Mayors propose simpler Three Waters alternative

A Three Waters reform proposal by the mayors of Auckland, Christchurch and Waimakiriri, offers a legitimate and more logical alternative to the multilayered complexity we have seen so far, Civil Contractors New Zealand Chief Executive Alan Pollard says

The simplicity of the proposal is a refreshing change – it is simple, practical, clear, accessible, and still addresses issues around good management of water assets.

As an organisation, CCNZ has deliberately not taken a position around the politics surrounding the creation of water entities or cogovernance. But we have supported the need for change, the need for good water asset management, and the importance of a continuity of work through any transition.

It was disappointing to see the immediate response from the Prime Minister, who largely dismissed the proposal, despite it offering an opportunity to exit what is increasingly becoming an intractable political situation. And from the Finance and Infrastructure Minister who noted that on his first review it doesn’t go far enough to consolidate asset owners.

In the past, the Government has said this reform is not about cogovernance but about the quality of our water and the effectiveness with which it is supplied and managed. It

will be interesting to see if they hold the line now that practical alternatives that don’t rely on co-governance are starting to come to the table.

There will be an opportunity to submit on a suite of upcoming three waters legislation around how water is managed in the near future, and we will be formulating our position on these to ensure the industry’s voice is heard when this is open for submissions.

We are already working to inform a prospective Three Waters Code of Practice (contact CCNZ Technical Manager Stacy Goldsworthy for details), and our team is engaging with the National Transition Unit established within DIA to ensure coming change is well understood and takes into account the needs of contractors.

The Proposal –

Waimakariri Mayor Dan Gordon, Auckland Mayor Wayne Brown and Christchurch Mayor Phil Mauger

We believe we can unite as a country and find a consensus plan that we all support to deliver New Zealanders safe and reliable drinking water and wastewater services.

Water services rely on long term investment, and we believe it is in all our interests to have an agreed policy – that is beyond political debate and not subject to significant change, from General Election to General Election.

This will meet the ambitions of all New Zealanders for their water to be delivered to the best health and environmental standards. We want to ensure that services are delivered efficiently and effectively in a sustainable, affordable, and accountable way.

As civic leaders in New Zealand, we believe all parties should support these common principles to improve water treatment in New Zealand. The ambition is to provide high quality, well governed and maintained water infrastructure for New Zealanders.

Our principles:

1. We support and endorse the new water regulator, Taumata Arowai. 2. We support the local ownership and control of water treatment and reticulation to ensure local accountability. 3. Ownership and management of stormwater assets should be retained by local councils to ensure clear management alongside transport and drainage assets. 4. We encourage local government entities to consolidate, where sensible, into Regional Water Organisations (RWOs) which would be unable to be sold outside local authority ownership. 5. Affordable finance should be provided to qualifying Three Waters asset owners to ensure high quality investment in these assets to provide a higher standard of water treatment.

Because of New Zealand’s unique topography and population distribution, we believe there are limited network benefits from integrating the diverse water systems that provide water and wastewater services across New Zealand. However, where it does make sense and Auckland Mayor Wayne Brown

Waimakariri Mayor Dan Gordon

Christchurch Mayor Phil Mauger

efficiencies can be gained, this should be facilitated.

By forming or being recognised as a Regional Water Organisation – these entities would have access to the investment capacity of the Water Infrastructure Fund.

Ensuring Better Investment:

Our plan to improve water treatment for all New Zealanders. –Access to affordable and well-structured finance will facilitate better investment in future water and wastewater assets.

– a new Water infrastructure Fund (WIF) to be established by Crown Infrastructure Partners.

– Will provide high quality access to equity and investment in new water treatment assets for large councils or RWOs. The WIF will be the primary provider of long term investment / funding in water and wastewater assets for councils and RWOs. It will have access to debt

– The WIF will operate on commercial lines but only able to be subscribed for equity by the NZ Government, ACC, NZ Superfund or Iwi, who will be attracted by the intergenerational nature of the investments.

– The WIF could enter financing structures with Councils and RWOs for schemes in excess of an agreed threshold.

– Would act like the LGFA and manage debt and financial arrangements. Could hold debt off the council balance sheets.

– Would ensure compliance with green investment principles. They can access international bond markets but will ensure NZ ownership of assets.

Mana Whenua:

Three Waters asset owners would be required to engage with mana whenua on what role in investment decisionmaking best reflects and promotes the roles and responsibilities of mana whenua mana moana, including kaitiakitanga. It encourages local arrangements between Three Waters asset owners and mana whenua to be co-designed locally so that they are more direct and meaningful.

Support Vulnerable Water Schemes:

The most vulnerable schemes are those run by smaller entities, often in remote locations. It is difficult for these schemes to benefit from the economies of scale. These schemes would not be a focus for large multiregional entities.

We recommend that future additional capital investment is targeted at the most at-risk systems. We realize that these are largely smaller systems in dispersed geographic locations. Significant investment is not easily organised given the small numbers of users.

For these smaller schemes under the agreed threshold, they would be able to access a “Vulnerable Water Schemes” programme, which is modelled on Labour’s earlier “Drinking Water Assistance Programme” later supported by National in government. This acts like the Waka Kotahi Financial Assistance Rate for roading.

Highest risk schemes in smaller areas would be able to apply for a subsidy to support their replacement or enhanced schemes. Management of this scheme would involve the Water Infrastructure Fund, MfE and Te Whatu Ora. The water regulator could provide input into this process.

Capital projects will be ranked and funded with the most vulnerable funded first. Over time it would work to ensure the most vulnerable communities are given the same access to quality water.

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