Decision 1 - Increasing investment to fix the water pipes

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Consultation has concluded

The age of our pipes, and a series of recent high profile pipe failures - particularly in the wastewater network - has put the condition of the network in the public spotlight.

For a long time, the Wellington region's three waters network has only had low funding. Wellington Water have recommended to its client councils that an increase in funding is needed over several years.

What's the background to this decision?

The three waters network means our drinking water, wastewater and stormwater infrastructure including:

  • 2653km of pipes
  • 193 pump stations
  • 3 treatment stations
  • 65 reservoirs

The network replacement cost is about $3.9 billion. The Council owns the city's water infrastructure, and Wellington Water Limited (owned by the region's Councils) manages the network and is responsible for providing clean, safe drinking water and efficient wastewater and storm water services.

We know we have some big problems with our very old pipes. We can’t fix our water infrastructure all at once and it’s very expensive. So we need to focus on the most critical parts and main trouble spots first.

The 2020 Mayoral Taskforce on three waters investigated the condition, funding, and management of the network and made recommendations for improvement. The Taskforce's 48 recommendations included accelerating the renewals of old drinking and wastewater pipes, valves and pumps, carbon management, and funding.

The ability of the local contractor market to deliver the work is a concern. Wellington Water is increasing its ability to do things smarter. If the improvement programme can't be delivered as planned, the Council will prioritise renewals work to prevent pipes failure, review the planned upgrade work programme and see if some work can be delayed.

There are three options

Option 1:
Maintain Current Funding Level

Option 2:
Enhanced Investment (preferred)

Option 3:
Accelerated Investment
Option one is continuing the existing level of funding for three waters renewals. With no new investment the Council expects an increasing number of leaks, burst pipes, and more water lost.

There are risks with this option such as:
  • lower in service levels from Wellington Water (dealing with more leaks) and;
  • we won't know significantly more our about the condition of the pipes e.g. which ones might fail
Not getting ahead of replacement of some vulnerable pipes may results in the need to construct more water storage (could cost hundreds of millions).

We don't believe this is what most Wellingtonians want

This option has a substantial increase in the level of three waters investment - well above the last 10-year Plan.

The investment includes:
  • funding to complete Omāroro reservoir
  • improving our knowledge of the condition of pipes to improve the timing of pipe renewals; and
  • an extensive programme of pipe replacements.
We think this will help reduce the recent trend of unpredictable leaks and burst pipes.

However, we do not think this option will fix all of our network problems over night.

The risk is that some Wellington Water service levels may continue to decrease and therefore increase operating costs

Option 3 is a substantial increase in investment over Option 2.

The aim is to significantly speed up:
  • all work programmes across the network
  • investigations into the pipes condition
  • a big pipe replacement programme (more than Option two); and
  • better understand the carbon footprint of the network.
However option three is not our preferred option because:
  • we don't know enough about the condition of pipes to properly cost and direct the investment; and
  • there is significant uncertainty regarding the ability to deliver a large programme of work
Option cost and how much debt?
$552m over 10 years

Option cost and how much debt?
$678m over 10 years

Option cost and how much debt?
$1.5b over 10 years
Rates change:
No impact

Rates change:
2.51% 3 year average increase

Rates change:
5.85% 3 year average increase


These options have pros and cons and implications for drinking, waste and stormwater which are outlined in more detail here

Our preferred option

The Council prefers Option 2: Enhanced Investment which focuses on improving the condition and reliability of the network in an affordable and sustainable way. This option includes funding for wastewater laterals (see Decision 2) but does not include the cost of sludge minimisation (Decision 7) that is proposed to be funded externally (not by the Council).

Note: Our external Auditors have made specific comment on the three waters decision in their opinion in the consultation document - see pages 72-74 of the consultation document available at the link below.


Want to know more about another Decision? Head back to our Long-term Plan homepage or read our full consultation document

Or, are you ready to have your say? Head to our Long-term Plan online submission form

The age of our pipes, and a series of recent high profile pipe failures - particularly in the wastewater network - has put the condition of the network in the public spotlight.

