About 11.6 billion litres was estimated to be lost last year, about 20 percent of all the water passing through.
The worst pipes for leakage are the asbestos, cement mains that were laid across the city in the 70's and 80's, Dalziel said.
"The quake left them in a more fragile state with a shortened life.
"The renewals programme has been much less than ideal we have basically been sweating the assets."
Dalziel said it is an inherited problem that the city has had for a long time.
"The earthquake has done significant damage. We've had to lift well heads above ground because of the changes to national drinking standards.
"There are multiple issues around here not just the issue of the infrastructure but the priority we apply to it in the Long Term Plan."
She said the public will get a chance to provide feedback on the issue during the LTP process.
Meanwhile, a new co-governance entity is being investigated for the former residential red zone between the Christchurch City Council, mana whenua and the community.
Land Information New Zealand (LINZ) currently owns most of the former residential red zone on behalf of the Crown.
However, it has begun the process of transferring parcels of land in the Ōtākaro Avon River Corridor to council ownership.
Dalziel said the current entity provides advice to the property owner, LINZ, and engages with the council.
"What we are thinking in the longer term is what is the best governance arrangement for this land?
"It's not up for sale, it was land taken from individuals. For some it wasn't a good outcome. It has the human side behind it."