Auckland mayoral candidate John Tamihere calls for the sale of 49% of Watercare with the money raised used to clean up the city's beaches

Auckland mayoral candidate John Tamihere is calling for the sale of 49% of Watercare, Auckland's water supplier.

He says Auckland Council could sell the stake to the Accident Compensation Corporation or the New Zealand Superannuation Fund, with the money raised used to clean up the city's beaches, which Tamihere argues Mayor Phil Goff and the council have neglected for too long.

Watercare is 100% owned by Auckland Council and operates as a Council Controlled Organisation (CCO).

“Releasing the value of 49% of the Watercare balance sheet means Auckland citizens won’t have to stump up for the huge bills that are coming our way – like it or not – to update Auckland’s water infrastructure,” Tamihere says.

“The only way we are going to get clean beaches and waterways is to invest in the infrastructure to stop run-off getting into the waterways. There’s no point in having an ambulance at the bottom of the cliff, we need to prevent the waste from getting there in the first place.

“Goff should come clean on how he plans to fund the Watercare investment the city needs. He has to stop this outdated thinking that you can keep gouging the ratepayer.”

Tamihere says he will be releasing his full policy on water infrastructure and management over the coming weeks and says Aucklanders need to be told the truth on how the city’s ageing water infrastructure is going to be upgraded.

“We can’t put our heads in the sand any longer. We have NZ institutions such as the Superfund and ACC screaming out to invest in Auckland infrastructure and Goff won’t allow it to happen. It’s time to reduce the burden on ratepayers and use the city’s substantial asset portfolio to work for ratepayers, not the other way around,” he says.

But Goff isn’t impressed and says selling 49% of Watercare would force up water rates and burden lower income families with higher costs. 

“Privatising Watercare, whose assets are valued at around $10 billion, would force up the cost of water rates with any investor seeking a 7% to 10% return on their investment,” he says.

Goff says Watercare, which is effectively a monopoly in the region, doesn’t pay a dividend to the council and is legally required to provide water at the lowest reasonable price.

“Pushing up water rates would hurt families that use more water and place a heavy burden on those on low incomes,” he says.

Goff says partly privatising Watercare would make it less accountable to the people of Auckland which contradicts Tamihere’s previous calls for greater council control of its CCOs.

“Watercare is a well-run organisation which provides an essential commodity efficiently and at a relatively low cost. It doesn’t make sense to mess with its ownership and structure which could put this at risk and cause big rises in water rates.”

In May Tamihere said the Auckland Council should privatise the Ports of Auckland’s business operations to help ease the financial burden faced by the city’s ratepayers. Under his proposal the Super City would still retain ownership of the land the port sits on. The new port owners would have to lease the land back from the council at a “credible commercial rate for up to 25 years”. They would also be expected to develop an agreed exit strategy.

According to Tamihere’s policy proposal, at the end of the lease the site could then be redeveloped for “public and other uses that make the best use of the prime waterfront real estate”. Auckland Council currently has 100% ownership of the Ports of Auckland and it received an annual dividend from its shareholding of $51.1 million in the 2017/18 financial year.

Polling date in the mayoral election is October 12.