By Moana Ellis, Local Democracy Reporting
The Government has approved a joint water plan for Ruapehu and Whanganui but says the incoming water entity must investigate spreading charges across both districts to help address Ruapehu’s affordability challenges.
In a letter to council chief executives, Secretary for Local Government Paul James has directed the new Water Services Council Controlled Organisation (WS-CCO) to look at harmonising water prices.
His expectation was set out as the Department of Internal Affairs formally signed off on the joint Water Services Delivery Plan (WSDP) under the Government’s Local Water Done Well reforms.
The approval allows the Whanganui and Ruapehu district councils to establish a shared WS-CCO to deliver drinking water, wastewater and stormwater services for about 25,000 connections. Water assets will remain in public ownership.
James warned the DIA would monitor the new WS-CCO’s pricing strategy and its impact on projected water services charges for Ruapehu district.
“In order to access the benefits of increased scale and mitigate affordability issues faced by Ruapehu district, my expectation is that you will continue exploring options available to you including price harmonisation and the potential to join with other neighbouring councils and groupings,” James said.
“The [DIA] is available to assist with these discussions and support the investigation of further grouping options.”
Whanganui has pushed firmly for the new water services entity to adopt non-harmonised “local pricing”, while Ruapehu has consistently said harmonisation was essential to ease its significant water-cost pressures.
Price harmonisation would create a single, uniform charge for all customers across the two districts. It was rejected by the Whanganui council to protect its water users from cross-subsidising higher costs in the Ruapehu district.
The new entity will also be required to examine “potential future collaboration with other entities” to access the benefits of scale and help address Ruapehu’s affordability challenges, James said.
The DIA will also monitor delivery of the projects required to achieve regulatory compliance.
Ruapehu mayor Weston Kirton said he welcomed the DIA’s recognition of Ruapehu district’s “unique affordability pressures”.
“While these expectations are not conditions of the WSDP approval – and the plan does not require price harmonisation or joining with others in the short term – it makes clear that ensuring the WS-CCO can deliver the most affordable water services possible must be a key priority,” Kirton said.
“We know that many of our communities face significant challenges in being able to pay for basic services.”
Kirton said the immediate focus was on establishing the entity in a way that embeds Te Awa Tupua values from the outset.
These values are set out in the Te Awa Tupua (Whanganui River Claims Settlement) Act 2017 and centre on recognising the Whanganui River and its tributaries as a living, indivisible whole, safeguarding its mana and ecological health, and ensuring decisions are made in partnership with the communities connected to the Awa.
“Establishing the WS-CCO in a Te Awa Tupua way now will put us in a strong position to ensure that any potential future larger entity continues to balance local voice with the benefits of scale,” Kirton said.
Whanganui Mayor Andrew Tripe said the DIA’s approval “gives us the certainty to move ahead together”.
“We’ve chosen a model that balances keeping decision-making as local as possible within our shared catchment and providing benefits of greater scale while at the same time reflecting the values of Te Awa Tupua,” he said.
“It is important to both councils that the health of the river and the wellbeing of our communities guide our choices and sit at the centre of the WS-CCO from the beginning.”
Tripe and Kirton did not answer questions from Local Democracy Reporting on the DIA direction, including:
- Would Whanganui council be open to reconsidering price harmonisation or was local pricing a bottom line?
- Could future reform push the WS-CCO toward a larger entity or broader regional model where harmonised pricing becomes inevitable?
- If harmonisation was pursued, would Whanganui expect Ruapehu to contribute more transitional funding or seek central government support?
The councils issued a joint statement on Wednesday, saying they had not yet had an opportunity to discuss the acceptance letter.
“Both Ruapehu and Whanganui district councils are focused on delivering on our commitment to work together and establish the WS-CCO within the tight timeframe set out in the approved Water Services Delivery Plan.
“While the expectations outlined by the Secretary for Local Government, Paul James, are not conditions of their approval of the WSDP, they will form part of future discussions between the councils.
“Both councils look forward to working through these and any other matters that may arise as part of the WS-CCO establishment process.”
In July, the Ruapehu council voted 6-4 and Whanganui voted 8-5 in favour of the two-council model.
At the time, Whanganui said the entity would operate on non-harmonised “local pricing”. This meant residents would be charged only for the cost-of-service delivery in their own district, while still benefiting from a share of the savings gained through scale.
The joint Whanganui-Ruapehu plan was assessed by a panel of senior representatives from funding agencies, the Commerce Commission, the Water Services Authority, the DIA and an independent observer.
The new entity is expected to be operating by July 2027. Until then, Ruapehu and Whanganui will continue to run their own water services, with DIA set to monitor the WS-CCO’s development quarterly from next year.
The Secretary’s acceptance letter and the approved WSDP are available on both councils’ websites. The Plan Assessment Report will be published on the DIA website.
Awa FM – Te Reo Irirangi o Whanganui
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