Cost of fixing Wellington’s water crisis - $1b a year

Monday, 6 November 2023

Wellington Water has the daunting task of fixing leaks, like this one in Maungaraki. Fixing all the problems associated with Three Waters would cost $1b a year.

A billion dollars a year is what it would take to fix Wellington’s water woes, but the boss of Wellington Water, Tonia Haskell, says that is a figure beyond councils to fund.

“Councils can’t afford it and a new water entity probably could not afford that either, unless the Government chips in,” Haskell said in an interview with The Post.

She describes $1b as an “unconditional budget” and notes that it could take many years to do the work required. “I do not know at what point that tails off.”

She would like to see councils increase their contribution by 30 to 40% over the next six years, which would allow Wellington Water to make significant progress.

Every day of the week (and often at night) Wellington Water has crews out fixing pipes: in September it fixed 700 leaks, but that still left 2879 unattended.

With 44% of the region’s water being lost to leaks (52% in Upper Hutt alone), the answer seems simple, repair the leaks.

But every dollar spent on fixing a leak is a dollar that could be spent on replacing old pipes.

Wellington Water boss Tonia Haskell says fixiing Wellington’s water infrastructure is a massive task.

Wellington City has 800km of its piping network nearing the end of its life. In September 2022 The Post reported that it would cost $3.1b to replace its ageing network.

The then mayoral hopeful Tory Whanau said it would be her “top priority” but said the fix would be “financially challenging” for Wellingtonians.

On Thursday, she supplied a statement noting there had been a change of government and the future of water reform was unclear.

“We all know that it will cost billions of dollars to fix Wellington’s ageing water infrastructure. This cost isn’t something that Wellington ratepayers can afford on their own. Alternative funding arrangements, and government assistance, will be needed.”

But Haskell avoided answering whether it would be better to concentrate on replacing pipes, rather than fixing leaks.

The best solution, she said, was the combination of fixing leaks, residential water meters to reduce personal use and identify where leaks were occurring as well as increasing storage capacity.

The annual figure of $1b includes the cost of such things as a new wastewater outfall pipe for Hutt Valley, installing meters, new reservoirs, upgrading wastewater storage and treatment plants across the region and completely renewing the piping network.

About 30% of the network is at the end its life and in poor condition. An independent review by the Water Industry Commission for Scotland suggested that councils needed to invest $350m to $400m a year to replace the creaking infrastructure and a “significant” increase was also needed in operational expenditure.

Between 2021 and 2024 Wellington Water’s budget for capital expenditure had been about $230m a year.

Fixing leaks is an expensive business for Wellington Water.

One person who knows how challenging the situation is is Bruce Hodgins, the Hutt City Council’s strategic adviser on Three Waters.

Lower Hutt has 233km of pipes needing replacement, costing roughly $400m. Last year it replaced 14.5km. About a third of its network is at the end or beyond the end, of its life span. The council hopes to increase how much it replaces by 3km a year, annually, until it reaches its target.

A Wellington Water team fixing a leak in Lower Hutt. In September the water company fixed 700 leaks, but that still left 2879.

In the best case scenario, it will take about 30 years and Hodgins acknowledged that in an ideal world, the council would move much faster.

Two factors – cost and capacity – were stopping it from doing that.

Porirua mayor Anita Baker says the council is unable to pay for much of the infrastructure needed to get the city’s pipes up to scratch.

Like other councils, Hutt City is borrowing heavily and with debt increasing to within $35m of its cap, the council has had to be prudent and fund the renewals over time.

Other councils in the region are also struggling.

Porirua mayor Anita Baker endorsed comments by Lower Hutt mayor Campbell Barry that local government was broken and needed a new funding model.

Porirua was looking at deferring funding for Wellington Water projects and she said the city could not pay any more.

“Our ratepayers just can’t afford it. We need central government support, we are completely broken.”

Last week Baker took to social media, urging locals to support water reform.

“My message to Porirua residents is that if we want to avoid water restrictions and boil notices – likely this summer and every coming summer – we need to take action. We need to invest more in renewing our pipes and in meters.”