[This is based on John McDonald’s main feedback prepared for the IAWAI Water Services Strategy, feedback closes on 6 April 2026]
Page 6 of IAWAI’s “summary of our Water Services Strategy 2026–2036” sets out the background for the situation.
“Over the past 10–20 years, it’s become clear that New Zealand faces serious challenges with water infrastructure. Decades of under-investment have led to failures in some parts of the country, putting people and the environment at risk.
The cost of fixing these problems has also continued to rise, placing huge pressure on ratepayers, who have carried most of the burden.
Ratepayers have paid more than their fair share to support growth, but in some areas it hasn’t been enough. Councils, which were previously responsible for water infrastructure, haven’t been able to build what was needed fast enough. In many cases this was because communities simply couldn’t afford it, or there wasn’t enough contracting capacity to do the work.”
In general, I agree with most of that assessment of the situation. However, the situation raises serious questions about the quality of management and governance of water infrastructure over the decades. Considerable amounts of money have been spent on mayors, councilors, executives, managers, contractors, and consultants who specifically had responsibility for the stewardship of water infrastructure.
Is it fair for current and future generations to shoulder the financial burden for those decades of neglect and failures in the past?
What steps are being put in place to stop further poor stewardship, wasteful spending, and badly-prioritised investment decisions?
On page 6 of IAWAI’s Water Services Strategy summary document the new organisation self-identifies as the following, making bold claims about its current role:
“IAWAI is a publicly-owned water company formed by Waikato District Council and Hamilton City Council. We plan, build, manage and maintain drinking water and wastewater services for communities across Hamilton City and the Waikato District. We also manage stormwater for both Councils.”
Page 15 of the IAWAI Flowing Waters Water Services Strategy (Te Rautaki Raatonga Wai) 2026–2036 states:
“By using existing council systems, offices and people, and partnering with other water organisations (including Tauranga City Council and Western Bay of Plenty District Council) to share systems, technology and expertise, IAWAI can reduce duplication, control costs and deliver better long-term outcomes.”
That passage undermines the need for the creation of IAWAI. It is obviously possible for water divisions from nearby councils to cooperate without expensive and complicated mergers into new water CCOs. We could cancel the creation of IAWAI and achieve equivalent expertise sharing and cost-effectiveness gains through collaborations with other councils.
The IAWAI Water Services Strategy documents do not clearly state the extra cost of setting up IAWAI with new systems, merger expenses, rebranding, extra governance, and additional layers of management beyond the stand‐alone council model.
I note (for example) that in November 2025 a “Maaori Partnerships, Communications & Engagement Executive” role at IAWAI was advertised with a salary starting at over $200,000. As far as I am aware both HCC and WDC already have individuals in similar roles.
Is this new executive role necessary or could it have been covered by reassigning existing staff already employed by the current councils?
Increasing debt levels and amassing large amounts of intergenerational debt is a key feature of the IAWAI strategy as articulated on page 25 of the IAWAI Strategy summary document:
“It makes sense that water organisations like IAWAI use long-term debt to help build big infrastructure. It helps spread costs more evenly across the generations that will use the assets. The Government is strongly encouraging this approach and the Commerce Commission is likely to require it.
Our strategy does exactly this.
In addition, IAWAI will deliberately use debt in the early years of its operation to support consumers by smoothing price increases.”
Does that mean future generations will be burdened by large debts, substantial debt repayments, and much higher charges than previous generations?
I find it both troubling and a cruelly ironic that the Commerce Commission has been identified as significant cause of both increased debt and increasing the future costs to consumers.
The full estimated cost of Southern Wastewater Treatment plant (Estimated at ~$200 million or ~$500 million) is not clearly identified in the Strategy. Presumably the “Subregional Wastewater Treatment Plant” on page 54 of the full Strategy is the same “Southern Wastewater Treatment Plant” mentioned in the Strategy summary with the $134.9 million estimated cost.
I note that $5.68 million has been estimated for the Hamilton Wastewater Network Discharge Consent.
