North Shore muddled thinking
20 August, 2004 NEWS RELEASE:
Richard Worth, MP for Epsom
North Shore muddled thinking
North Shore muddled thinking over the future of Auckland water and wastewater company Watercare Services Ltd is coming to the fore in the current local authority election period says Epsom MP Richard Worth.
“Advocacy of Watercare being transferred from territorial authority ownership to the Auckland Regional Council appears based on either North Shore self interest at the expense of the rest of Auckland or an incorrect presentation of the facts.
“Under territorial council ownership Watercare has achieved abolition of the hated sludge ponds at Mangere and associated treated sewage discharge. It has returned about 500 hectares of this land to the harbour. The company also carried through the Waikato River pipeline project on time and within budget to provide security for Auckland’s future water needs, something the ARC was not able to achieve.
“Further, the company has returned this year $15.7million to its customers who are the retail water suppliers and trade waste customers, not, as claimed by North Shore councillor Joel Cayford, to its shareholders.
“It is also pertinent that the North Shore water retail operation received a percentage of this rebate to customers in line with its number of water connections. North Shore City also has an inflated shareholding (15 percent) in the company which came about because total shareholding percentages do not take account of numbers of waste water connections that contribute to the financial success of Watercare. This anomaly arose because North Shore operates its own waste water services.
“Mr Cayford suggests Watercare should borrow $800 million to help reduce prices. Three points stand out. The first is that Watercare already runs an inflation minus three percent customers pricing policy. The second is that a borrowing of that magnitude would require interest servicing of $52 million annually plus an increase of $267 million a year in customer prices to maintain the company’s low interest credit rating at current levels. Additionally, the $800 million would have serious tax implications for all parties involved and the figure is four times Watercare’s annual revenue! The suggestion is a no brainer.
“My personal preference is for Watercare Services to become a trust owned by the people of Auckland who are the end users of its services. In the absence of this I most certainly support Watercare staying in territorial council ownership but with the powers of a council controlled organisation to further help its efforts, in conjunction with the territorial authorities, to drive down water and waste water charges.
“Mr Cayford’s suggestion would be of no benefit to the people of Auckland, Waitakere, Manukau and Papakura. It is noteworthy that he did not suggest placing the North Shore sewage treatment plant at Rosedale Rd in the hands of the ARC.”
No wonder, given its track record on regional issues.”