Scottish water regulator calls for more investment in Auckland's water assets

Watercare was found to be the most efficient water company in New Zealand. Photo / Dean Purcell

Auckland Mayor Phil Goff says the council will consider a proposal to invest a further $1.7 billion in water infrastructure.

A review of Watercare by the Water Industry Commission for Scotland (WICS), has found it performs better than other water companies but needs to invest more to reach its potential.

The report said Watercare may have to spend $4.7 billion by 2032, of which $1.7b is unbudgeted.

WICS chief executive Alan Sutherland explained the report's findings to councillors today where Watercare outlined its updated Asset Management Plan.

Goff said the council will seriously consider the recommendations but noted there are constraints on the ability by the council and council-controlled organisations, which include Watercare, to borrow more money.

The council's borrowing limit of 270 per cent of debt to revenue has risen to 290 per cent this year due to Covid, but must come back to 270 per cent or lower next year to preserve the council's cherished AA+ credit rating.

Goff welcomed the finding by WICS that Watercare is by a significant margin the most efficient and effective water provider in New Zealand.

"Also important is its challenge to further lift Watercare's performance to match that of leading water authorities in the United Kingdom.

"This is a matter we will be discussing in the near future with Government as part of its water reform proposals," he said.

Auckland Mayor Phil Goff. Photo / Herald

The WICS report reviewed Watercare's economic performance in the 2018/2019 financial year against the performance of water providers across New Zealand and in the UK, and made recommendations for how it could further enhance its performance.

The review found that Watercare is New Zealand's best economically performing water provider and has delivered savings to its customers of $100 million per year compared to legacy council forecasts, while delivering a strong investment programme.

Sutherland it is clear that Watercare's improved performance since 2010 has benefited Aucklanders.

"In Scotland, allowing resources to Scottish Water to 'spend to save' was critical in kick-starting what became a huge leap forward in performance. Watercare could clearly similarly benefit.

"Building on what has been achieved is going to be critical as it is clear that Watercare will need to invest much more year-on-year in renewing and improving assets. This investment will ultimately reduce unplanned maintenance and operational costs," Sutherland said.