New water utility Metro Water stares at $2.6 billion hole

Wednesday, 13 August 2025

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Wellington’s metro councils would need to pool together an extra $2.6 billion across the next decade to fund the region’s new water company while average households could pay up to $5700 for water each year by 2034.

The final draft of the blueprint for the new entity, which has the interim name Metro Water, warned funding the investment would require “significant” long-term borrowing, higher development contribution charges and growing costs for water users over time, adding it would need a “strong ongoing focus” on affordability.

Released ahead of a special Hutt City Council meeting next Tuesday for ratification, the papers estimated Metro Water would require $25b in capital investment over three decades but those numbers were one-third less than continuing with the status quo.

However, the $6.8b needed for the first 10 years “significantly exceeds” the combined $4.1b that the four controlling councils in Wellington City, Porirua and the Hutt Valley budgeted for Metro Water for 10 years in their respective long-term plans.

“The metropolitan area is facing a significant and escalating bow wave of investment need and due to affordability challenges faced by the councils, many high-cost and high-risk investment requirements were excluded from the councils’ LTPs,” the paper said. It estimated by 2034, the average household annual water bills would cost between $4800-5700, up from $2100 today.

The numbers did not come as a surprise for Lower Hutt mayor Campbell Barry, who believed they were even on the conservative side: “The estimations from Wellington Water have shown it may take as much as $1b a year for the next 30 years to get the network up to scratch,” he said.

In Lower Hutt’s case, Barry said the council did not have enough borrowing headroom in its long-term plan to pay for its share of Metro Water or it would need to have “significantly higher” rates increases.

“We should not be under any illusion that things are going to be less expensive, but they are less expensive than what it would have been.”

Out of the $2.6b investment hole, $1.1b alone would be spent on “meeting levels of service” to upgrade the region’s pipes, wastewater treatment plants, reservoirs and the roll-out of water meters. Another $327 million was to catch up on overdue upgrades like a new Seaview wastewater outfall pipe.

A further $727m was reserved for building growth-enabling water infrastructure, including new Pākuratahi water storage lakes and upgrading a critical wastewater main through Paremata in Porirua.

The documents recommended Metro Water have a focus on affordability and work with the Commerce Commission “as soon as practical” to build up affordability support mechanisms.

Porirua mayor Anita Baker was shocked at the numbers, but said they were an accurate readout of the state of the region’s water assets. “I knew they were going to be large,” she said. “You can’t be not shocked by the numbers.”

“That’s what we have to work out with the Commerce Commission because you can’t have massive water bills.”

Dame Kerry Prendergast, a former Wellington mayor heading the Metro Water’s advisory oversight group, said a lot of work had gone into addressing the region’s infrastructure deficit and a council-controlled organisation like Metro Water meant they would have the ability to borrow money for the works that needed to be done.

The forecast soaring household bills were not a problem constrained to the capital, she added. “Wellington has some issues that are unique. But if you look around the country, there has been under-investment in infrastructure for a long time. The reality is that pipes only last a certain amount of time.”

Wellington City councillor Ben McNulty said he was angry at the “negligence” over previous decades. “Those price forecasts are hugely concerning about people’s fundamental ability to just afford to be able to live in the Wellington region,” he said.

Wellington mayor Tory Whanau was approached for comment.

–Additional reporting by Stewart Sowman-Lund

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