Scotland found a way to provide an efficient water supply and cheaper bills, all delivered by one national company, reports our Special Correspondent.

New Zealand has long hung its international reputation on its unique tourism, natural food products, agriculture prowess and clean image. But the quality of its water is also part of the story, says a Scottish expert.

"You have to understand you need to get the water quality as best as it possibly can," says Alan Sutherland, chief executive of the Water Industry Commission for Scotland.

He is suggesting New Zealand should bite the bullet and spend money to improve water resources.


"I've seen estimates to improve the water quality. I suspect they are a bit low but maybe you are cleverer than us."

Sutherland joins the international line-up at the Infrastructure New Zealand Building Nations conference in Rotorua this week, speaking about the success of Scottish water delivery.

Environmental planning consultancy Boffa Miskell produced a report late last year saying $1.4-$2.1 billion was required to upgrade the wastewater treatment plants in New Zealand to meet the National Policy Statement water quality criteria for Freshwater Management.

The most important thing, says Sutherland, is giving citizens the confidence the right steps are being taken. "If you pay more for water, you need to be assured that you are getting better quality and it is having an impact on the environment.

"There will be scepticism over whether councils are spending the money effectively, and my instinct tells me that if you are honest about the price implications, you will find organisations starting to collaborate and work together.

"Watercare in Auckland is taking on more areas and Wellington is involving more councils, for instance," Sutherland says. "Even creating a water regulator is sensible following the Havelock North contamination."

He suggests New Zealand could establish its own water company that provided all the services for the country. "I don't see why you can't do it — the advantage would be to have similar charge rates for water wherever you live. It works a bit like using mobile phones in New Zealand — it doesn't cost you any more if you are in Auckland or the South Island."

New Zealand's population is not far from Scotland's 5.1 million and Scotland has established its own national company, Scottish Water, thanks to the advice from Sutherland.


Scotland's water services were provided by nine mainland and three island regional councils before they were combined into three authorities in 1996. Scottish Water was created in 2002 to service 2.3 million households and 150,000 businesses and organisations.

The Scottish Government estimated £600 million to improve its water quality but so far it has spent £2.5 billion. "We still haven't got it completely right — there are still issues about the level of organic materials in water and needing intervention at the treatment plants."

Sutherland is being modest.

Scotland's soft, tasty drinking water is some of the best in the world and Scottish Water has created economic efficiency and a fair charging regime. Sutherland's approach is that a well-managed company will go much further for their customers than they will for the regulator.

Last year Scottish Water conducted 350,000 microbiological samples of water quality and only 320 failed the tests. Scottish Water is spending £700 million in capital investment this year and its revenue is £1.1 billion — it is borrowing £200 million.

One of the big issues was how to charge for the remote areas of north Scotland, similar to the lower half of the South Island.

Sutherland said putting a membrane plant to treat water in a community of 10 houses and a small school cost £1 million and "how expensive is that? We devised a progressive charging regime based on the value of the house you lived in. People in Edinburgh paid more for the cost of water than a community of 10 in the north. Businesses are metered for water."

He says the average household water bill is £360 this year and people in the north are paying half of what they could have expected to pay. "What we have done is to make sure we have a system in place that allows customers and citizens the confidence they are getting value for money and quality. It's quite brave for politicians to create an independent water regulator and an economic regulator (Scottish Water)."

He is in the middle of price-setting for 2021-2027 and expects water services to go up 5 per cent, taking into account the cost of combating climate change. "Prices could be falling in real terms but we are facing up to a climate emergency which is going to cost," he says. "Over the last 15 years prices for water have gone up less than the rate of inflation."

Scottish Water has become one of the largest landowners in Scotland but has planted trees, developed wind farms and created hydro power with gravity feed systems. It now produces twice as much electricity as it uses, and that's a lesson.