Wellington Water given ‘open cheque book’ with no accountability


An independent review into Wellington Water, the company which manages water assets on behalf of five of the Region’s councils, has identified several opportunities to improve its performance

Carried out by FieldForce4, the independent review was initiated by a resolution of Wellington City Council’s Long-term Plan Finance and Performance Committee. Agreement was reached to increase operating expense funding to Wellington Water by $2.3 million, contingent on the conducting a review of the company to enhance efficiency, identify cost savings, and improve transparency and reporting.

In its summary to elected members, FieldForce4 says there is insufficient contractual accountability assigned to Wellington Water from Wellington City Council.

“There is a lack of clarity on roles and responsibilities between the parties. Wellington Water views their role as a trusted advisor while Wellington City Council view Wellington Water’s role as an accountable contracted service provider.

“Without contractually clear accountability and performance measures, Wellington City Council has effectively given Wellington Water an open cheque book without the ability to manage the quality and efficiency of the services delivered, while all the risk and performance accountability sits with Wellington City Council,” FieldForce4 says.

In its report, FieldForce4 found that maintenance costs had increased by 71% over the last three years. It also found that the level of reporting from Wellington Water was not sufficient for a water utility of its size.

The review also suggested that efficiencies could be found if there was more focus placed on performance measures and cost targets.

The report findings included suboptimal contract management between Wellington Water and its contractors, failure to ensure the performance and financial risk is proportionately shared between Wellington City Council, Wellington Water and contractors, and found that the Wellington Water reporting to the City Council fails to accurately capture and link network performance to the physical work programme and associated budgets.

The recommendations include adding commercial service delivery performance indicators (KPIs) to the Management Service Agreement (between the council and Wellington Water) and the Alliance Agreement (between Wellington Water and contractor Fulton Hogan).

Wellington City Council Chief Executive Barbara McKerrow says the City Council accepts the recommendations from the report.

“With increasing service delivery costs resulting in a growing backlog of leaks, it’s important that we support Wellington Water to find efficiencies.

“Wellington City Council commissioned the review by consultants FieldForce4 who were engaged for their extensive global water utility and commercial experience.”

Wellington Mayor Tory Whanau believes these recommendations could help improve the performance of the water network in Wellington.

“It’s essential that we ensure Wellington ratepayers’ money is going towards actually getting pipes fixed. We put a significant amount of funding into our water infrastructure, and as Mayor I want to be sure this is going exactly where it should be.

“We look forward to working with other shareholding Councils, mana whenua and Wellington Water to implement as many of these findings as possible for the benefit of our water network. Some of these changes will require time and be worked on as part of a new regional model for water delivery.”

Water infrastructure is a priority for Tory in the city’s upcoming Long Term Plan, she says.

“At my urging, officers have put forward a recommendation to fund our three waters (drinking, waste and storm water) by $1.1 billion, compared to $678 million in the 2021-2031 plan. This is a 65% increase and includes rolling out water meters as early as possible.”