Rudman's City: Watercare flak sometimes not deserved

by BRIAN RUDMAN

When petrol prices soar, the oil companies invariably duck for cover and point the finger at the rapacious Arabs.

When Auckland water prices go up, the local body middlemen who on-sell the water to you and me are just as quick to redirect the blame onto the monopoly provider, Watercare Services.

We didn't want to do it, they cry, but Watercare upped its prices and we had to follow suit.

For the local authorities, Watercare is the perfect scapegoat. It can't answer back. After all, it is jointly owned by the very local bodies attacking it.

The current local government budget round is shaping up to be no different. In Manukau City, for example, they've agreed to a 4.5 per cent increase in the price of water which "accommodates a proposed increase in bulk-water charges ..."

On the North Shore, the rise will be 5 per cent to cover "an increase in Watercare Services bulk-water charges and extra funding needed for depreciation." Waitakere City is also going for a 5 per cent rise to cover Watercare's upped charges.

As for Auckland City and its controversial offshoot, Metrowater, no decisions have been made yet but the word is that ratepayers are likely to be facing a similar 4.5 to 5 per cent water-rate hike.

What isn't being shouted from the council chamber rooftops is that Metrowater's rise for bulk water for the coming year is only 2 per cent.

Not exactly common knowledge either is that we are talking 2 per cent of a base figure of 46c a cubic metre here, or just 1c.

By the time this 1c increase in bulk-water charges has trickled through to our taps, ticket-clipping by our local body retailers has turned it into an additional charge a cubic metre of 6c to 7c.

Water may be the most transparent of all council services, but the charging regime associated with it certainly is not. A quick session with my calculator revealed just how unclear the economics of water retailing can be.

In 1992, when Watercare was set up, its bulk charge a cubic metre was 43.8c. From July 1, when the 2 per cent rise goes into effect, the bulk cost will be 47c, a 7.3 per cent increase since 1992.

The retail price of water has been a rather sadder tale. As of July 1, a cubic metre of water for North Shore consumers will have increased in price 33 per cent since 1992 - up from 93c to $1.24.

In Waitakere, the increase is 36 per cent -up from $1.09 to $1.48.

In Manukau City, there has been a 57 per cent increase - up from 74c to $1.16 - while Auckland City ratepayers have experienced a whopping 60 per cent rise - up from 82c in 1992 to an expected $1.31 from July 1.

Watercare says its annual 2 per cent rise in charges since 1999 are previously signalled levies to help pay for the $155 million Waikato River pipeline project.

The rocketing charges the local authorities levied are more difficult to understand.

Throughout the isthmus, the old catchcry of having to replace a decaying, century-old infrastructure is tossed around.

I have no problem with that except that the record is getting a bit worn.

For example, in December 1993, Auckland City launched its strategic plan, "Towards 2020." The result was that everyone's rates rose 5 per cent. This, we were told, would cost each household just an extra $2 for 20 years.

The upshot would be $700 million worth of infrastructural improvements. Of this, $156 million would go to improving the water-supply infrastructure. Fibrolite pipes were to be replaced, iron pipes relined and pressure raised.

Since 1994, every Auckland City ratepayer has been paying this special rates surcharge.

We were told at the time that it was to be the grand solution to our infrastructural problems. Whether it was or not I don't know. But it certainly didn't stop the council upping retail water prices another 60 per cent as well.

No doubt these de facto taxes the isthmus local authorities are levying on our water are being used for worthy purposes.

But it is surely time the politicians came clean and took responsibility for them. Pointing the finger at Watercare seems hardly fair.