who would be the new owner of these assets.
- The costs of water services that are currently paid by everyone in their rates will be removed and billed separately by the water entity - just as you receive a bill for electricity supply.
- It is intended that the entities have the scale, capacity and capability to improve delivery at an affordable cost. The proposals also mention a suite of mechanisms to protect Māori/iwi rights and interests and prevent privatisation, and an economic regulator would be appointed to protect consumer interests and provide strong incentives for performance.
Feedback given to Minister of Local Government - 1 October 2021
Porirua City Council sent a letter to Hon Nanaia Mahuta, Minister of Local Government, on 1 October 2021, to provide feedback and seek clarification on various aspects of the three waters reform programme. Download it here.
Workshop update - service delivery, council specific information and outstanding questions
Council officers gave the following presentation to elected members at a workshop on 9 September 2021. Download it here.
Workshop update - progress and next steps
Council officers gave the following presentation to elected members at a workshop on 26 August 2021. Download it here.
All of the information that has been released to councils to date is available on the Department of Internal Affairs and LGNZ websites.