Changes to Three Waters announced yesterday (Thursday April 13) see the number of entities controlling water infrastructure lifted from four to ten; a name change to ‘More Affordable Water Reforms’; and an extension of two years to the handover process.

There are no changes to 50/50 co-governance with iwi, but there would be Central Otago representation in the new Otago Southland Regional Group.

Central Otago District mayor Tim Cadogan said he “can’t get terribly excited about the changes”. 

“What we’ve gained is a guaranteed seat on the regional representative group, which sounds good, but the regional representative group actually has little influence over the board, in my view.

“The boards will actually be the drivers of how these regional entities operate.”

He thinks there will still be financial advantages in the changes to the overall cost of what gets done, “but it’s not going to be as great as it would have been”. 

Initially, a primary reason for the reforms was to put all assets and liabilities for water infrastructure into four entities to create better economies of scale when raising capital. 

With the number of entities increased, those economies of scale will shrink significantly, meaning ratepayers pay more for water services long-term. 

“So we’ve got a little bit more influence for a significant reduction in the supposed financial benefits. 

“So for me, it’s not that exciting a trade-off,” Tim said.

Tim believes the change that will have the most impact is extending the transition date of council assets and liabilities to the ten entities. 

The asset/debt handover that was to happen on July 1, 2024 will now take place on July 1, 2026.

“We now have to work out how we’ll keep doing work that’s in our planning when everything we planned for would be off our books in just over a year. It’s now in just over two and a bit years.” 

But Tim says Central Otago is in a far better position than many councils, “councils who are absolutely maxed out in their debt and were living on life support until the three waters debt got taken off them, now they have to wait”. 

“And, of course, we’ve got an election coming up which could change everything,” he said.