Super City water giant celebrates pipe dream

Five years on from becoming the Auckland regional water retailer, Watercare Services says it has lowered household water bills - despite spending $1.2 billion on beefing up supply networks to match a growing population.

When the Auckland Council was formed in November 2010, Watercare went from being a wholesaler to seven councils to a retailer for 450,000 customers.

Chief executive Raveen Jaduram said the change was an immense challenge which was handled without disruption to services.

In 2011, Watercare standardised and lowered the price of water to $1.30 per 1000 litres for all domestic and business customers. The current price is $1.41.

A year later, it changed to a monthly billing system in response to customer feedback.

In 2014, it phased in a wastewater tariff for non domestic customers that treated businesses equally regardless of their location and reduced 44 tariffs to four based on volume discharged.

Before its price rise in July, the company boasted that in the previous four years, its water and wastewater charges had increased by 2.1 per cent a year and its rates were significantly below comparison cities in Australia and the United Kingdom.

Last year, its water and wastewater charges brought in $426.6 million - compared with $346.3 million in 2011.

Although owned by the council, Watercare is not supported by council rates.
Its expansion is paid by a mix of service charges, infrastructure growth charges on developers and borrowing.

From the takeover, it had to upgrade Franklin's water supply - a $116 million project during which Pukekohe was connected to the Waikato River treatment plant.

By last year, the supply to all customers in the region met Health Ministry standards.

Watercare's ability to cope with a growing population's demand for water over the next decade will depend on finding new water sources and encouraging water-saving measures.

Watercare is obliged to follow the council's grand plan for the city's growth and serve developments.

This has led to undertaking $1.2 billion of capital works.

It is being followed by a plan to spend $4.7 billion over 10 years to boost treatment plants and the bulk pipe networks for drinking water and sewage.

The council's Auckland Plan blueprint for growth expects Auckland's 1.5 million population to grow by 700,000 in the next 30 years and 400,000 additional homes built.

"We will have to expand the network to cope with a population growth that is equivalent in size to two Wellington Cities, a Hamilton and a Palmerston North," said Watercare infrastructure planning manager David Blow.

With $8 billion of infrastructure in the ground, Watercare plans to spend $5 billion over the next 10 years.

The council zones the land and Watercare has to match the areas where its networks have capacity with where development will occur.

The council and the Government are creating Special Housing Areas for fast-track development of 40,000 homes in three years, some in existing urban areas and others which are now fields.

Mr Blow said development would not be held up waiting for water connections.
"They have been authorised in areas where trunk water or waste water capacity does or will exist to meet demand.

"We have capacity for 45,000 new homes."

In addition to the special area, the council has identified 11,000 ha of rural land in the North, North-west and South, which it will release in blocks every five years over 30 years for developers to prepare for housing.

Mr Blow said Watercare needs at least five years notice to expand treatment plants and build trunk network capacity.

Its plan was to concentrate on building the regional trunk pipe capacity as the foundation for extending local networks when it was known where and when they were needed.

Watercare Services - Pipe Dream:
• $1.2 billion on infrastructure projects in last five years.
• $4.7 billion in the next 10 years.
• $960 million Central Interceptor sewer from Western Springs to Mangere.

Projects by comparison:
• $1.4 billion Waterview Connection - half tunnelled link between Southwestern and Northwestern Motorways.
• $2.5 billion proposed City Rail Link.