The 10 new Water Services Entities will ensure all New Zealanders have access to safe, reliable and affordable water services.
Benefits for households
After decades of under-investment, the amount of investment in water infrastructure required over the next 30 years is unaffordable under the status quo.
One of the key drivers for reforms is affordability. The 10 Water Services Entities will be much bigger than any individual council and will be able to raise much greater levels of debt to fund the investment needed over the next 30 years. The reforms will also ensure repayment of debt for water infrastructure spread over a long-time horizon, rather than front-loaded onto today’s ratepayers as would be the case under the status quo.
Without reform, average costs per household in 2054 are estimated to range from $3,900 to more than $10,000 per year in some districts over the next 30 years. After reform, costs per average household are projected to range between $1,460 and $4,430.
Households already pay for water as part of their rates, however, in the future will pay their new Water Services Entity for these services.
Affordability of water services
The Water Industry Commission for Scotland (WICS) has recently updated its analysis of the benefits of amalgamating local authority water services delivery to reflect the Government’s ten entity proposal.
This analysis updates key assumptions that were made as part of WICS’ original economic analysis of water services aggregation in 2021. This includes updating key assumptions such as interest rates and inflation, updating council information to reflect the most current published financial information, and updating the 30-year period of analysis to start in 2024 and finish in 2054.
The modelling retains WICS’ original estimates that investment totalling $185 billion will be required over 30 years to maintain and replace existing assets, provide for growth in new connections resulting from population growth, and improving levels of service to meet drinking water quality and environmental regulatory requirements.
The entity scenarios assume there will be an effective regulatory governance framework in place, with appropriate regulatory scrutiny of the water services entities by Taumata Arowai and Commerce Commission. WICS considers this essential to allow the investment to be delivered to plan and for the potential efficiencies to be realised.
The table below compares the average household costs in 2054 (expressed in 2022 dollars) for each council under the status quo with the estimated average household costs under the 10-entity model. Savings are expressed in today’s dollars and as a percentage of estimated costs under the status quo.
Water Services Entities
Water services will be managed by 10 Water Services Entities.
This map shows you which entity area your council falls into.