$30 billion and rising to fix Wellington’s water woes

Tuesday, 28 November 2023

Wellington Water has issued a dire warning it needs $30 billion to fix the region’s pipes, but councils say that rates are already going through the roof.

The warning came in a letter to Hutt City Mayor Campbell Barry, who chairs the regional water committee, from Wellington Water chair Nick Leggett.

Leggett said the cost of bringing the region’s infrastructure up to scratch could be as much as $30b over the next 30 years.

“Continued deferral would ultimately endanger public health, increase wastage or precious water, continue considerable environmental and catchment impacts, inhibit or even stop housing growth and ultimately reduce levels of service for communities.”

It urged all councils in the region to take the issue seriously and to include adequate funding in their 10-year plans.

Leggett said the board was keen to send a “high level signal” to councils in the region they need to increase funding as they work on their long term plans.

Porirua mayor Anita Baker welcomed the letter. Nation-wide councils, are struggling to raise the money needed to provide core services.

The time had come for the Government to look for new ways to fund local government, she said.

She had met with Infrastructure Minister Chris Bishop and said he was aware how serious the situation was for councils.

Baker said Porirua did not have the resources necessary to fund Three Waters and she had told Bishop that rates were becoming increasingly unaffordable.

On Monday, the letter was tabled at a meeting of the Hutt City Council. Chief financial officer Jenny Livschitz warned councillors they faced tough decisions around rates affordability and dealing with an ageing water network that needed a significant investment in capital.

The council was looking at a rates increase of 16.5% for residential ratepayers.

Funding everything that Wellington Water had asked for over the next 10 years would cost Hutt City close to $1.5b. That would result in rates increases as high as 27%, over the next decade, which was potentially unaffordable, she said.

The letter is further bad news for Wellington City ratepayers, who face massive bills to fix earthquake prone buildings. The past three years have seen average rates increases of 12.8%, 8.8% and 12.3%.

The Post recently reported some council sources had said rates could increase by as much as 20%.

The increase will mean a household that paid $3081 in 2021/22 now pays about $4229 in rates, but this would go up to $5074 next year with a 20% increase.

Although Wellington Water had urged Wellington City to include water meters in its long term plan, a council officer recently wrote to Wellington Water declining to do so.

Wellington mayor Tory Whanau said the letter highlighted the hole councils were in, and support was needed from the National-led government to ease the financial burden of rebuilding water infrastructure.

“Like councils all over the country, Wellington has had decades of underinvestment in our water infrastructure which will cost billions of dollars to remedy,” she said in a written statement.

“Now that it is clear Three Waters will not proceed, that National government cannot expect funding to be entirely shouldered by ratepayers.”

Siobhan Procter, Wellington City Council’s chief infrastructure officer, told Wellington Water that the council needed to see a robust business case before it could consider water meters.

Baker said like other councils in the region, Porirua was under increasing financial stress, and it can not borrow enough money to fund Three Waters improvement. The best option would be a new entity that can borrow money without it appearing on council books, she said.

Water industry body Water NZ said up to $185b in investment was needed over 30 years to upgrade water infrastructure. Water New Zealand chief executive Gillian Blythe said on Monday that the current 67 water provider model was not sustainable.

“Across the country we’re seeing the stresses on the water sector on an almost weekly basis, whether it’s unsafe drinking water, pipe leakages, sewage spilling into the environment, rivers and beaches that are unsafe to swim in and more flooding and storms,” Blythe said.

– Additional reporting Gianina Schwanecke