Auckland mayoral candidate John Tamihere calls for the sale of 49% of Watercare with the money raised used to clean up the city's beaches

Auckland mayoral candidate John Tamihere calls for the sale of 49% of Watercare with the money raised used to clean up the city's beaches

Auckland mayoral candidate John Tamihere is calling for the sale of 49% of Watercare, Auckland's water supplier.

He says Auckland Council could sell the stake to the Accident Compensation Corporation or the New Zealand Superannuation Fund, with the money raised used to clean up the city's beaches, which Tamihere argues Mayor Phil Goff and the council have neglected for too long.

Watercare is 100% owned by Auckland Council and operates as a Council Controlled Organisation (CCO).

“Releasing the value of 49% of the Watercare balance sheet means Auckland citizens won’t have to stump up for the huge bills that are coming our way – like it or not – to update Auckland’s water infrastructure,” Tamihere says.

“The only way we are going to get clean beaches and waterways is to invest in the infrastructure to stop run-off getting into the waterways. There’s no point in having an ambulance at the bottom of the cliff, we need to prevent the waste from getting there in the first place.

“Goff should come clean on how he plans to fund the Watercare investment the city needs. He has to stop this outdated thinking that you can keep gouging the ratepayer.”

Tamihere says he will be releasing his full policy on water infrastructure and management over the coming weeks and says Aucklanders need to be told the truth on how the city’s ageing water infrastructure is going to be upgraded.

“We can’t put our heads in the sand any longer. We have NZ institutions such as the Superfund and ACC screaming out to invest in Auckland infrastructure and Goff won’t allow it to happen. It’s time to reduce the burden on ratepayers and use the city’s substantial asset portfolio to work for ratepayers, not the other way around,” he says.

But Goff isn’t impressed and says selling 49% of Watercare would force up water rates and burden lower income families with higher costs. 

“Privatising Watercare, whose assets are valued at around $10 billion, would force up the cost of water rates with any investor seeking a 7% to 10% return on their investment,” he says.

Goff says Watercare, which is effectively a monopoly in the region, doesn’t pay a dividend to the council and is legally required to provide water at the lowest reasonable price.

“Pushing up water rates would hurt families that use more water and place a heavy burden on those on low incomes,” he says.

Goff says partly privatising Watercare would make it less accountable to the people of Auckland which contradicts Tamihere’s previous calls for greater council control of its CCOs.

“Watercare is a well-run organisation which provides an essential commodity efficiently and at a relatively low cost. It doesn’t make sense to mess with its ownership and structure which could put this at risk and cause big rises in water rates.”

In May Tamihere said the Auckland Council should privatise the Ports of Auckland’s business operations to help ease the financial burden faced by the city’s ratepayers. Under his proposal the Super City would still retain ownership of the land the port sits on. The new port owners would have to lease the land back from the council at a “credible commercial rate for up to 25 years”. They would also be expected to develop an agreed exit strategy.

According to Tamihere’s policy proposal, at the end of the lease the site could then be redeveloped for “public and other uses that make the best use of the prime waterfront real estate”. Auckland Council currently has 100% ownership of the Ports of Auckland and it received an annual dividend from its shareholding of $51.1 million in the 2017/18 financial year.

Polling date in the mayoral election is October 12.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

9 Comments

Comment Filter

Highlight new comments in the last hr(s).

Oh dear... Just when I was considering voting for the guy it seems hes just another stale neoliberal peddling the same tired old strategies that impoverish us over the longterm

God help us. Another fool who wishes to sell the family silver because it needs to be cleaned.

First we have the idea about selling the port of Auckland now we have this utter stupidity.

Reduce the dividend to Auckland Council. Invest and renew the infrastructure. Keep the utility in local hands.

Glitzy,

I don't live in Auckland,so don't have skin in the game. But,I do live in Tauranga where as you probably know,we have the best performing port in NZ and in which,the council has the majority stake. Auckland make a huge mistake in taking the port private and i see no reason why it should not sell 49% of it to the NZ public. There would be huge demand from local investors,both institutional and individual.

Watercare is working well. Leave it alone.

Get used to the idea of paying for infrastructure we use rather than only seeking to have others pay for it.

Bad move Tamihere. How about giving NIMBY rate payers two options:

a. Raise rates.
b. Allow more residential building and benefit from having more rate payers, aka more income for beach cleaning.

Drop Mic.

A more credible alternative is to invoice the Govt for the added population pressure from refusing to enact the immigration reform they campaigned on and then forgot about.

It's still daft but it's more credible than what JT is proposing.

YES YES YES , if anything Watercare needs to be opened to competition ,its a flippin' monopoly of the worst kind

What makes you say that?

Most accounts I've seen suggest it's by far the most functional of the infra organisations in Auckland, largely because it's run primarily by experts and with a clear mission.

open it up to competition will only increase the price due to duplication of infrastructure that needs to be paid for.
where we not told doing the same to the electricity generation would lead to lower prices, how did that work out as each new entity needs to make a return and has to invest in infrastructure.
for certain key things a monopoly is the cheapest way to fund something as long as you have the right structure and people in charge of it.
ie target should be make only enough that is needed to invest for growth of the city so keep water rates to what is needed to cover cost of capital
and no dividend paid to the lazy council that can not keep its cost under control