On Monday this week the New Zealand Infrastructure Commission, Te Waihanga, released the latest in a series of reports looking at key infrastructure sectors in New Zealand – this time focusing on the water sector. The series of reports that include to date the water, energy and telecommunications sectors will inform the development of Te Waihanga's new 30-year infrastructure strategy. A key statutory responsibility for the Commission is then to report to the Minister for Infrastructure on the ability of existing infrastructure to meet community expectations and priorities for infrastructure through this 30-year infrastructure strategy, which the Government is then required to respond to.
While the report on the energy sector was intentionally produced to align with the Climate Change Commission's draft report, the report on the water sector sits alongside the Three Waters Reform Programme – a programme led by the Department of Internal Affairs (DIA) to fundamentally reform local government three waters service delivery arrangements. This report is a snapshot of the water sector as it stands today. Many of the issues identified in the document are not new, as the sector is already well underway in the comprehensive DIA reform process and the overall intentions of the Government to reform the sector is already well understood.
As significant progress is already underway to improve the delivery of drinking water (specifically the Water Services Bill available here, as well as many decisions already made by the DIA available here), the key opportunity for submissions will be in influencing a coordinated review and strategy for all aspects of water management. It will be interesting to see how the Commission's 30-year infrastructure strategy integrates water infrastructure within the strategy for the broader infrastructure system and weighs the changes required against other priorities.
Due to its abundance, New Zealand's profligate use of water in New Zealand has been less apparent when compared with other countries. However, water exists within a complex framework of competing environmental, economic, social and cultural needs and aspirations that demand a step change in future freshwater management.
A key theme in the report is that there is only one wai (water) and therefore water services are inherently linked. However, as water has a broad range of uses, it is helpful to consider water infrastructure as falling across six general categories:
- potable (drinking) water;
- wastewater (sewerage);
- stormwater;
- irrigation (productive water);
- river control & flood protection; and
- rural drainage.
The report illustrates the interconnectedness of water and how the six main types of water infrastructure interact with and allow management of water resources. The fragmented nature of the water sector is also highlighted, noting that a more cohesive approach to freshwater management is required to achieve optimal environmental, social, cultural and economic outcomes. The key finding in the report is that the status quo is unlikely to be sustainable.
The Commission notes that across the sector, water service providers (particularly those at a smaller scale) face difficulties in managing infrastructure assets and accessing the technical skills required to manage and upgrade them to meet human health and environmental requirements. With the current approach to compliance with, and enforcement of, resource consents relying largely on self-regulation by Councils, the report highlights the need for more consistent regulatory oversight at a national level, rather than a regulatory framework that is "ineffective, incomplete, or absent". Like with many other infrastructure sectors, there is also increasing pressure for water service providers to increase resiliency to climate change effects through infrastructure design.
Although reform for drinking, waste and stormwater (the three waters) is underway, the growing number of challenges faced by water operators discussed above as well as the need to renew aging networks, provide for population growth and manage affordability within existing funding mechanisms, and in an environment where rate increases are highly visible and often contentious - makes it clear that water infrastructure will be a key part of Te Waihanga's broader 30-year infrastructure strategy, particularly as priorities are identified.
The process for the development of Te Waihanga's 30-year Infrastructure Strategy is set out in our previous alert here.
Opportunity to be involved
Although there is no formal consultation process on the reports, Te Waihanga has stated that feedback now on the "Sector State of Play: Water" discussion paper (and the earlier discussion papers released) will contribute significantly to the development of an evidence base for its infrastructure strategy. Please contact one of our experts for more detail on what the strategy might mean for your business and how you can become involved.