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Aucklanders To Pay For Water Privatisation

20 June 1999

Papakura people are about to face a 45 percent jump in the cost of their water, Green Party Co-Leader Jeanette Fitzsimons said today.

The costs were likely to be announced this week, she said.

Ms Fitzsimons was criticised for saying two years ago that privatising the Auckland suburb's water would lead to price hikes and lower quality.

"Now I'm about to be proved right," she said. "I predict that we will also discover eventually that United Water has been cutting corners on water quality and maintenance just as one of its parent companies has done in Britain, because it tendered too low in order to get the contract. "

In early 1997 Ms Fitzsimons analysed and strongly criticised the Papakura water franchise contract which was the first of its type in New Zealand. United Water, composed of two multinational water companies, Generale des Eaux and Thames Water, paid Papakura $13 million for the franchise which allowed them to run the water and wastewater systems, pay all the costs, and charge consumers, for 30 years, with right of renewal of another 20 years.

The contract required the price to stay the same for two years (ie until early 1999), then allowed to rise to the average price for Auckland.

"However Papakura has had much lower prices than the rest of Auckland because it has a high proportion of industrial/commercial customers and is cheap to supply. There is no need for the price to equal the rest of Auckland," she said.

"Also Papakura people will be hit twice, with their draft plan at present providing for rates to rise by 28 percent as a result of pre-election gross overspending and higher costs of privatisation generally.

"Two years ago I predicted the $13 million would be used to keep rates down until after the 1998 local body election. They would then rise. I also predicted the freeze on water rates would end after that election."

Ms Fitzsimons said she was disturbed by the trend towards privatising water.

"A Commerce Ministry review of water and wastewater services is due out later this year and is expected to recommend or even require local bodies to privatise their water and wastewater."

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