IAWAI Water Services Strategy

There were a few things I thought were done well and would aid the public in having an appreciation of what IAWAI is trying to achieve. I appreciated that it sets out the size of the challenge in terms of aging pipes and plants, growth pressures, environmental rules and rising costs. This frames the rest of the strategy well.
That said, there were areas that I see additional clarity offering value.
1. Debt and affordability
The strategy outlines the plan to make a $3b-ish capital investment over 10 years, noting that a bigger share of this will be used in the early years to keep prices lower in the short term.
I understand the logic behind this in terms of price smoothing and spreading the cost across the asset life. However, I think there is benefit to be gained from being clearer about the limits around how that borrowing happens.
For example:
How much debt is expected at peak borrowing?
What happens if interest rates rise?
What happens if growth slows?
At what point would projects be delayed or re-phased to protect affordability?
Affordability should not only be measured in the next two or three years. It needs to be sustainable over the full life of the borrowing. Clear guardrails would give greater confidence.
2. How projects will be prioritized
We need to be confident that a programme of this scale will be managed with discipline. The strategy states there will be “no fat in the system”, but it would help to clearly show how projects are ranked and staged.
For example:
Which projects are legally required now?
Which projects are primarily about enabling future growth?
Which projects could be staged if costs escalate?
How renewals will be balanced against new infrastructure?
With so much money involved we need to be able to be able to clearly see the logic behind what is done first and what can wait. We need to be confident that sequencing will be done responsibly.
3. Growth paying for growth
I support this and I suspect the public will agree. The proposal of a $500/y levy on new builds is one way of doing this and I am supportive of this idea in principle.

But I would like to see articulated more explicitly in the strategy:
How much of the total growth related cost this levy will actually cover.
What percentage of growth investment will still fall on existing households.
The draft notes that the levy would generate $17.7 million over 10 years. That figure should be shown alongside the total cost of growth-related infrastructure so we can see whether the shift is meaningful.
4. Price harmonization
The strategy notes that over time water prices will be harmonised across Hamilton and the Waikato District.

I appreciate that that makes administrative sense, but it will have winners and losers. So this can be evaluated with two eyes open to the impacts, the strategy should clearly outline:
Who is likely to pay more, and how much more
Who is likely to pay less, how much less
The timeframe for transition
Transparency on this will help manage expectations and avoid future tension.
5. Savings and efficiency
The draft notes a 2.5% savings programme. This could be clearer. Can it be explicitly stated what saving that applies to, whether it is expected to be ongoing or not and how it compares with what comparable organisations have achieved – i.e. some benchmarking so there is some context around this otherwise its just a number. Public confidence will require that the efficiencies planned for are visible and ongoing.
6. Alternative delivery models
The strategy mentions exploring private partnerships in some growth areas. The presentation noted this with a bit of realist scepticism, lightly referencing it as Santa opportunities (or something along those lines). I applaud the aspiration of a public private partnership, but if this is not actually expected to be feasible, I would question the value and ethics of putting this in there.

Last thoughts:
This strategy sets out a very large investment programme that will directly affect household costs for decades.
Before public consultation proceeds, I think the document should be strengthened by clearer explanation of:
1. The borrowing limits being set
2. How projects are prioritised
3. How much growth will genuinely pay for itself
4. Who will be affected by pricing changes and how
Clearer financial boundaries and prioritisation discipline will build stronger public confidence in what is being proposed.
Thanks for the opportunity to offer my thoughts.
____________________________
Hi IAWAI consultation team,
In addition to my earlier feedback (dated February 19 and sent directly to the IAWAI management team), I would like to add the comments noted below.
But first, I wish to thank you for the comprehensive response provided. I appreciated the acknowledgement as appropriate for this stage of the consultation and look forward to you engaging with the substantive nature of the feedback once consultation formally closes.
In terms of the additional comments I would lodge, I would like to see a clearer definition of the decision boundaries that will guide how this programme is delivered over time.
The strategy sets out a significant investment pathway. However, it is less clear what specific mechanisms will be used to adjust that pathway if underlying assumptions change.
In particular, it would strengthen confidence for IAWAI to clearly outline:
What thresholds or indicators would trigger the rephasing or deferral of projects?
How will affordability be assessed beyond the initial years of price smoothing?
What response is expected if growth, revenue, or cost assumptions do not materialise as projected?
How prioritisation decisions will be made when trade offs are required within a constrained funding environment?
At the scale of IAWAI operations, the strength of the strategy will not only be in what is proposed, but in how clearly it defines the conditions under which decisions may change.
Providing greater visibility of these boundaries would help ensure that the programme remains disciplined, responsive, and aligned with long term affordability over time.
Thanks for the opportunity to help shape how IAWAI proceeds.

No, these are my own personal views