Updated estimates for the rebuild of Whanganui's wastewater treatment plant show costs have come down but residential ratepayers will still be looking at significant hikes in their rates bill once the plant is operating.

A two-day district council workshop was taken through the background to the failure of the original Airport Rd treatment plant, the design of the new plant and peer reviews of that design, and also given estimated costs of the project.

The $41 million WWTP was a focal point of the local body election campaign and Mayor Hamish McDouall promised a workshop would be the new council's first order of business.

Mike Fermor, council's finance general manager, told councillors the latest financial modelling showed some improvement in the rates take once the new plant is operating in 2019-20.


In the 2015-25 10 Year Plan, income from trade waste rates was set at $4.5 million and the domestic rate take at $9.8 million. But estimates given to the workshop have pared the domestic rate back to $7.9 million annually and the trade waste rate back to $2.8 million.

Currently each household pays $351 annually in pan tax (or connection to the city's sewerage system). Again the latest forecasts see that rising to $474 per household when the plant is operating.

Mr Fermor's projections showed that if the major trade waste users (Affco, Land Meat and Tasman Tanning) opted out of the scheme then capital costs would drop to $29 million but the onus to fund the scheme would fall on domestic users meaning the pan tax would rise to $508.

Council has still to determine how it will apportion costs.

Earlier Humphrey Archer of CH2M Beca told the workshop that he believed the original plant - design by MWH - failed because incorrect assumptions were made especially in terms of sludge accumulations in the ponds.

Mr Archer said as far back as 2004 peer reviewers said these concerns "had not been adequately addressed" and the same reviewers were frustrated in not being able to get information on sludge storage and aeration.

His company had peer reviewed the new plant (designed by Cardno) and his statements to the workshop was largely the evidence framed for the council's legal action against MWH over the failure of the original plant.

Mr Archer said his company also reviewed MWH's alternative 2014 design which split the main settling pond into three, separated by a membrane. But he said the review concluded that some of MWH's ideas were relatively unproven and they had questions about separating the ponds with membranes.

Cr Rob Vinsen said MWH's alternative design costs were put at $12.9 million and even if the membranes needed replacing that would be at minimal cost "so it's not a major issue".

But Mr Archer said the membrane option was impractical.

Asked if he was "completely comfortable" with Cardno's design, he said he was and his review in 2014 confirmed that.

Asked if it was too late to look at a separate plant for the city's wet industries Mr Archer said the plant was designed to handle both industrial and domestic waste streams.

"Once decisions are made and resource consents given then a direction had been set and it's very difficult to change," he said.

New councillor David Bennett told the Chronicle that the heart of the matter for him was the fact the major wet industries had not signed up to be part of the scheme.

"This should have been at least provisionally achieved two years ago, because back then we knew that the cost of the plant was going to be about $40 million. This is the major flaw in all that has gone on from then," Mr Bennett said.

He said that as both capital and operational costs were starting to be both quantified and could possibly significantly reduce, his focus would be on three key issues.

"We must do whatever is necessary to keep the major wet industries in Whanganui, the share of the costs must be affordable to those industries, and the share borne by general ratepayers must also be affordable.

"This is still too high in my opinion, unless we can substantially reduce other sections of annual rate demands, and I know that the chief executive officer is working on that."