Wellington's water woes could cost $1 billion a year to fix

Wellington Water is warning that fixing the region's water system would cost around $1 billion each year for the next 10 years.

The huge price tag was arrived at as part of preparations for water reform, its chief executive Tonia Haskell told Morning Report.

"The number's been knocking around for a while, I think we prepared it about six months ago for the National Transition Unit," she said.

"We prepared a budget that was unconstrained by affordability and deliverabilities, so we took everything that needed to done around the region, and it adds up to a billion dollars a year, for the next 10 years."

The National Party's pre-election 100-day plan listed scrapping the three waters reforms as a top priority, and it is unclear what would replace it.

Wellington Water was calling on the government for help and Haskell said water assets needed to come off councils' books because they were restricted in how much they could borrow.

She said continuing with the council-controlled model meant councils would still struggle with the same financial restrictions.

"We'd need to talk with the government about what a model would be where that constraint can come off so we can take a more commercial approach to using our assets to fund the water infrastructure that people need".

Haskell said Wellington Water was hopeful the new National-led government would support separating water assets away from council control.

But she could not say how much money could be borrowed if water assets were separated.

"At the end of the day ... the revenue comes from our ratepayer base and we would need to set up an organisation and it depends on the size of it. Clearly, the bigger the new entity is, the more headroom you've got for greater investment."

Haskell said there was historic under-investment in water infrastructure by the region's councils that needed to be addressed immediately.

"We put out to our councils what it is that they should be investing and then they apply the money that they can afford to invest, or choose to invest."

It was "always a balancing act" she said, but councils "simply could not afford" to meet the costs of that past under-investment.

No 'exact figures' without detail - Upper Hutt mayor

However, Upper Hutt's mayor is dismissing the hefty $1b-a-year figure.

Wayne Guppy said the price quoted by Wellington Water was not helpful because the numbers were on the highest scale.

"They're extreme costs, they're what they call unconstrained costings - so, get a figure and you add a hundred percent to it," he said.

"All their figures, where they don't have a detailed business case, they add a hundred-percent contingency. 'Till there's detail done, you don't get the exact figures."

Guppy said ratepayers would be affected the most, whether a new water entity was created or not.

'We just can't afford it' - Porirua mayor suggests privatisation

Porirua mayor Anita Baker wanted to see Wellington region's water move towards a privatised system because ratepayers would not be able to afford it, she said.

She said there should be a more commercial approach to funding water infrastructure.

"If you look at Auckland they have the water meters and it's privatised, you pay for what you use, it's no different down here. I would like to see that happen. We all do the best we can but we're not doing a good enough job because we just can't afford it, that's quite simply we can't borrow any more money than we actually have."

Baker said 41 percent of the city faced water leaks and wanted to see a new entity do more work than councils.

"I know it could borrow more depending on its size and you'd have more contractors available, more people to do the work, we've all got large leaks some of us are investing more than others but we all need to step up and do our bit."

Residents were growing frustrated that they were having to conserve water when the pipes were not being fixed, she said.

'Status quo ... not sustainable'

Meanwhile in n Lower Hutt, problems around pipes are the city's number one issue. Mayor Campbell Barry is concerned the can will continue to be kicked down the road and the infrastructure will get worse.

"If we aren't continuing to ramp up that investment and water infrastructure of that, the problem gets bigger, we've got 230km in backlog of pipe renewals that we need in Lower Hutt along. It's going to take a number of years to clear that backlog."

He said reform is needed to help solve the issue.

"The current status quo of basically councils looking to individually fund that water infrastructure upgrades that are needed are just not sustainable."

He was also calling for financial assistance from the government and balance sheet separation from the council.

"That balance sheet separation and size and scale will allow any future entity to be able to borrow at a much larger amount and spread over a much longer period of time. The same people will still be paying the bills, but they'll be doing it in a way which wouldn't need as large increases in rates under the current financial tools that the councils have," Barry said.

While RNZ was speaking to Wellingtonians on Lambton Quay about the costs to repair the pipes, former Attorney-General Chris Finlayson said he considered this the number one infrastructure issue facing the capital.

"It's a very serious problem, it's got to be confronted ultimately though they need to be put in funds by the various councils so it can be done," Finlayson said.

"I think they're going to have to get their priorities right and there's not much evidence that they're capable of that at the moment and if the council can't do it then commissioners should be appointed who will concentrate on the things that matter rather than rubbish."

'We're returning the assets to local control and ownership' - Luxon

Speaking to Morning Report on Monday, National Party leader and incoming prime minister Christopher Luxon said the party had outlined its approach to water reform back in February.

"We're returning the assets to local control and ownership," he said.

"Many of the councils, through their own submissions to this government, talked about wanting to form council-controlled organisations, if we can structure those in a way where they can access long-term debt, so they actually have long-term debt that means they can consistently maintain those assets each and every year, that's what we're looking to do."

He acknowledged each region had particular "problems and challenges" when it came to water infrastructure.

"We'll work our way through with each of the different regions on the issues that they're facing but ... it's really about making sure that there is access to long-term debt financing and funding, that councils then are held to account to make sure that they're [sic] kept those assets well maintained ... and then, importantly, [to] make sure that we have also standards around drinking water."

Another of the National Party's 100-day action plan promises was to withdraw central government from the Let's Get Wellington Moving programme but Luxon said any wider issues about Wellington councils' spending priorities were matters for the region's voters.

"Those are decisions for the people of Wellington; they've voted for this district council and council to come in, those are questions for them ultimately."