First step to user pays water

Proposal sparks fears of water privatisation

Last updated 05:00 29/04/2014

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Waikato is about to take its first step towards a user-pays water system but a district mayor says councils are not looking to turn a profit.

The Waikato Mayoral Forum is looking into setting up a joint council-controlled organisation (CCO) to manage water, wastewater and stormwater in three of the region's districts.

The mayors of Hamilton, Waipa and Waikato agreed to take the proposal to their councillors and see whether there was interest in investigating a business case for the idea.

It would see a public-owned company set up to manage water infrastructure in the region with "CCO services . . . provided on a 'user-pays' basis", according to the report in which the recommendation was made.

While metering is considered "outside the scope" of the report, it is raised as an idea under funding.

Waikato District Council mayor Allan Sanson, also the chairman of the forum, said the recommendation was "nothing to do with privatisation of water".

"Council is not in the business of making a profit out of selling water. Basically it's about covering our costs in providing the water and reticulating it to our customers, who are our ratepayers.

"We aren't allowed to make money out of it and we don't want to make money out of it. We just want to be more efficient at reticulating it and treating it."

He said legislation prohibited councils from privatising water "so that dispels that whole argument as far as I'm concerned".

He said the debate was still a long way off, with councillors from all three councils needing to agree to an investigation likely to cost up to $400,000.

Hamilton City councillor Dave Macpherson, who has been a vocal opponent of water metering, said moving supply of a resource to a company structure was the first step towards privatisation. He said many other CCOs had eventually been sold into private hands. He said CCOs were further out of the control of elected officials.

"It further removes elected members from involvement. The company would be acting like a private company, in fact it's required too."

Macpherson said there were other options when it came to dealing with increasing water efficiency, including education and conservation.

Hamilton mayor Julie Hardaker was unable to attend the mayoral forum yesterday, and had not yet read through the report when contacted.

However, she said water management was an issue the government was currently pushing local councils on. A parliamentary bill, if passed, would require councils to work more closely together on infrastructure delivery and review the way services were delivered every three years.

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When it came to the possibility of metering, she said the Hamilton City Council "will need to have that discussion with our community".

Hamilton Residents and Ratepayers Association president Rod Bowman said he was open-minded about different means of water management.

"We don't believe in the super-city style sort of thing, because that's been an absolute failure in Auckland.

"If it can be done within the costs that we're paying that's fine. But if it's looking at privatisation, which has been mentioned at council level . . . you're going to be ripped off."

However, Bowman said he would be worried if privatisation was considered.

"The fact is once you privatise it, it's out of the hands of local government and it's into the hands of big corporations.

"Once you get corporations doing this sort of things prices just escalate and you've got no control whatsoever."

He said the association would be watching the process carefully to see exactly what was being proposed, and what costs were involved.

"It sounds good in theory, but what it turns out in practice will probably be a total different thing and I would have to wait to see what eventuates really."

Combined, the three councils are expected to spend more than half a billion dollars on water infrastructure over the next decade.

Waipa and Waikato currently work together on water conservation, chemical sampling and trade waste services.

A separate report by PricewaterhouseCoopers estimated savings of $1.4 million per annum if the three councils worked together in other areas as well.

Together Hamilton, Waipa and Waikato made up 92 per cent of the Waikato region's growth in the last census, with 63 per cent of the region's population located in the three areas.

The three councils involved were considering holding public workshops in May for councillors.

Any decision to commission a detailed business case would need to go to full public council meetings, and if it went ahead would likely happen in July.

The full report is available at

- Waikato Times


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