For a long time, the Wellington region's three waters network has only had low funding. Wellington Water have recommended to its client councils that an increase in funding is needed over several years.

What's the background to this decision?

The three waters network means our drinking water, wastewater and stormwater infrastructure including:

  • 2653km of pipes
  • 193 pump stations
  • 3 treatment stations
  • 65 reservoirs

The network replacement cost is about $3.9 billion. The Council owns the city's water infrastructure, and Wellington Water Limited (owned by the region's Councils) manages the network and is responsible for providing clean, safe drinking water and efficient wastewater and storm water services.

We know we have some big problems with our very old pipes. We can’t fix our water infrastructure all at once and it’s very expensive. So we need to focus on the most critical parts and main trouble spots first.

The 2020 Mayoral Taskforce on three waters investigated the condition, funding, and management of the network and made recommendations for improvement. The Taskforce's 48 recommendations included accelerating the renewals of old drinking and wastewater pipes, valves and pumps, carbon management, and funding.

The ability of the local contractor market to deliver the work is a concern. Wellington Water is increasing its ability to do things smarter. If the improvement programme can't be delivered as planned, the Council will prioritise renewals work to prevent pipes failure, review the planned upgrade work programme and see if some work can be delayed.

There are three options

Option 1:
Maintain Current Funding Level

Option 2:
Enhanced Investment (preferred)

Option 3:
Accelerated Investment
Option one is continuing the existing level of funding for three waters renewals. With no new investment the Council expects an increasing number of leaks, burst pipes, and more water lost.

There are risks with this option such as:
  • lower in service levels from Wellington Water (dealing with more leaks) and;
  • we won't know significantly more our about the condition of the pipes e.g. which ones might fail
Not getting ahead of replacement of some vulnerable pipes may results in the need to construct more water storage (could cost hundreds of millions).

We don't believe this is what most Wellingtonians want

This option has a substantial increase in the level of three waters investment - well above the last 10-year Plan.

The investment includes:
  • funding to complete Omāroro reservoir
  • improving our knowledge of the condition of pipes to improve the timing of pipe renewals; and
  • an extensive programme of pipe replacements.
We think this will help reduce the recent trend of unpredictable leaks and burst pipes.

However, we do not think this option will fix all of our network problems over night.

The risk is that some Wellington Water service levels may continue to decrease and therefore increase operating costs

Option 3 is a substantial increase in investment over Option 2.

The aim is to significantly speed up:
  • all work programmes across the network
  • investigations into the pipes condition
  • a big pipe replacement programme (more than Option two); and
  • better understand the carbon footprint of the network.
However option three is not our preferred option because:
  • we don't know enough about the condition of pipes to properly cost and direct the investment; and
  • there is significant uncertainty regarding the ability to deliver a large programme of work
Option cost and how much debt?
$552m over 10 years

Option cost and how much debt?
$678m over 10 years

Option cost and how much debt?
$1.5b over 10 years
Rates change:
No impact

Rates change:
2.51% 3 year average increase

Rates change:
5.85% 3 year average increase


These options have pros and cons and implications for drinking, waste and stormwater which are outlined in more detail here

Our preferred option

The Council prefers Option 2: Enhanced Investment which focuses on improving the condition and reliability of the network in an affordable and sustainable way. This option includes funding for wastewater laterals (see Decision 2) but does not include the cost of sludge minimisation (Decision 7) that is proposed to be funded externally (not by the Council).

Note: Our external Auditors have made specific comment on the three waters decision in their opinion in the consultation document - see pages 72-74 of the consultation document available at the link below.


Want to know more about another Decision? Head back to our Long-term Plan homepage or read our full consultation document

Or, are you ready to have your say? Head to our Long-term Plan online submission form

CLOSED: This discussion has concluded.

Do you have a questions about fixing the pipes?

Check the FAQ's above on the right of this page as well as other questions below - your question may already have an answer.

