Capital Crisis: Wellington's water crisis poses a threat to future growth
Tuesday, 12 March 2024
Wellington, we love you, but the city is at a crossroads. The Post examines in detail why the capital lags behind other world class cities, and where the solutions lie.
Martinborough has long been a favourite destination for Wellingtonians looking for a weekend retreat and to enjoy the local wine. What many visitors may not realise is that it has what can only be described as a shitty problem.
Last August, the South Wairarapa Council announced that the town’s wastewater plant was basically stuffed.
As a result, the council is no longer allowing new builds to connect with the wastewater plant. For a town that relies heavily on visitors from Wellington, that can only spell bad news.
Placing a cap on housing is not a good look. Builder Malcolm Blown says it has cost jobs among suppliers, and a number of builders have approached him for work.
For more than 50 years, its oxidation pond had not been regularly cleaned. Mayor Martin Connelley admits it is a situation that reflects badly on the council and it should never have happened.
The council’s website spells out the reason. “The plant has not had the levels of investment needed over its lifetime to maintain its treatment capacity and operational resiliency.”
On the other side of the Remutaka Hill, that is a message that ratepayers in cities like Hutt City and Wellington have got used to hearing.
For Blown, who has been a builder for 30 years, the council’s decision has had a chilling effect.
It led to a lack of confidence amongst buyers, who he says are not purchasing sections even if the section is not affected by the council’s no new connection rule.
Developers are not committing to new subdivisions and Blown believes it will cast a shadow over Martinborough that will last for many years.
The issue of funding water infrastructure is going to come to a head at a meeting of Wellington Water later this month.
The region is heading towards what seems like the perfect storm. Just how close Wellington, the Hutt Valley and Porirua councils are to being in a similar position to Martinbrough may become clearer.
Last November, Wellington Water chair Nick Leggett warned regional leaders that ignoring the need to invest heavily in Three Waters would leave the region without safe and reliable drinking water and place the region’s economy at risk.
Leggett said that Wellington Water needed a budget of $7.6 billion over the next 10 years but the councils only had $2.8b in their long-term plans.
Spending $7.6b sounds like a lot of money, but with Wellington Water saying the region needed to spend $30b over 30 years to get infrastructure up to scratch, it is only a drop in the bucket.
Leggett will not talk about the upcoming meeting and what message he planned to deliver, but it is not hard to guess what it might be.
It is only a matter of time until the region experiences a dry summer and runs out of drinking water. The region is leaking like a sieve and although councils are increasing funding for pipe renewals, we are still decades away from catching up.
As well as pipe renewals, the region needs to invest heavily in storage and water meters, to reduce and monitor how much water is being used.
Investing $7.6b will buy time but a bigger cloud hangs over the region — an increasing population and the need to invest heavily in the infrastructure to support housing.
It is hard for many people to get their head around how serious the current situation is.
The best way is to think about it as a household with a $500,000 mortgage. To pay off some of the capital would require $1000 a week, but the householder can only afford $500 and the amount owed is increasing weekly. The householder is also struggling with rapidly rising inflation and a big bill for insurance. A pay increase ups repayments to $650 but overall, the householder’s debt is getting worse and much needed maintenance on the house is an impossibility.
That is exactly the situation Wellington Water is facing.
While $7.6b would paper over the cracks, the cracks are getting bigger.
Hutt City Mayor Campbell Barry, who chairs the Water Committee overseeing Wellington Water says the household budget analogy is a good one and it points to a bigger issue.
Just like the householder, the four councils do not have the money to fix the existing infrastructure and, in the long run, fund the infrastructure needed for growth.
What councils require is a new source of income and more support from central government, he said.
In December The Post reported Hutt’s draft long term plan noted that the city needed 4100 new houses by 2033 for the 11,817 new residents expected call Hutt City home.
The plan stated the council had to “operate with fiscal prudence” and could not commit to all the infrastructure improvements required over the next decade.
There was an “unavoidable risk” that the council would not be able to provide the infrastructure required for new housing.
Wellington Water chief executive Tonia Haskell says councils in the region are unlikely to be forced to call a halt on new housing in the short to medium term.
In the long term, however, it is a very real possibility and the only way to avoid the Martinborough scenario is to act now.
She also notes that environmental regulations are getting increasingly tough and regulators are looking for evidence that the councils are taking water quality and supply seriously.
Wellington City Council chief infrastructure officer Siobhan Procter anticipates the capital’s population will grow by between 50,000 and 80,000 people over the next 30 years. That would see the city requiring an additional 24,000 to 31,000 residential dwellings.
Wellington has increased capital funding for water infrastructure in the long term plan to $1.1b, compared to $678 million in the previous plan, she says.
Despite the large increase, a crucial question remained unanswered. The Post asked: Does your council accept that unless it acts quickly to sort out the infrastructure deficit, that it is placing the Wellington economy at risk?
Procter did not answer the question but mayor Tory Whanau said that the plan included $1.8b to upgrade water infrastructure.
“We’re building a state of the art waste management system, spending over half a billion to make our city housing safer and warmer. On top of that we’re investing in transport and revitalising our inner city to boost the economy.”
Water, she said, was her “top priority” and what she was proposing represented a 68% increase from the previous long term plan.
“Our city is long overdue for some serious upgrades to cater both for a growing population but to build our resilience to the climate crisis and earthquakes.”
Affordability is a key word for Porirua mayor Anita Baker. She has been outspoken on the issue of Three Waters and the need for reform, as well as calling for financial support from central government.
Her council is going to need thousands of new homes and although there is no talk of a building cap, she questions where the money will come from to upgrade infrastructure.
She had previously described Porirua ratepayers as “tapped out” and last week said that she cannot see where the money will come from to fix their existing infrastructure, let alone fund the projected growth in population.
A push by new infrastructure minister Chris Bishop to force councils to build new housing would not work without funding from central government, she warns.
“It is all very well for Chris to say we need more housing but who is going to pay for [the necessary infrastructure]? I understand what he is saying but it comes down to affordability.”
In Martinborough, local businessman Conor Kershaw is looking forward to the council fixing its treatment plant. He works in the building trade and says it is not only builders that have been hit in the pocket.
There is a pool of builders who rely on doing new builds annually, who are now doing building maintenance. Plumbers, drainlayers and electricians who would normally work for them are looking for work.
“The unfortunate thing for us is that the decision [not to allow new connections] was made with almost zero concern for the wider economy.”
So how much are the councils putting into their long term plans?
The Post asked: How much funding did Wellington Water ask for over the next 10 years and how much is included in your draft long term plan?
Upper Hutt: Wellington Water wanted $829m and the council is consulting residents on $429m.
Wellington City: Wellington Water wanted $2.42b and Wellington is consulting residents on $1.873b.
Hutt City: Wellington Water wanted $2.6b and the council is consulting on spending $1.6b.
Porirua: Wellington Water wanted $1.6b for capital funding and Porirua is consulting on spending $750m. Wellington Water wanted $15.9m for operating funds for the financial year and is proposing $12.3m.