Multi-billion-dollar water bill for Wellington region revealed

The Wellington region is facing a bill of up to $13.2 billion over the next 30 years to fix its water infrastructure, new figures reveal.

The Department of Internal Affairs (DIA) has already proactively released expert evidence behind the Government’s three waters reform proposal showing up to $185 billion is needed for pipes across the country.

Now DIA has also published the individual models for every council in New Zealand.

Water is currently managed by 67 territorial authorities, Watercare, and Wellington Water.

Wellington Water manages water assets for the Hutt, Porirua, Upper Hutt and Wellington City councils, South Wairarapa District Council and Greater Wellington Regional Council.

Modelling by the Water Industry Commission for Scotland (WICS) shows these councils could collectively need to spend up to $13.2 billion over the next 30 years to get their water infrastructure up to scratch.

Wellington City, which has recently experienced high-profile failures across its network is facing the biggest cost, being $6.3 billion.

Lower Hutt is the next most expensive, with an estimated cost of up to $3 billion.

Wellington Water Committee chairman Campbell Barry said the new figures were in line with early indication work on needed investment, which the company has undertaken over the past 18 months.

Barry warned the numbers could balloon even further as issues continue to be identified during more extensive assessments of water networks.

“Costs very rarely come down when it comes to infrastructure.”

The Government is proposing to move the ownership and management of water infrastructure from local councils and into the hands of four water services agencies, split regionally.

One would cover Northland and Auckland, the second includes the centre of the North Island and Bay of Plenty, and the third encompasses the east coast down to Wellington as well as the top of the South Island.

The final entity covers the rest of the South Island.

When Local Government Minister Nanaia Mahuta announced the proposal she said the current system was not fit for purpose and the case for change was compelling.

“Underinvestment, including deferred maintenance and renewals expenditure, has left a legacy of impending costs and poor services for future generations.”

The lowest amount of potential investment among the Wellington Water shareholder councils is $732 million for South Wairarapa, which is a rural area.

But modelling estimates the average household cost per year within this council boundary could be as much as $8690 by 2051 without reform, compared to $1260 with reform.

“Rural and provincial areas simply don’t have the population base to be able to renew their network without having a significant burden on their ratepayers”, Barry said.

“While costs in urban areas are significant, we have more of a population base to spread the cost.”

Barry said rural and provincial councils were the biggest benefactors of the Government’s proposed water reforms, looking at the situation purely through a financial lens.

The Wellington Water Committee is yet to take a collective position on the reforms, although there is general agreement the committee needs to have a seat at the table to influence decision making.

But in his capacity as Mayor of Lower Hutt, Barry said he thought the Government was on the right track.

“When I look at the numbers and the projections which have been put in front of us and the scale of the challenges we face as a city, it is absolutely crystal clear that the status quo is not an option.”

Barry said his priorities included local accountability, local responsiveness, and ensuring investment by the proposed entities aligned with council district plans and regional growth frameworks.

Estimated investment costs over the next 30 years

• Wellington City $6.3 billion

• Lower Hutt $3 billion

• Upper Hutt $1.2 billion

• Porirua $1.9 billion

South Wairarapa $732 million

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