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User ownership option for council-owned mixed-use rural supplies

Operators of Council-owned mixed-use rural water schemes can apply to transfer these schemes to private ownership.

While council-owned mixed-use rural water schemes will transfer to the new Water Services Entities in July 2024, the Government has agreed to a recommendation from the Rural Supplies Technical Working Group that users of these schemes may seek to take over ownership and operation of them.

This option will be included in the second Three Waters Bill to be introduced later this year. The Government has agreed that users will be able to seek ownership of a mixed-use scheme on the basis of cost, benefit and risk assessments together with a 75% agreement amongst users.

The Department of Internal Affairs is currently conducting an initial assessment to explore the user-ownership option in the Clutha District. The Department of Internal Affairs will work with the farmer chairs of the Clutha District’s mixed-use rural water supplies and council to assess the benefits, costs and risks of user-ownership versus Water Services Entity ownership and operation.

Morrison Low has been commissioned to do the assessment, overseen by a steering committee made up of farmer, council and DIA representatives. This will include engagement with farmers and users on how best approach a user-owned option.

The results of the assessment will be publicly available, to help inform the decision of whether to seek ownership or become part of a Water Services Entity. It will also be available to inform approaches to similar mixed-use rural suppliers throughout New Zealand.

  • Mixed-use water schemes provide drinking water as well as water for farming-related purposes, such as stock water, irrigation or horticulture. There are around 75,000 privately-owned mixed-use schemes across the country but 75 -100 are owned by local government. Often the operation and management of council-owned mixed-use schemes involves the support and local expertise of the farming communities who receive the supply.

  • The Government recognises that mixed-use rural water supply schemes are different to urban drinking water networks. They primarily supply water for farming and horticulture purposes as well as for drinking.

    The Rural Supplies Technical Working Group heard from users of these schemes that some would be reluctant to have them transfer to the new Water Services Entities. There are concerns about the perceived loss of community voice and local involvement, concerns for future water supply for farming purposes, and uncertainty about the future management of the scheme, including pricing and charging.

  • Regardless of the future ownership and operation model of the schemes (private or Water Services Entity), all schemes will have to comply with Taumata Arowai requirements to demonstrate compliance with drinking water standards.

    Taumata Arowai is developing acceptable solutions for these schemes. More information can be found on their website.

  • Privately-owned water supplies are not covered within the scope of the three waters reform, and the transfer arrangements would only cover rural supplies/schemes that are owned by local government. In some cases, ownership is ambiguous, and would need to be worked through with the respective schemes.