|THE WAIKATO WATER PIPELINE - Uneconomic Unsustainable Unhealthy|
|Prepared by: Joel Cayford
- 2nd October
Email: Joel Cayford
Homepage for Dr Joel Cayford - Water & related articles
Following the water shortage of 1994, and the decision by Auckland region councils to agree to Watercare Services 1995 recommendation to increase the water supply drought standard from a 1 in 50 year drought standard to a 1 in 200 year drought standard, Watercare Services Ltd (WSL) commenced its Long Term Future Water Source investigation. That process indicated that a pipeline to the Waikato River, some thirty miles to the South of the city, best met the objectives investigated.
Currently, the fresh water needs of the one million inhabitants of the City of Auckland New Zealand, are met from fresh water storage lakes nestled into the native bush catchments of two mountainous areas immediately adjacent. By contrast the Waikato River is the biggest river in New Zealand. Its catchment is the home of some 500,000 diary cows, and a similar number of people whose sewage effluent discharges directly into the Waikato River.
In 1998 Watercare obtained the necessary resource consents for the project after a controversial appeal process. At this stage of the project independent opinion surveys commissioned by WSL show that the majority of the population oppose the project, instead preferring further storage.
Neither the hearings process nor the Environment Court hearing, considered regionwide issues relating to alternatives, the drought standard, project timing, staging, or demand management. Legal advice indicated that these issues were not relevant under the Resource Management Act but could be considered by Auckland Territorial Authorities (TLAs).
Watercare proposes to let contracts for the construction of the Waikato Pipeline in October 1999.
It is my considered opinion that the project should not proceed at this time because:
There is no demand management system in operation in the region
Existing waste water treatment facilities are almost at operating capacity
WSL is obligated by law to investigate and implement beneficial reuse, but has not
The region has yet to even partially consider appropriate tariffs
Treated Waikato water carries health risks from catchment pollutants
The 1:200 year drought standard should be reviewed
The structure of the water industry in Auckland, New Zealand, includes a publicly owned bulk water and waste water services provider - Watercare Services Ltd (WSL) - and seven District and City Councils which bulk buy these services, are responsible for local reticulation, and sell the services to ratepayers within their boundaries. WSL owns and operates several dams, a water treatment plant, the Mangere waste water treatment plant, and the water and sewer mains which connect to the local infrastructure owned and operated by Councils.
Watercare is set up as a LATE - a Local Authority Trading Enterprise. Its purpose is defined in statutue to act "commercially, in the best interests of the citizens of Auckland". Watercare has a Board of Directors who are accountable through a "Statement of Corporate Intent" to its owners - who are the same Councils it sells its monopoly services to.
For the past few years Watercare has developed a very independent management style, and has consistently maintained an arms length relationship with its owners. This has not always led to easy working relationships, and some of Watercare's actions have been controversial.
Following the water shortage of 1994, and the decision by Auckland region councils to agree to Watercare Services 1995 recommendation to increase the water supply drought standard from a 1 in 50 year drought standard to a 1 in 200 year drought standard, Watercare Services Ltd (WSL) commenced its Long Term Future Water Source investigation.
WSL have advised that a Long Term Future Water Source is needed to:
Meet the needs of future population growth
These criteria narrowed the choice from more than 90 options, down to just a few including several Waikato Pipeline alternatives and the Riverhead Ararimu dam alternative.
The long term filter ruled out relatively cheap augmentation options such as the Wairoa River take and lower Mangatawhiri dam, because they could not deliver such large volumes. However both of these options were either within or very close to existing dams and catchments, and could be developed relatively cheaply.
Further analysis by consultants, including that the source deliver treated water for less than 50 cents/cubic metre, indicated to WSL that a pipeline to the Waikato River best met the objectives investigated.
Through 1997 and 1998 resource consent hearings were conducted by Environment Waikato and the Auckland Regional Council. Waitakere City Council strongly objected to the project. It was very critical of WSL's water demand forecasts, and raised concerns about the absence of an effective demand management strategy. Waitakere City Council advocated water minimisation strategies similar to those now being considered by North Shore City Council.
The regional councils granted the necessary consents, however they were appealed to the Environment Court by various parties including Waitakere City Council. In fact Waitakere City Council withdrew its appeal before the hearing. Publicity at the time indicated that WSL would use its best endeavours to ensure that West Aucklanders never drank water sourced from the Waikato river.
In 1998 Watercare obtained the necessary resource consents for the project.
Neither the hearings process nor the Environment Court hearing, considered regionwide issues relating to incremental alternatives, the drought standard, project timing, staging, or demand management.
2. Incremental Development & Economic
The high cost of capital today is one of the major differences since the last harbour crossing was built and since much of Auckland's existing water and waste water infrastructure was established. So what does the cost of capital mean for infrastructure projects today?
The telecommunications industry is an
because its networks have undergone the sort of technological
which are beginning to happen in New Zealand water and transport
fees and charges to recoup capital and costs
the lifetime of the service
market size and revenue forecasts
opportunities for incremental development
The first is that any business case must be
for "the lifetime
of the service". Recent and rapid developments in telecommunications
have well and truly broken the traditional telephone industry based on
copper wires. Even such technologies as fax machines that have been
quite recently are on the way out now because of email.
