Auckland’s Watercare – Should It Stay Or Should It Go?
NOTICE: Thinking about the future of the Auckland Water Company, famous lines have come to mind both from former US President John F Kennedy and 70s Kiwi pop star Bunny Walters.
The government is proposing to remove Watercare from council property, making it one of four nationwide entities managing water, sewage and stormwater – from the Bombay Hills to Cape Reinga.
Auckland Mayor Phil Goff likes the idea nationwide, but not the deal that’s on the table, a $ 508 million payment to take out Watercare, its debts and the own stormwater operation advice, with his hands.
At first glance, that doesn’t sound like much for a company the board values ââat around $ 10 billion.
* Auckland mayor Phil Goff refuses to adhere to the government’s three water reforms
* Aucklanders to reduce their water consumption in a 30-year strategy
* Auckland Council Budget: Taxpayers face a one-time 5% tariff increase
This is where John F Kennedy comes in. A line in his inauguration speech in 1961, could be updated to read:
“Don’t ask what your country can do for your water company – ask what your water company can do for your country.”
The government’s three water reforms address the often precarious state of water and sanitation infrastructure across the country, which many local agencies cannot afford to completely modernize.
Watercare is almost the exception, with user fees that largely fund its needs, and ranked by the Water Industry Commission for Scotland as the top performer in the country.
While for parts of the country government reforms can be seen as a bailout, in Auckland Watercare’s jurisdiction and fiscal health will benefit the city’s smaller neighbors to the north.
Locally, Watercare’s ability to borrow for the investment it still cannot afford would be enhanced if its borrowing was not capped by the board’s overall debt level.
While Watercare still cannot invest at the level it would like in the future, overall tariff lift plans will keep its work program healthy.
The people of Auckland have also pledged to invest heavily to accelerate work on stormwater to improve water quality, thanks to the targeted tariffs.
But there are alternatives to the government’s proposal that would share Watercare’s strength.
Watercare’s expertise has already enabled it to conclude an agreement with its small neighbor to the south, the district of Waikato, to manage its water networks for a fee.
The same could be done for smaller local organizations in the north, without the need to change ownership and without risking uncertainty as to the extent to which local voices might influence the future priorities of a new entity. .
The governance of Watercare by the Auckland Council has not been perfect. He dropped work on a comprehensive water strategy and woke up almost too late to the city’s insecurity of supply during an extreme drought.
But Watercare’s swift response and its ability to raise $ 224 million to accelerate supply improvements shows Auckland’s model – backed by a fiscal weight – can act quickly when needed.
A $ 1.2 billion project will install an underground tunnel to increase the capacity of the sewer system.
The 2010 merger of Auckland’s eight local agencies into one, with a single water and sanitation company operating free from political interference, recognized that the larger city of Aotearoa was different.
The government has yet to present a convincing argument that nationwide and universal water reform is the best way to ensure efficient, effective and environmentally sound management of the three waters for the north of north.
If the government guaranteed Watercare’s debt, in the same way it would for the proposed new entity, the Auckland water company would be free to invest more and improve problems such as network leaks.
The decision to merge Auckland, so that it can better manage its own destiny for its own good and that of the nation, led to the reform initiated by the Labor government of Helen Clark.
The confidence that the government led by Ardern has in Auckland’s ability to do its best will be fascinating to watch over the next few months.
And the famous Bunny Walters line? The late artist 1972 local hit “Take the Money and Run” could fly high on Beehive’s music playlist for Auckland.