Business Booms at Watercare

The large newspaper advertisements in NZ Herald today, and the stormwater story earlier in the week, are shots across the bow of unsuspecting Auckland public.

The newspaper advertisments described Watercare's new charges for water and wastewater, and for residential and business ratepayers. Of course it has always been deeply ironic that the "One Council, One Bill" rhetoric was never ever going to be true. The re-organisation was always intended to allow Watercare to be a law unto itself, with its own computer system of residential and business ratepayers, and with its own business model and charging system. It is now almost stand-alone.

Watercare has embraced Central Government's business growth model with both hands. Watercare is now well placed to be sold off as a going concern, taking a sizeable chunk of Auckland Council's debt with it, and the promise of some very large, well funded, centralised network infrastructure projects.

The devil here - is behind the detail in Watercare's media release.

There are a few things that need to be aired, that are hard to discern readily in the Council's Ten Year Plan, which is the shop window on what Watercare plans:

1) I support the fact that Watercare can now charge residential ratepayers for their wastewater services on a volumetric basis. This will provide an economic incentive for water consumers to manage their consumption of water.

2) But these changes do not apply to business customers. We see in Watercare's public statement that "existing arrangements will apply...". While these are to some extent volumetric, their main purpose is to allow businesses to tip contaminants and trade wastes into the sewer, where they mix with ordinary sewage, ensuring that the cocktail that finally arrives at Mangere is completely untreatable for re-use. So Watercare is perpetuating an outdated system, which provides little incentive for Auckland business to clean up its act at source, and generates a nice little earner for Watercare. The resulting biosolids are too contaminated to be reused as soil conditioner, and must be landfilled. Hence Watercare's desire to continue its business oriented dumping operation by landfilling the biolsolids at Puketutu. (I have walked on the existing biosolids landfills in Manukau Harbour. These are not happy places.)

3) The Council's Team Year Plan includes the debt level for the Auckland Council Group - ie Council, plus Council Controlled Organisations - including Watercare. The debt level that Council has voted for is close to $13 billion - almost 3x what it is now. It appears that around $3 to $4 billion of that debt is Watercare debt. Part of the increase in that debt will be the proposed $800 million "Central Interceptor" project - the huge pipe/storage system to be dug under Auckland, allowing business as usual activity to occur, and to allow for more of it.

Councillors should not be allowing Watercare to hide this burgeoning centralised network of water and wastewater infrastructure - on the basis that the bills for it reduce Council's own rates bill, and on the basis that "they can blame Watercare...not us".

Watercare's practice is increasingly unsustainable. It is already the biggest user of electricity in Auckland - because of its need for pumping of water and wastewater, and for the electricity intensive, centralised treatment plants that it operates.

The fact that Auckland Council has to deal with stormwater, now that Watercare successfully separated the meter-paid waters, further exacerbates this trend. I await with interest the debate over the stormwater disposal charges that Watercare will levy on the Council, when Council seeks to divert pesky stormwater flows into Watercare's Central Interceptor. Another nice little earner for Watercare.