Rethink trims price increase to 5.9pc

The Auckland City Council is aiming for a 5.9 per cent rise in water bills this year, trimming earlier plans for a 7 per cent rise.

Finance committee chairman Doug Armstrong said yesterday the 5.9 per cent figure was not totally nailed down but the council's water company, Metrowater, was expected to announce the increase in a week or so to 130,000 customers.

The council is also planning a 5.9 per cent increase the following year - taking water bill increases to 17.9 per cent under the current term of Mayor John Banks and the Citizens and Ratepayers-dominated council.

Water bills went up 19.6 per cent in the previous council's last two years.

Mr Armstrong said the council would have liked to keep water bill increases to the rate of inflation, but higher prices from the region's water wholesale Watercare Services and a drop in demand for water meant that was not possible.

A sharp drop in sales by Metrowater led to price rises because of the company's fixed costs, he said.

Demand is falling mainly among big consumers, such as hotels and manufacturers, which are feeling the effects of the economic downturn.

Mr Armstrong said the other factor was significant price increases from Watercare to pay the cost of providing for growth in the Auckland region.

Watercare finance general manager Gary Swift confirmed wholesale increases of about 6 per cent this year for water and wastewater.

Manukau Water is not expected to raise prices for its 105,000 customers this year after absorbing Watercare's increases.

Meanwhile, Green Party co-leader Dr Russel Norman said the Government had set the stage for the privatisation of Auckland's water assets as part of its Super City plans.

Deputy Prime Minister Bill English said during question time in Parliament yesterday, said the region's water assets would not be privatised as part result of the Super City restructuring.

But Dr Norman said Mr English failed to say that protections in the Local Government Act preventing the sale of water assets would remain in force.