Councils facing $500m bill to meet stringent new recommendations on drinking water quality

Friday, 27 April 2018

Water treatment systems across New Zealand could be in for a costly overhaul if new recommendations are adopted.

Councils across New Zealand face a potential bill of around half a billion dollars to meet stringent new drinking water standards, according to a report.

Canterbury alone could have to find almost $200 million to ensure its water treatment plants are up to scratch if the proposals are adopted.

Three people died after Havelock North's water supply was contaminated, prompting protests in the community.

Ministers have been warned that costs to comply with the mooted changes would be 'significant' and possibly unaffordable for communities.

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The costs are part of a report by engineering consultancy Beca. The Government commissioned the firm to assess the cost of implementing two recommendations of the Havelock North inquiry, which came after a deadly campylobacter contamination in the Hawke's Bay community's drinking-water supply.

Beca found the two recommendations – making compliance with the drinking water standards mandatory by removing the 'all practicable steps' clauses from the Health Act, and abolishing the groundwater classification system – would come with a huge pricetag.

It estimated a bill between $308.7m and $573.7m to upgrade 611 water treatment plants across the country with annual operating costs of $11.3m to $20.9m. About 70 per cent of the plants are run by councils.

Capital costs are highest in Canterbury, where it would would cost between $102.1m and $189.6m to upgrade 170 plants and another $4.4m to $8.3m a year to run them. 59 per cent of the region's water treatment plants would fail new drinking water standards. Otago is the next costliest region.

The Beca report said: 'The actual costs faced by many water suppliers will be significantly higher – a very rough order estimate of $250 million in additional capital costs for minor, small and neighbourhood water treatment plants is suggested.'

It found the costs to meet the inquiry's drinking water recommendations 'may be unaffordable for many communities, particularly smaller communities'.

Despite being announced on Friday, the Government review – led by the Department of Internal Affairs – began last year and is well under way, working with councils and industry to assess options to better manage water services.

It has found the so-called 'three waters' [water, wastewater and stormwater] infrastructure is 'under increasing pressure due to multiple issues, and many local authorities are struggling to respond'.

In a report given to Cabinet earlier this month, Local Government Minister Nanaia Mahuta warned of 'significant potential' to strengthen the three waters system, saying: 'There will be implications for New Zealand if the three waters system does not respond to current and future pressures'.

She said: 'While many local authorities appear to be delivering high-quality services that comply with requirements and meet community expectations, there is clear evidence of performance issues and pressure points across the three waters system.'

The review has found 'significant variability' in the way local authorities meet their responsibilities over three waters.

Among the discoveries are:

– Risks to human health and the environment in some parts of the country.

– Evidence of low levels of compliance, monitoring and standards.

– Capability and capacity challenges, particularly for smaller councils.

– Problems of affordability issues, partly down to increased expectations over drinking water.

Mahuta said: 'We need to deal more effectively with the pressing issues confronting waters infrastructure but with a strategic approach in mind.'

The review will inform the Government's response to the inquiry into the 2016 Havelock North crisis that left 5500 ill and three dead from contaminated drinking water,

That inquiry found 'widespread systemic failure' of water suppliers to meet safe drinking water standards, questions about ineffective regulation and concerns over systems capabilities.

Mahuta will report the review's findings in October, with policy and funding proposals to inform budgets over the next two years.