The $49 billion cost of fixing water infrastructure woes laid bare

New Zealand needs to spend as much on water investment in the next decade as has been spent over the past 125 years, if the country is to fix its water woes, according to the Independent Infrastructure Commission - Te Waihanga.

Commission chief executive Geoff Cooper told Morning Report there's been huge under-investment in the water system, particularly in the 1980s and 1990s.

"The number that we have here from the water service delivery plans is about $49 billion over the next 10 years.

"To put that into perspective, that's about on par with what New Zealand has spent on water services in the 125 years since 1885."

Cooper said this shows how big the "deferred maintenance gap has become", and the bill will have to be paid for by ratepayers.

"We're concerned with the affordability of this, because at the end of the day, these capital investments end up being user charges, whether it's for users, on the rating base, on the tax base, but it turns into a number that people need to fund on a daily basis because of the maintenance costs on these things."

Cooper said New Zealand can't build its way out of this crisis, and "there's going to have to be a focus on asset management, maturity, cost control and transparency [of the assets]," which is currently an issue because Cooper said it isn't always clear "what we own and where it is".

New Zealand's water usage is also an issue, which Cooper said is one of the highest in the OECD, and in many places around the country people aren't seeing the real cost of water.

"We really need to be thinking about demand management... asking people to see what the cost of using water is.

"So frequently, in some cities, we will pay for water using, say, volumetric charging. You'll get a bill for water, and you'll see the price of delivering water from wherever the storage is to your, you know, to your tap. But in many places around New Zealand, we actually don't do that. We put it through rates, and what that means is you don't see what the cost is."

Cooper also discussed issues relating to climate change and severe weather on water infrastructure, saying the climate aspect is of particular concern

"Earth Sciences are telling us that the water sector is actually one of the top two most vulnerable to some of these changing climate issues.

"At the moment, annual losses of $139 million per year is what you can expect from severe weather events. That could go up as high as 65 percent higher on top of that.

"So the need to really focus on where the high-value interventions are probably has never been more important than what it is now."

Cooper also said cities "need to be thinking about where they can grow such that the water investment requirements are not so high," and said as a country we need to understand where the most cost-effective places to grow cities are, and "that perhaps we can grow our way out of this problem for some of those places that are growing".

"And for those places that aren't growing, it really is about optimising the network and thinking about small interventions before large ones."

Cooper said if some communities don't have the rating base to afford maintenance, it is difficult for them to afford big capital upgrades.

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