Watercare lobbying sparks row

By AUDREY YOUNG

Watercare Services, the bulk seller of the Auckland region's water, has been censured by most of its shareholder councils for apparently overstepping its authority in relation to the controversial Local Government Bill.

Watercare lobbied the Government for a change in the bill that could have the effect of allowing it to become a water retailer as well as a wholesaler.

All of the regions' councils except one are disturbed about the late lobbying, which took place without first gaining the approval of the shareholder group.

The group comprises Auckland City, which holds 41.6 per cent; Manukau City, 25.1 per cent; Waitakere City, 16.7 per cent; North Shore City, 11.5 per cent; Papakura City, 3.7 per cent; and Rodney District, 1.4 per cent.

Manukau lobbied with Watercare with an eye to using Watercare as a retailer for its own residents.

The others last week expressed their concern in a letter to Peter Drummond, chairman of Watercare board, which the shareholder group appoints.

The mammoth Local Government Bill returns to the House this afternoon for debate.

It is one of several controversial bills that will be pushed through Parliament this week under urgency before the summer adjournment.

Others include the first reading of the Supreme Court Bill abolishing appeal rights to the Privy Council; the Health and Safety in Employment Amendment Bill imposing harsher fines for non-compliant employers; the Pitcairn Trials Bill allowing a Pitcairn Island sexual abuse case to be tried in New Zealand; and the Minimum Wage Amendment Bill extending the starting wage to trainees.

But the 683-page Local Government Bill promises the most sparks, with new provisions for separate Maori consultation and representation, among other issues.

Now it is leading to divisions within a shareholder council group that normally prides itself on its consensus decision-making.

Any expansion by Watercare to water retailing would still require 75 per cent approval of its shareholding group because it would be a major change in its business.

There is no consensus among the councils as to whether Watercare should become a retailer.

Supporters, such as Manukau, believe it could lead to more efficient delivery of water services.

Opponents, such as Waitakere, believe it could give Watercare an incentive to distort pricing to benefit Manukau at the expense of other areas.

At a meeting of the shareholders representatives group, most supported a resolution demanding that the board immediately inform the Government it was withdrawing its submissions for the law change.

But that resolution required a 75 per cent majority and because Manukau exercised its 25.1 per cent vote, the move was defeated.

The letter, dated December 11, informed the board that the vote had been lost, but added: "You should note the strong concern expressed by members of the SRG regarding the process undertaken by Watercare in making such submissions ... "

A copy was also sent to Prime Minister Helen Clark, Local Government Minister Chris Carter and select committee chairwoman Jeanette Fitzsimons.

No one from Watercare Services was available for comment last evening.