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Price of water to be lowered

Price of water to be lowered and council to receive $5 million charitable payment

Auckland City Council’s Finance and Corporate Business Committee will next week discuss a proposal outlined in Metrowater’s Statement of Corporate Intent and Business Plan that will see the amount paid by consumers for their water reduced by 10 per cent, provided they pay their account promptly.

The proposal includes : holding the cost of the city’s water and wastewater for the second year running but providing a significant 10 per cent discount to customers who pay their account promptly making a charitable payment of $5 million to Auckland City as a contribution to activities such as investment in stormwater projects and similar areas approving the introduction of the previously announced network upgrade charge limiting any price increase for the next two financial years to no more than the rate of inflation.

Metrowater is a council controlled organisation (CCO). It is fully owned by the council and provides quality water and wastewater services for Auckland city.

The chairperson of the committee, Councillor Douglas Armstrong, says he is delighted with Metrowater’s sound financial position and he welcomes the proposals that will considerably benefit consumers.

“The 10 per cent discount, which will be introduced later this year, will benefit customers because in effect it will lower prices.”

The council set Metrowater up as a charitable company. Metrowater must therefore transfer all profits not reinvested in the business to Auckland City by charitable payments. To date, all profits have been reinvested into the business.

“The council needs to undertake significant investment in its stormwater network and other environmental activities, such as flood prevention. Metrowater’s $5 million payment will greatly assist the council to do this. I welcome it and I hope the payment can be repeated in the future.

“The network upgrade charge is both fair and sensible. It will ensure the costs that growth in demand from new connections imposes on the water and waste water network are met by developers not all Auckland City residents,” Councillor Armstrong says.

Metrowater chairperson Michael Stiassny says that as part of Metrowater's customer service focus the company has made a commitment to ensuring a fair and equitable tariff structure.

"Metrowater is managing assets better and focussing on understanding what customers want, which makes a smarter business. By improving efficiencies at Metrowater we have been able to absorb any increase in costs to us in recent years. This means the benefits can be passed on to Auckland City residents and business owners," Mr Stiassny says.

"Taking the 10 per cent prompt payment discount into account Metrowater's standard water charge for an average family water usage has decreased by 4.8 per cent since the 2000 financial year," the Metrowater chairperson added.

Auckland City Council’s Deputy Mayor, David Hay, also welcomes the Metrowater decision saying it vindicates the council’s decision in 1997 to establish Metrowater as a company to provide the city with water and waste water services.

“Establishing Metrowater has resulted in efficiency gains, a dedicated and expert board focussed on water and waste water services, and prices that have been held since July 2001. With this announcement Metrowater has confirmed itself to be a responsible company which acts in the best interests of the city and its ratepayers,” the Deputy Mayor says.

Councillor Armstrong says he expects the proposal, outlined in committee papers released today, to be approved by the Committee on 29 May 2003.

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