$3500 bill for every household in small-town New Zealand to fix ageing wastewater plants

Wednesday, 24 October 2018

Local Government Minister Nanaia Mahuta has led a huge overhaul of water provision that could see regional bodies in charge of supplies. (Video first published in November 2018)

Householders could be hit with a bill of more than $3500 every year to help pay for billions of dollars of upgrades needed to fix New Zealand's wastewater systems.

Councils may have to find up to $2.1 billion to fund vital improvements to the ageing network so treatment plants meet environmental standards, a report found.

Small and rural communities would be hit hardest, with more than 80 per cent of the plants that need upgrading servicing communities of fewer than 5000 people.

Local government leaders say major costs to replace infrastructure leave such communities struggling, and urged ministers to ensure there is policy specifically to help small authorities.

New Zealand's water services are in desperate need of an overhaul, an issue epitomised by this overflow pipe spewing waste onto a West Coast beach.

* Christchurch 'will not be bullied' into funding widespread water reforms

* Major water management reform could take responsibility for drinking water from councils

The bill to upgrade wastewater treatment plants across the country could top $2 billion.

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

* Councils concerned by possible drinking water changes**

Dave Cull, president of Local Government New Zealand (LGNZ), said: 'We have long been calling for the Government to put in place targeted support for small communities struggling to pay for water infrastructure replacements, particularly as their ratings base shrinks due to ageing and urbanisation.'

The report, by Boffa Miskell and GHD, is part of a major review into how wastewater, stormwater and drinking water are managed, and is being used by the Government to inform policy while it considers how best to reform the three waters sector.

Estimated costs to upgrade publicly-owned wastewater treatment plants that discharge to freshwater – which at 152 is less than half of the 321 plants around the country, serving just 13 per cent of the population – range between $1.4b and $2.1b, four times what is needed to fix drinking water infrastructure.

Another $39 million to $59m will be needed annually for operating costs.

Costs to upgrade plants could fall to small communities, hitting them hard in the pocket.

Small towns and villages face the biggest bills, with residents in communities of fewer than 500 people having to find about $3576 every year for 25 years to help fund repairs.

The average annual cost across New Zealand would be $1138.

LGNZ president Dave Cull wants funding from the Government specifically to help small communities.

The Manawatū-Whanganui region would be hardest hit, having to find up to $500m to upgrade the 24 treatment plants in the area that serve 133,000 people.

In the South Island, West Coast residents face potential bills of up to $180m to improve 10 sites that serve 18,000 people, while Cantabrians may have to find $46m.

John Pfahlert, chief executive of water management group Water New Zealand, said the costs were 'alarming', with many local authorities already failing to meet existing discharge consents, let alone requirements over freshwater management.

'It is clear that there is an urgent need to upgrade many wastewater treatment plants and a serious need to find an equitable way to share the costs across communities,' he said.

'Improving the quality of waste water to an acceptable standard will be even more costly than fixing our drinking water system. That is why we would urge the Government to address the delivery of all three waters – drinking, storm and wastewater – when it embarks on its reforms.'

Cull said the report served to underline the need for direct policy to provide financial support for small communities, but did not support the widespread restructuring of the water sector into 'regional water monopolies', an idea being considered by the Government.

'This report shows that there are specific issues in the wastewater space that need specific policy solutions, targeted to where the problem is, not one-size-fits-all mandatory aggregation.'

In a joint statement, the Department of Internal Affairs, Ministry for the Environment, regional councils and the report's authors said the research provided an 'indicative and high level cost as a useful starting point'.

'The costs associated with upgrading wastewater treatment plants for particular contaminants are only one piece of the much larger jigsaw puzzle in trying to quantify the costs across a complex system.

'The cost of the upgraded plants, and their ongoing operation and maintenance, will be significant for small communities, particularly those with declining populations, and will present pertinent policy questions on how these communities will be able to meet environmental objectives,' they said.

A similar assessment by Beca in April found it could cost up to $573m to meet stringent new recommendations over drinking water standards.