Auckland Water Shortages and Watercare

It seems like yesterday to me, but 1994 was a while ago. Auckland had a much bigger water crisis than we're experiencing now, and it was part of my political education. At the time Watercare was owned by the Auckland Regional Services Trust (ARST), having been put there after a hefty dose of central government driven local government restructuring. Parts of Auckland local government services were privatised - including its landfills. This was in the hey days of neo-liberalism. Regionally owned bulk water services and bulk waste water services were removed from Auckland's regional government (at the time a fresh Auckland Regional Council itself a cut down version of the celebrated Auckland Regional Authority), and placed in ARST, a sort of waiting room for privatisation. That was the birthplace and birth process of Watercare, and much of its institutional behaviour was designed then.

The water shortage came as big surprise to its owners and privatisation strategies took second place to addressing the water crisis. In 1994 due to an unusual roll of the political dice, Alliance candidates were the majority elected to the ARST, and as an active Green Party guy at the time, I was able to get, through my contacts, some Watercare information about what was happening...

This Watercare graph shows how the storage levels changed 1991, 1992, 1993 and 1994. The "normal demand management" curve 1991- end of 1993 shows the typical oscillation of dam storage levels from full to 75% of full. This is normal and to be expected when rainfall is normal. The dam levels get drawn down in summer and fill up in winter. But when there's a drought and the expected winter rains of 1993 didn't eventuate, followed by normal summer consumption, then, by May 1994 things were looking problematic. The graph projects water levels from June 1994, based on different levels of "savings" - up to 30%, and how many days before the dams would be empty.
 

A very well funded conservation campaign was run. (NB: As shown in the graph, Watercare had already run various media campaigns starting at when levels were at 60%, and then hose bans etc)

The main "customers" of Watercare - which then was a bulk water wholesaler - were the four city councils, North Shore City, Waitakere City, Auckland City and Manukau City. (This is before amalgamation). As the drought evolved, some Councils were more supportive of conservation than others. At the time, it was the Councils that metered water use, and charged users for their water. Not Watercare. Watercare charged each of those four councils in bulk. Councils used their water revenues to maintain local water network infrastructure. There was quite a competition between councils as to whose networks were the least leaky - water leaking from pipe networks is a problem the world over. One of the things that got lost when Watercare took over the retailing of water, not just the wholesaling, this bench-marking process has gone. It is not in Watercare's interest to check how much water is leaking from its network. It concentrates on metering what comes out of the pipes and charging customers accordingly.

At the time, Aucklanders were served by a robust NZ Herald with reporters who delved into the detail and understood much of the politics of what went on beyond the media statements.

As the crisis unfolded, about 10 options were canvassed for additional supply. At the time, taking water from the Waikato was at the bottom of the list prepared by senior planners within Watercare, but it quickly jumped to the top of the list when the corporate types who moved into Watercare at the time of the crisis, looked at it. Especially when the possibility of building an Emergency Pipeline got floated, complete with fast-tracking and RMA avoidance.
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Cartoonists had a field-day with this. Some Councils were all for the emergency pipeline, others were not so sure. And meanwhile it started raining...

Sometimes the pipe was up, and sometimes it was down. It was certainly an idea that appealed to the newly floated Watercare, for all sorts of reasons but the main one was that as a business it would be much more viable with a continuous run of river source to complement its lake storage. At the time I did accept that Auckland needed an insurance policy - a source that could be used when there was a serious crisis. But that preference should always be for raw water sources that were clean. And the Waitakere and the Hunua dams - being in bush catchments without agriculture or urban activity certainly delivered that.

I prepared this graph at the time of the drought (September 1994), which was after rain had been falling reasonably regularly - but not particularly heavily - for 10 weeks or so. It was designed to reveal just how negative Watercare's projections were (3 are shown). And at the time Watercare had got its teeth firmly into the emergency pipeline project. Watercare really wanted that project.
 

NZ Herald reporters - notably Philip English - followed the issue and developments extremely closely, and stuck hard to the facts. It was a matter of huge public interest.

This story is an excellent example of the reporting at the time. The Mr Cook quoted here is an example of the public relations investment that Watercare specialised in at the time. Since then Auckland Council and all Auckland CCO's have invested heavily in public relations experts and concentrated on spin-doctoring and managing and influencing public opinion. One of my major pieces of education through this whole period was that information asymmetry is a thing - that large CCO's and councils hold onto information that is not in their interests to make public. Anyone questioning local government - and especially CCOs is at an enormous disadvantage because of the lack of transparency around key pieces of information. Reports are routinely with-held etc.

I note the mention in this article of Ashton Wylie. He and I met after I ran some OpEd pieces in NZ Herald. He was a wealthy importer of Pansonic equipment - and passionate about Auckland's water resource. We got on like a house on fire and he funded me to seek expert advice outside New Zealand for expert evidence. He help me financially when it came to the Environment Court - see later...
 

This report is dated 28th September. I remember at the time phones running hot - people wanting to know "how much rain fell out your way?" It was knife-edge. Watercare was leaving no stone unturned and had mobilised a significant lobbying campaign in Wellington to keep MPs on side. And all funded with public money.

In fact the Emergency Pipeline project never happened. It rained enough and at the right time so that the Emergency legislation did not get a majority in Parliament. So 1994 ended well. But just as rust never sleeps, neither does a good project inside Watercare. considerable sums had been invested - of public money - in getting that project off the ground. Much of that effort was then directed at developing a proper Waikato based bulk water source, and sometime in 1997 Watercare notified resource consent applications to build a pipeline, a new treatment plant, and to take water from the  Waikato River and treat it and augment Auckland's water supply. Which is where the next part of this story goes....