Is that over $5 million in physical/ecological engineering upgrades to comply with the consent conditions?
Or are most of those millions going to be spent on legal fees, bureaucratic costs, and ‘paying off’ groups of potential objectors to the consent application.
Page 23 of IAWAI’s Water Services Strategy 2026–2036 summary document, claims the following:
“We’re just getting started, but even under this strategy, the increases in the years ahead remain significantly lower than the stand‐alone council model. That’s the result of deliberate choices and careful financial management.”
Unfortunately the graphs and evidence for this claim is unclear and it is presented in significantly different ways to previous documents about the waters reforms. It does not appear to be a fair comparison between IAWAI and stand‐alone council models.
Issues with the comparisons presented (or not presented) in these new IAWAI Water Services Strategy documents include:
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The graphs on page 23 of Strategy Summary document includes 2030 bars for WSDP and no 2030 bars for WSS. This is a weird choice for presenting data and potentially misleading. Is this a fair comparison?
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The strategy documents have “2026–2036” in their titles, yet the charges-per-median-household projections stop at 2029. Older plans released over the last few years do contain projections for such increases in household charges out to 2034, yet this strategy does not make those projections or compare them to previous projections.
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The graphs on page 23 of IAWAI’s Strategy Summary document have series labels as “WSDP $ (Avg)” and “WSS $ (Med)”. Are these calculated the same way and are they both medians? Is this a fair comparison?
- It is unclear if the graphs on page 23 of IAWAI’s Strategy Summary document are just for potable water and wastewater or also include stormwater costs.
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Why is there no comparison of CAGR values for the current plan to compare to previous plans and business cases?
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Why are median household water cost so much higher in WDC than HCC? Is that partially a result of Watercare being a more expensive operation? Would that indicate that CCOs can be much less efficient when compared to in-house council divisions?
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Are WDC residents getting the better deal from the creation of IAWAI? Does that mean that HCC residents will be cross-subsidising their water infrastructure?
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Affordability benchmarks and “Water services charges as % of median household income” were used in the June 2025 Joint Water Services Delivery Plan. Why are similar parameters not calculated and discussed in these 2026 strategy documents?
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On page 23 of IAWAI’s Strategy Summary document ,there is a reference to volumetric charging bringing down the previously forecast increases in charges for customers. Is that some sort of euphemism for ‘paying more and getting less’?
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The strategy documents often frame smaller-that-projected increases as decreases. This is both confusing language and potentially misleading marketing. Hamilton residents will face a projected median increase of +70.5% under IAWAI instead of the +91% projected increase by 2029 under the stand-alone council model presented in these strategy documents. Using such percentage increases would clearly indicate the magnitude of the projected increases under both models. Presumably this would be more alarming to the public than claims in the Water Services Strategy summary of “a decrease for the median residential household of $91 for Hamilton residents”.
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By my quick calculations, the increases for Hamilton residents presented in the 2026 strategy documents are higher than those presented in the Local Water Done Well Business Case FINAL December 2024 document. Have the projections for the stand-alone council model been changed and are the changes making IAWAI look better in comparison?
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IAWAI is presented in the strategy documents as already achieving cost reductions. However, IAWAI has still not been fully implemented as the water provider. The cost-reductions are not real… they are a case of a projection versus an alternative projection.
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The installation of residential water meters in Hamilton is mentioned a few times in the IAWAI strategy documents, however no clear details are given about the estimated cost of installing and maintaining these water meters. The strategy documents mix the estimated water meter costs for WDC and HCC together. This reflects one of the fundamental problems with the IAWAI joint-CCO model; important and detailed information which could inform local political decisions will be lost within the slick communications outputs of a larger corporate entity.
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Further reading on this issue:
Consultation closes 06 April 2026: Hamilton City Council’s (IAWAI) Water Services Strategy
Household Water Costs in Hamilton City Projected to Triple within 9-years under New Water Company
OPINION: Is Removing Water Services from Rates an Existential Threat to Councils?
OPINION: Serious Mismanagement and Lack of Accountability with Water Services
