Watercare Starts New Era As Financially-Independent Water Company
Watercare's financial separation is a key component of the government's Local Water Done Well legislation that was announced in May 2024.
Mayor Wayne Brown says the financial separation is good news for ratepayers.
'This is a positive outcome and came out of a deal we struck with Wellington to keep water affordable for Aucklanders. Watercare will now be financially independent and have the capacity to get on and deliver key wastewater and drinking water projects for the Auckland region. Watercare's fiscal plan is great news for Auckland ratepayers because it will improve council's overall financial position,' says Mayor Brown.
Watercare chief executive Jamie Sinclair says it gives Watercare the ability to borrow in its own name for the first time, with no support from council or the government.
'I know the words 'financial separation' don't mean much to most Aucklanders, but the real benefit is that we can now borrow more to deliver our ambitious $13.8 billion infrastructure programme without steep price rises for our customers.
'With the ability to borrow more money, we can keep prices lower than we could have otherwise, and we'll have more certainty when it comes to delivering new and upgraded infrastructure for Tāmaki Makaurau.'
Today, Watercare's water and wastewater prices increase by 7.2 per cent.
'Our pricing is now regulated by the Commerce Commission, which will monitor and report on our performance regularly,' Sinclair says. 'This will give Aucklanders confidence that we're delivering value for money.'
Sinclair says it took a huge amount of effort – both in and outside Watercare – to get everything in order for financial separation.
'Last year the government gave us an ambitious deadline of 1 July for financial separation, and a huge amount of work has gone into getting us to this point.
'We were able to meet this deadline and achieve great value for Aucklanders due to a strong Aa3 credit rating from Moody's and the successful completion of a $3.4 billion capital raise – New Zealand's largest corporate debt capital raise.
'We've also had a lot of support from the team at Auckland Council and our professional advisors, who have supported us through the financial separation and funding process and helped us to achieve a fantastic result for Auckland.'
Watercare plans to invest around $1billion on new and upgraded infrastructure for Auckland over the next year.
'Our infrastructure programme has really ramped up in the past few years, and today we have a record number of projects in the construction phase, with 120 underway all across the city,' Sinclair says. 'These projects are about improving services and environmental outcomes, and supporting new housing as our city grows.
'Right now, we have crews currently building a new outfall for our upgraded treatment plant at Clarks Beach, we're making great progress on a significant wastewater treatment plant upgrade for Wellsford, and we're starting a $64.4 million wastewater upgrade for Māngere and Favona, which includes a new pump station and pipelines. This work all supports growth and helps to improve the environment.
'This financial year our investment in replacing water and wastewater pipes in suburban streets will also increase six-fold, and that level of investment will continue going forward. These renewals are an important step towards more reliable water services, fewer leaks and fewer wastewater overflows.'
About Watercare:
Every day, we supply about 440 million litres of safe drinking water to 1.7 million people in Auckland. We also collect and treat their wastewater.
Over the next 10 years, we will carry out more than 1000 projects to improve and expand our water and wastewater infrastructure – investing an average of $3.8 million every day ($13.8 billion in total).o
Our infrastructure investment programme will help to keep our precious environment healthy by reducing the frequency of wastewater overflows onto land and into waterways.
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