One of the experts I found - and he came out to New Zealand - was Professor Dan Okun. From South Carolina, USA. He was profoundly expert and enthusiastic about the reuse of treated wastewater for non-potable purposes. I learned so much from him. His expert evidence was a big part of my evidence in the Environment Court. He knew a lot about cities in the USA that routinely reticulated highly treated wastewater for industrial washing, and golf course irrigation and suchlike. It gets reticulated in purple pipe networks. It's a whole network industry across big parts of the USA. Turns out also to be common in arid parts of Australia, and also in Japan. The diagram above is one I prepared based on Prof Okun's advice - mainly to show how 250,000 cubic metres drawn from a dam daily (equivalent to 250 million litres) - can be equivalent to a total supply of 750,000 cubic metres per day if you use the water three times before discharging it. It's simplistic - and doesn't talk about golf course and park irrigation (where water evaporates). 

Remember this all happened 25 years ago. And the discussion you get from Watercare today is just as ignorant and uninformed as it was then. Its business model, with a single network of supply of freshwater, top quality, used for everything, from drinking to washing out concrete trucks, all using premium piping, and all charged for at the same rate, used once, then wastewater treated to a "you can swim in it" standard, which is then all dumped. 
  

A key issue with taking water for drinking from the Waikato is the fact - at the time - there were almost 3,000 separately consented discharges into it. Farms, factories, geothermal, and sewage treatment plants. Contaminants that were most significant included organochlorines from horticulture, and cryptosporidium bugs from dairy farm sewage. These contaminants are not treated by the water treatment carried out on raw waters from the Waitakere and the Hunua dams. If raw water did come from the Waikato, it would need additional treatment.

I haven't published the full page advertisment that Watercare ran at the time. It showed a glass of water. The message was that the water would be the same. I challenged them at the Advertising Standards Complaints. Watercare - like Ports of Auckland - retain the best and brightest lawyers from Russel McVeagh. It isn't just about information asymmetry. Watercare has a culture of winning. Not just sustainable reporting awards (which are a travesty), but anything. Particularly where its reputation might be challenged. It's only public money after all.
 

Nevertheless the cartoons kept coming,and public concerns were real.

Watercare's resource consent applications were granted by the relevant TLAs - of course it was Environment Waikato that heard the application to take water from the Waikato, and due to the vagaries of the RMA, once water is in a pipe, the RMA is no longer interested in it. Many of us joked about it being "discharged" from taps and pipes into cups and glasses - but those arguments didn't hold much water....

You get a flavour from the above report as to how Watercare (and Ports of Auckland, and Auckland Council), can all throw piles of public money at public interest issues to ensure they win. But there was information and concern in the public arena about what was in the Waikato water.

This NZ Herald editorial summed up some of those concerns. Just a week or so before the Environment Court hearing, Waitakere City Council withdrew its appeal, and then so did Tainui (the Sunday before - it was gifted a chunk of land I think the site of a maori battle, by Watercare, which bought them off). That left Mr Hamilton and me as appellants. Not good.

But then I discovered that Manukau City Council had become a s274 party to my appeal. I was approached by someone and encouraged to keep my hat in the ring as they tried to work something though with Watercare. Manukau City is closest to where Waikato water would come out the tap, and had concern about water treatment. I learned afterward that Watercare was pressured by Manukau City council to sign the "Manukau Agreement" - this committed Watercare to including two additional treatment processes for Waikato water. One was a carbon bed filter - for organochlorines, and the second was nano-filtration - for cryptospordium.

This was a huge result. But went totally under the radar. If I had withdrawn my appeal, under pressure, Manukau City Council would no longer have had any standing in the appeal....
   

My second expert, funded thanks to Ashton Wylie, was Dr Perri Standish-Lee from California (I think). She uncovered the work of NZ's Dr Gillian Lewis and submitted her own arguments as an expert witness for my appeal. You will see reported in this article that I stood for North Shore City Council at the time.
 

Again, another positive NZ Herald report of how Watercare sued me (and Mr Hamilton) for costs after the Environment Court appeal. The gains won from the action were all in the Manukau Agreement already. We gained nothing more in the Environment Court.

So. What does all this mean now? Well - Watercare is bigger and stronger now than it was in 1994. There are no sizeable city councils to challenge it. Auckland Council has as much control over it, as it has over Ports of Auckland or Auckland Transport - ie little control. Watercare is very well resourced, and it's no surprise it is so impervious to challenge. It was designed and built by a chief executive for whom winning and the appearance of winning was everything. He was appointed in 2010 on the strength of this reputation to design the newly amalgamated Auckland Council. This is just as robust in the face of public concern and any internal dissent.

A major factor in Auckland's water shortage in 2020 is the monopoly structure of the responsible organisations, their focus on revenues, and their interest in delivering and funding a steady stream of large engineering projects to keep expensive and highly qualified project teams in employment.

Until those things change, and until there is a fundamental commitment to sustainability, including the reuse of recycled water for example, the widespread use of locally owned rainwater storage, and appropriately encouraged and systematic water conservation systems Auckland will continue to be vulnerable to weather and to opportunistic behaviours from its publicly owned water utilities.