Surprise after $400m lumped on councils in Tiaki Wai’s 11th hour
Thursday, 11 June 2026
Mayors and councillors are claiming the Wellington region’s new water entity was sold on an ill-considered plan that has cash-strapped councils having to keep $400m of potential loans aside.
Tiaki Wai will take over the running of all of Wellington, Hutt Valley and Porirua’s water networks from Wellington Water on July 1. Unlike Wellington Water, Tiaki Wai will own the assets, allowing it to borrow more to get on top of decades of underinvestment.
Tim Brown, who is setting up a Wellington water users’ group, was a Wellington City councillor last term and spent time on the Wellington Water Committee. He confirmed Tiaki Wai was meant to have financial separation from councils, although he was always skeptical about this happening.
Now two changes have city leaders crying foul – first they were told they had to secure Tiaki Wai’s loans from the Local Government Funding Agency.
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More recently, councils were told the only way to limit the first few years on Tiaki Wai bills to homeowners was for councils to keep $400m borrowing capacity aside for 10 years as a rainy day fund for an unforeseen major failure. A major breakage of the Seaview outfall pipe was seen as the most likely trigger for the fund.
“This was certainly not the promise we were sold at the beginning,” said Ros Connelly, a Greater Wellington Regional councillor and Wellington Water Committee chairperson.
The Government had sold Tiaki Wai as being financially separate from councils, she said, but the “goal posts have shifted”. Financial separation appeared to be an ambition “possibly not grounded enough in reality”.
Upper Hutt mayor Peri Zee said the deal had shifted and the reforms “should have been better thought out”. Porirua mayor Anita Baker said news Tiaki Wai needed the $400m borrowing capacity came “out of the blue“ from the board of directors.
Offloading water debt and assets to Tiaki Wai was meant to help councils drive down debt and came as the Government was about to impose a rates cap on councils, limiting their ability to repay borrowed money, Baker said.
“I just don’t think they thought through the impact on councils.”
But Hutt City mayor Ken Laban said his council had been “well informed” on the shareholder support arrangements for Tiaki Wai and “fully behind” this decision”.
Local Government Minister Simon Watts said financial separation – or balance sheet separation – was not mandatory and the Government had agreed a deal with the Local Government Funding Agency that did not require balance sheet separation.
Wellington mayor Andrew Little said talks about the extra financial assurance had been going on since December. It was also discussed with the Commerce Commission.
“Councils have agreed that a callable capital facility is an acceptable interim measure while Tiaki Wai is in its establishment phase over the next few years,” he said.
“I’m satisfied that the conditions attached to any call on additional capital makes it a low risk for Wellington City Council.”
Tiaki Wai chairperson Will Peet said the board had been discussing the starting position with councils since it was appointed late last year. The $400m uncalled capital was so it would be able to charge homeowners lower bills in the initial decade as it did not need to set up a rainy day fund so fast.
Councils had agreed to it, he said.
“Councils’ interpretation of the outcomes of the reforms are for them to comment on,” Peet said. Tiaki Wai stressed the $400m would be a ”last resort“ when all other funding options were exhausted.