Hide denies water services change is privatisation

Opposition claims that legislation allowing councils to contract out water services to private companies amounts to privatisation are wrong, Local Government Minister Rodney Hide says.

Parliament last night passed the Local Government Amendment Act 2002 Amendment Bill through its first reading.

The legislation provides for councils to contract water services to private companies for up to 35 years - up from the current maximum of 15 years.

Labour MP Phil Twyford said it was privatisation.

"This bill allows private ownership of New Zealand's water infrastructure for periods of up to 35 years, that is privatisation.

"If it's not privatisation ... I want to know how long these contracts would have to be before this Government considered them to be privatisation," he said in Parliament.

Green MP Sue Kedgley said the bill transformed water services from public good to "a source of private profit".

Mr Hide said councils could already enter into public private partnerships for 15 years but that was not long enough for the "economic life of the water assets".

"We don't know whether councils will take up that opportunity," he told Radio New Zealand.

"John Key's ruled out privatisation, what my concern is is to get much better performance in our local government and, indeed, to get the necessary investment that we need in infrastructure.

"Just like they can get a contractor in to mow the lawns, they can get a contract in to help with the water."

- NZPA