Part 1: Introduction

Planning to meet the forecast demand for drinking water in Auckland.

Before 1 November 2010, most Auckland city and district councils received water in bulk from Watercare Services Limited (Watercare). Rodney and Franklin district councils had their own water services. The councils distributed drinking water to homes and businesses in their area through their business units or subsidiary companies (local network operators). The councils also collected wastewater and, except for Waitakere, Auckland, Manukau, and Papakura districts, treated and disposed of wastewater. Watercare treated and disposed of wastewater for Waitakere, Auckland, Manukau, and Papakura.

On 1 November 2010, Auckland Council replaced the eight former councils serving the Auckland region.1 Watercare became responsible for providing water and wastewater services to people throughout the Auckland region.2 The ownership of all assets and liabilities relating to the water supply and wastewater services of each of the seven former Auckland local councils was transferred (or otherwise attached) to Watercare.

Watercare’s responsibilities now cover:

  • sourcing water, treating it, and delivering it to homes and businesses throughout the Auckland region;
  • collecting, treating, and disposing of wastewater, including trade wastewater from industry;
  • managing the contracts agreed to before amalgamation; and
  • providing support and billing services to customers.

Watercare is going through a substantial transition in becoming the primary supplier of water and wastewater services to the Auckland region. The services Watercare provides affect everyone in the Auckland region, and we want to provide assurance that Watercare can deliver high-quality current and future services to the people of Auckland.

Because of the importance of the services Watercare provides, we have decided to report on its progress in taking up its expanded role now. In this report, we offer our preliminary views on the transition and note some matters for Watercare to consider.

Our areas of interest in the transition include Watercare’s:

  • standard of customer service;
  • planning to meet future water demand;
  • asset management planning; and
  • funding and pricing arrangements for water and wastewater services.

This report represents our initial findings and notes some points for Watercare to consider when developing its long-term plans for asset management and for funding arrangements. We will review the progress that Watercare has made late in 2011 and report on that progress in 2012.

Overall, we are pleased with the progress that Watercare has made in managing its extended responsibilities. The transition appears to be going relatively smoothly for customers, and Watercare seems committed to improving its service to customers. Watercare is making solid progress in its long-term planning for managing future demand, asset management, and funding and pricing. It should complete all of these plans by 2012.

At the same time as completing this report, we considered aspects of the emerging governance arrangements between Auckland Council and Watercare. Our findings on these governance aspects are set out in our letter to the respective Chief Executives dated 11 August 2011.

1: The eight former councils are Auckland City Council, Manukau City Council, Waitakere City Council, North Shore City Council, Papakura District Council, Rodney District Council, Franklin District Council, and the Auckland Regional Council.

This was in keeping with the Local Government (Tamaki Makaurau Reorganisation) Act 2009.

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