Pumps at Watercare's Onehunga Water Treatment Plant (file image). Photo: Watercare/Supplied
The government has approved a charter for Watercare expected to be $899 million cheaper for Auckland ratepayers than the previous plan.
The charter was developed by the Secretary for Local Government in consultation with Auckland Council and the Commerce Commission as an alternative to Auckland Council's previous draft Long-Term Plan which would have required a 25.8 percent increase to water rates.
"In May, the government addressed Watercare's proposed 25.8 per cent water rate hike by enabling the financial separation of Watercare through our Local Water Done Well plan," Minister for Auckland and Minister of Local Government Simeon Brown said.
"By financially separating Watercare from Auckland Council, Watercare will now become subject to interim economic regulation with the Government putting in place a Watercare Charter for three years prior to the Commerce Commission undertaking full economic regulation from 2028."
Under the new charter, water rates will increase by 7.2 percent each year for the next three years, then by 5.5 percent in 2028 - a cumulative increase of 30 percent compared to 70 percent under the previous plan.
That, according to the government's estimations, was a difference of $899m.
Brown said Watercare would also be granted an average of $1.3 billion each year to maintain and renew Auckland's water infrastructure.
"Infrastructure is vital for our cities to thrive, and because this Government listened and worked with Auckland Council, we delivered a solution that ensures Watercare has the flexibility and revenue certainty to fund future water infrastructure projects," Brown said.
"This approach also frees up Auckland Council's own balance sheet to support it to invest in other critical infrastructure, supporting growth across the city."
The charter will take effect from the 1 April 2025.
