Manukau Water Steps Out
04 July 2006
Manukau Water Steps Out
Manukau Water Limited took its first steps as the city’s stand-alone manager and operator of the city’s water and wastewater services and assets this week.
On Friday afternoon (30 June) Manukau Mayor Sir Barry Curtis and Manukau Water Limited chairman James Hill signed the documents that formally sealed the company’s future as a Council Controlled Organisation.
Ownership of the water and wastewater assets were transferred to Manukau Water Limited today in the Agreement for the Transfer of Ownership of Assets. However, the council still retains ultimate ownership through its 100 percent shareholding.
Manukau Water Limited will operate under a Statement of Intent and Constitution, approved by Council in April, which details the activities and intentions of Manukau Water Limited for next year. It also allows Manukau City Council to influence the direction of the organisation and to hold the directors accountable for the performance of the organisation.
Sir Barry says Manukau Water Limited has been established with a financial structure that requires Manukau Water to perform well.
“However,” Sir Barry says, “we have also made sure the company will have operating cash flows sufficient for it to run effectively and maintain and replace its assets as required.
“The company will pay rates in the same way as other utilities and this, together with additional benefits from forming the company, has contributed to Manukau City’s projected rate increases being amongst the lowest in the Auckland region.”
Mr Hill says that performance targets have been set in key areas and the Manukau Water team is highly motivated and looking forward to meeting the challenge, which includes the company taking on some demanding targets.
“Our assets have recently been revalued and the additional depreciation charges on the revalued assets to establish the transfer price will result in a ‘paper’ loss in the first few years. However, our forecasts show that we will have adequate cash flows and funding facilities from day one.”
Sir Barry says establishing Manukau Water Limited will deliver further benefits for ratepayers while retaining a social focus.
“The change to a Council Owned Organisation ensures full ownership and control of assets stays with Council. As well, Council will continue to approve how water and wastewater tariffs to consumers are set,” Sir Barry says.
Manukau Water Limited has an independent board of directors reporting to the Council, its own balance sheet and a financial structure appropriate for a utility company.
Manukau Water serves about 315,000 people living in an area covering 552 square kilometres and has infrastructural assets of almost a billion dollars and an annual turnover of nearly $85 million.
Manukau Water Limited Board of Directors
James Hill (Chairman)