My second point relates to opportunities for
development. There is considerable financial benefit in incremental or
staged construction and meeting demands as they actually occur. It
new services are brought on stream in parts, where each increment is
operational, generating a return and providing a service. It means
stages can operate, even if the full implementation needs to be halted
because unexpected developments cause a rethink. In my view estimating
water demands 7 to 10 years ahead and building for those needs is
15 years ahead is a guess and anything from 25 to 50 years ahead is an
To add insult to injury, the particular
of the Waikato Pipeline require it to operate at 10-25% capacity all
time - even if the existing dams are full - imposting further
operating costs on the region. The public will not take kindly to
water from the dams, in order to take water from a significantly more
I believe the 25 year project lifetime assumption is flawed because of the faith it puts in large scale long-term engineering, because it did not anticipate the amount of technological change apparent in the water industry now and which we can all benefit from, and because it did not have regard to the avoidable economic impacts on ratepayers of long term capital loans.
3. Give Demand Management a chance to work
So what's the problem? The message in
is that the more water consumed, the cheaper it becomes - exactly the
of the water efficiency and environmental objectives behind demand
strategies adopted in other Western countries. For example the Sydney
Corporation is required by the terms of its licence to "give equal
to demand side management as the basis for planning the future
of water..." and to reduce per capita consumption of water by "at least
35% between 1990 and 2010".
The first drop of water from the Waikato
be available from that project after around $100,000,000 is spent.
In my view Watercare is not entirely to blame
situation. Watercare is a LATE (Local Authority Trading Enterprise) and
LATEs are required by law "to act commercially".The various Local
Acts are silent about efficient water use, as is the Resource
Act. There is no requirement for Watercare to adopt a demand management
Even without water reform Auckland Councils
could be doing more now to implement demand management strategies.
can charge customers for water using fixed charges (for maintenance of
the meter), and variable volume charges. Varying rates per cubic metre
are possible, enabling large users - for example homes with swimming
- to be charged more per cubic metre for extra water used.
All local government bodies need to be required to adopt water demand management strategies with specific water consumption reduction targets. Such strategies would "identify conservation measures currently adopted and being practised... describe plans for water reclamation and incentives to alter water use practices... evaluate these plans in terms of their cost and contrast with the cost of expanding water storages..." (From Sydney Water licence).
Councils need to be enabled to charge for waste water on a usage basis without having to go to the expense of establishing a LATE. And New Zealand's LATE legislation needs to be broadened to require accountability across commercial, natural resource sustainability, and consumer priorities. Despite Sydney's cryptosporidium outbreak, we can learn from the example of Sydney Water Corporation's principal objectives which were enacted to be "of equal importance". These include to "be a successful business...", "conduct its operations in compliance with the principles of ecologically sustainable development...", and "protect public health by supplying safe drinking water..."
4. Beneficial Reuse - Give it a go
However the largest city - Auckland - has yet to adopt the technology.
North Shore - which houses 20% of Auckland's population of 1,000,000, has conducted studies which show that almost a third of its treated effluent could be used in the summer months to irrigate local parks, golf courses and motorway berms. This would be at a time of year - low rainfall in summer - when it is most useful to conserve the resources stored in lakes and reservoirs.
Interestingly, the local Maori people have been most responsible for bringing beneficial reuse to New Zealand. It is their cultural view that sewage effluent should be passed through land and soil before being admitted to natural waters and seawater. Irrigation achieves this objective. Local maori become very involved in the permitting process for the large Mangere wastewater treatment plant which discharges into inshore marine waters. Maori argued that Watercare should be investigating benefical reuse as a means of reducing discharge volumes. In fact the permit to discharge imposes duties on Watercare to fully investigate this technology's feasibility. As yet Watercare have not - preferring instead to push ahead with the Waikato Pipeline.
5. Paying for new infrastructure needed for
Several City Councils in the Auckland region have been criticised because the cost of infrastructure needed for new subdivisions and infill housing is largely being met by established ratepayers. They argue they have already paid once for roads, water and sewage systems when they bought their home. They are prepared to pay for maintenance and to meet new standards imposed by environmental law, but quite reasonably object to paying for someone else's infrastructure.
The North Shore City Council has recognised these concerns and updated its asset management plans to the point where a "fair and reasonable" sewage treatment development levy of $1,320 will now be charged on every new property. This levy is a new property owner's marginal contribution to the cost of expanding the local sewage treatment plant. Further levies are being prepared for water, stormwater and sewage network services.
Several major water and wastewater projects are on the regional drawing board including the Waikato Pipeline (estimated all up cost: $155 million and designed to service the water needs of around 100,000 new households), and Project West sewage treatment plant (proposed budget: $40 million for wastewater needs of around 10,000 new households). These figures suggest potential regional development levies of $1,500 for water and $4,000 for wastewater services.
Regional development levies of this type could be an appropriate way of allocating the capital costs of such projects. Simply increasing water and waste water charges uniformly to cover increased loan costs would be unfair. What telecommunications company would stay in business if it made existing users pay for other customers to get connected?
The Waikato river catchment is home to some
cows and other farm animals. Its banks are home to several large towns
and the city of Hamilton - all of which discharge their treated sewage
effluent into the Waikato River.
The public aversion to the prospect of
to their supply, no matter how well treated, is a major reason people
opposed to the Waikato Pipeline. The "yuk" factor is very real.
combined with the health risks involved based on the uncertainties of
the known pathogens and the many emerging pathogens plus the
about the ingestion of trace organics, especially by pregnant women,
to cast public doubt on the project.
Watercare has not demonstrated that the technology will be capable of eliminating these additional risks, which need not be taken in the first place.
7. Lessons to be learned
The cost of associated waste water treatment plants - to handle the additional wastewater that will be produced as a consequence of bringing in new water from the Waikato River - has yet to be considered by the community.
I am hopeful - whatever happens - that a
of the whole water cycle will emerge from this process, and an
that an appropriate demand management strategy is essential for the
for the environment and for future generations.