Please be concise and respectful in asking questions - we will do our best to respond promptly usually by the next working day). Some answers may take a bit longer to get the details right. We monitor the site from 8:30am - 5pm Monday to Friday

  • Share on Facebook Share on Twitter Share on Linkedin Email this link

    Has consideration been given to the central government announcement that water services would be managed by amalgamated authorities going forward, as opposed to the scheme in place now? How is that factored in Decisions 1 and 2?

    Brendan. asked 7 months ago

    Hi Brendan, 

    Here is an answer from our water team. 

    We expect the Government to make announcements about the water reforms in May or June.  There will need to be transition arrangements as assets are transferred to the new water entities, and we are thinking through this now.  While there will be a loss of autonomy for the Council, public ownership remains a bottom line for the Government.

    Nga mihi

    Amy

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    You state in option 1 you may need to construct more water storage facilities and you present this as a negative but it is a positive because of the real earthquake risk for Wellington. Pipes are likely to be ruined in the event of an earthquake. Why isn't this option more talked about? In most local body elections I have heard aspiring politicians, usually conservative, talking about a focus on pipes and the basics, and not spend on the wasteful dreams of more liberal minds. Turns out they never did spend on it on pipes. (perhaps they spent it on reducing rates for businesses and creating business friendly social 'events'?) It seems to fix the the pipes, the root problem is being able to hold politicians to account for what they promise. What is being done to fix this problem? i.e. There is a serious constitutional and accountability problem in local body politics. p.s. There is little point in voting for option 2 or 3 of your proposal because this has been done before and politicians have not followed it.

    Stephen Minto asked 7 months ago

    Kia ora Stephen, 

    Thank you for the comments.  


    The City’s infrastructure vulnerability to an earthquake is understood, and key investment requirements have been published. By and large, most infrastructure owners are on track with resilience investments.  It is a very expensive business that cannot be fixed overnight.  Progress is slow, but it is progress. https://www.wremo.nz/assets/Uploads/191111-Wellington-Lifelines-PBC-MAIN-20191009.pdf  

     

    You may also be interested in this initiative. https://www.dia.govt.nz/Three-Waters-Reform-Programme


    Nga mihi

    Amy

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    Have you considered bringing in water meters so that people pay for the water they use? Many councils in NZ are doing this already or introducing this function. It has been proven many times to help find and eliminate leaks and to reduce water consumption. I'm surprised that this isn't included in any of your options.

    AndrewM asked 7 months ago

    Hi Andrew, 

    Here is the answer from our water team.

    The Council’s thinking on water meters is outlined on page 8 of these minutes. Minutes of Strategy and Policy Committee - Thursday, 11 March 2021 (wellington.govt.nz)


    Nga mihi

    Amy

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    Anyway to involve other companies, to help improve and streamline the process for the underground pipe upgrades? Maybe involve the government on looking into helping out with the investigation of all of the pipes via CCTV companies? This could be done at night, to reduce impact to traffic and people in the region. I'm thinking that with a possibility of a big quake happening, Wellington needs to act now, as to avoid the costly and painful rebuild, as what was witnessed by myself and other people in Christchurch, after the earthquakes. It also acts to ensure to the people and businesses that Wellington is able to operate after a large natural disaster, and may put insurance companies at ease, as due to vastly improved underground infrastructure.

    ALofPalmyviaNewtown81 asked 7 months ago

    Kia ora ALofPalmyviaNewtown81, 

    Here is the answer from our water team. 

    Thanks for the question.  Wellington Water itself uses private companies to undertake asset inspections, and currently has a contractor investigating the very high criticality assets in the City.  This is expected to be concluded in August. 

    The City’s policy is to replace older pipes with HDPE which is more seismically resistant.  While this has been underway for some time now, options 2 and 3 will see this accelerated.

    Nga mihi 

    Amy

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    Over the last 5 years how much proposed funding planed in the Long Term Plan for "pipes" has been under spent or diverted onto other categories

    Gerald Sutton asked 8 months ago

    Kia ora Gerald,

    Here is the answer from our water team. 

