Auckland's Watercare to take over Waikato District services
Tuesday, 21 May 2019
Auckland Council has given its subsidiary Watercare the green light to take over running networks in neighbouring Waikato District.
Watercare will run the district council's water, sewerage and stormwater systems on a trial for two years. A further 30-year contract was possible.
'It's a win-win. Waikato residents win and we should win, but we will test it in the test drive over the next two years,' Watercare's chief executive Raveen Jaduram told Auckland councillors on Tuesday.
Councillors unanimously backed the expansion plan after being told it was worth $20 million annually.
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Waikato District Council expected to save $28 million over a decade from having the country's biggest water company manage its operation.
The rural district south of Auckland's Franklin ward boundary extended south around Hamilton, but excluded the city itself.
Jaduram said the new deal would provide extra revenue for the Auckland Council-owned company and the Waikato would benefit.
'We have a higher level of security of supply in Auckland. There have been droughts where we haven't had restrictions, and yet there have been in Waikato,' Jaduram said.
'They (Waikato) pay more for their services because they don't have scale.
'They are unable to upgrade their wastewater treatment plants, so the effluent into the river probably isn't of the standard they would like it to be.'
The two-year contract would let Watercare assess the Waikato operation and its assets.
If that ran smoothly, a 30-year deal would have Watercare effectively take over operations and maintain the network, billing customers directly.
Jaduram said the government was closely watching the arrangement.
'If a decision is made by the government in those two years to going to a different structure than Watercare has with Waikato, we can terminate and move out,' he said.
Watercare is already active in the Waikato, taking water from the Waikato River through a pipeline feeding greater Auckland.
It had a water and wastewater treatment plant in Tuakau, and provided services in Tuakau and Pōkeno before Franklin was separated in the Auckland super-city amalgamation.
Although council-owned, Watercare had its own board of directors, and its semi-independence was enshrined in legislation which reformed Auckland local government in 2010.
Auckland Councillors were mostly concerned, as they prepared to vote, on whether the deal could upset the council's finely-balanced budget, where little headroom existed for debt to rise further.
Jaduram assured councillors that while the deal might involve debt in the second phase, that would be outweighed by the revenue that flowing into the Auckland Council coffers.