    Last year the Mayoral Taskforce found that water revenue was not clearly accounted for and is aggregated with other Council activities. While depreciation of the assets is fully funded and collected each year in the water rates, in reality waters renewals expenditure is typically 50-60% (typically $10m-$20m per annum) of the depreciation income.  The balance was invested in non-water capital projects.

    Nga mihi
    Amy

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    When does the Wellington City Council expect to have clarity/reports around the extent of the "pipes" problem and what are the costs and timeline to resolve the maintenance of the "pipes"

    Gerald Sutton asked 8 months ago

    Kia ora Gerald, 

    Here is the answer from the water team. 

    WWL is currently conducting inspections of very high critical assets and expects to report back in August of this year.  Following that WWL will implement an ongoing and concerted programme of asset inspections to drive the investment programme.  We anticipate that this will be ongoing.

    Nga mihi

    Amy

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    It says there are , 2653km of pipes, and 193 pump stations. For each of the 3 options above how many km pf pipe and how many pump stations will be replaced each year? Allowing a 75 year life for pipes and pump stations (very generous) we should be replacing a minimum of 36 km of pipes and 3 pump stations a year.

    DeLorenzo asked 8 months ago

    Kia ora DeLorenzo, 

    Here is the answer from our water team.

    We know it should seem simple but unfortunately water asset replacement is a little more complex than that.  While cast iron pipes can and do last 100 years and sometimes more, over the years we have used many different types of pipes.  Ceramic sewage pipes are particularly susceptible to earthquakes, even small shakes, and the asbestos cement pipes laid for drinking water in the 1950s and 60s during the post war building boom are failing at just 60-70 years.  Today we generally use HDPE pipes that we expect to last 100 years.  Also, some pipes are critical to the functioning of the City, and others are not, we don’t treat every pipe the same.

    Nga mihi

    Amy

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    The water cost is included in all the ratespayers's bill. My question is where the money has been used. Comparing the rates to other cities, the rates in Wellington is pretty high. Yes, it includes the water usage. Now the council just tell the ratespayers that the pipes are too old and never been fixed. So my question is where the money has been used for.

    ratesrates asked 8 months ago

    Kia ora ratesrates, 

    Here is the answer from the water team.

    Rates collected for funding depreciation of three waters assets have been used to pay back debt, which was then invested in non-water capital projects.  This was acknowledged in the report of the Mayoral Taskforce.   It wasn’t specifically directed at any particular non-water projects, but the typical investments in the last Long Term Plan included  initiatives such as housing and cycling and other investments. You can view the details of the last LTP here: https://10yearplan.wellington.govt.nz/assets/Uploads/40dc2ee660/FINAL-MASTER-consultation-document.pdf


    Nga mihi,

    Amy

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    Why dont the options include using debt ti fund the work?

    Tim Allen asked 7 months ago

    Kia ora Tim, 

    Sorry for the delay in getting a response. Here is an answer from our Finance team. 

    Wellington City Council generally funds capital investment including three waters from debt.  On page 17 of the consultation document you can see that the Council has debt limits and that we are proposing to allow a breach of those limits in years 1-3 to allow the library to be rebuilt. 

    Nga mihi

    Amy

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    We've come a long way from when these waterways were designed. Have we considered a complete overhaul and options for self sufficiency where possible?

    Bhaskar asked 7 months ago

    Kia ora Bhaskar, 

    Sorry for the delay in getting a response. Below is an answer from Wellington Water. 

    The replacement cost of the network is around $4bn.  We don’t think that complete replacement is affordable or necessary, and that a risk based approach based on the condition of assets is more prudent.  Options 2 and 3 are both based on this approach.

    While it might seem attractive, long term self-sufficiency for drinking water and especially wastewater comes with some public health risk.  We don’t feel that Wellington is prepared to take that risk, although to be fair in the event of an earthquake we will need everyone to be self sufficient for at least seven days.  Our planning staff are currently considering stormwater management as part of a review of the District Plan, and there are opportunities for better on-property management of stormwater. 

    Nga mihi

    Amy