Hawke's Bay Three Waters Review

About the Review 

Beginning in 2019, Central Hawke’s Bay District Council, Hastings District Council, Hawke’s Bay Regional Council, Napier City Council and Wairoa District Council, worked together to review the current and potential three waters (drinking water, wastewater and stormwater) service delivery options for Hawke’s Bay, Te Matau-a-Māui. Guiding our review and assessment of the options were a set of agreed objectives and principles. 

Key findings and recommendations of the Hawke’s Bay three waters review report:

• Making no changes to the way our three waters services are delivered is not affordable or sustainable
• Meeting the new regulations under current service delivery arrangements poses significant affordability challenges for our region and particular our smaller councils
• The Review’s forecast investment in three waters infrastructure across the region to meet new drinking and waste waters standards is estimated to at least double since councils’ 2018-2028 Long Term Plans from $313m to $605m
• Five service delivery options were shortlisted and considered against regional objectives and cultural principles
• An asset owning council controlled organisation was the preferred service delivery model as it best met Councils’ investment objectives and the cultural principles developed collaboratively with Councils’ Māori Standing Committees. In particular, the model:
• Addresses regional affordability challenge associated with new standards and regulations
• Is able to concentrate its investment on three waters priorities
• Delivers the scale required to create strategic capacity and capability
• Enables a meaningful role for Māori (including co-design and governance)
• Enables improved operations (risk management, asset management, ability to meet compliance requirements
• Produces the greatest savings.

There are also challenges in adopting a regionalised service delivery model, in particular:      

• Perceived inequity that arises when councils transfer different levels of three waters-related debt and assets of varying condition to an asset owning CCO. Where this happens, some ratepayers may feel that they are inheriting someone else’s problem
• Regionalising three waters rates to reduce the costs of three waters services to an affordable level across the Hawke’s Bay means Napier ratepayers may pay more for three waters than they otherwise would (under the enhanced status quo).

Moving to a regional service delivery model means that costs for most ratepayers will be lower than the expected future costs, while for some, theirs will be higher. This will be a challenge for every region in New Zealand.

The importance of the cultural case

The Māori engagement process identified a cultural gap in the better business case framework for the Three Waters Review report. Initially the approach was to weave a cultural element through the business case but during the project it became clear that a separate cultural case was required. The rationale for a cultural case was that Māori cultural values and traditions associated with water have been well documented within council processes, however the operational implementation of cultural values was considered to be a gap.

The role of the cultural case is to highlight that within the regulatory framework relating to water, Te Ao Māori, through its language, genealogy, stories and traditions, requires a greater level of competency than usual. The cultural case is underpinned by the Treaty of Waitangi.

It identified a model that paves the pathway of Hawke’s Bay partnership and co-design with Māori underpinned by the Treaty of Waitangi. In doing so it recognised twenty-plus years of relationship growth between five Hawkes Bay councils, post-Treaty settled iwi and the Ngāti Kahungunu iwi Taiwhenua structure. The cultural case recognises iwi and hapū regional affiliations and their preparedness to act collectively which exists because of relationships, trust and confidence, born of time and kanohi ki te kanohi. This would not exist under a multi-regional approach. 

You can read the full report or specific sections by clicking the links below:

Executive Summary and Recommendation

Quick Guide to Report

Full Report and Cases

Hawke’s Bay Three Waters Review Report summary videos

In June 2021, the Government released its proposal to establish 4 regional water entities, where Hawke’s Bay three waters services would transfer to a regional entity comprising of 21 councils from the East Coast of the North Island to the top of the South Island and the Chatham Islands.

To help inform our assessment of the Government’s three waters reform proposal, the financial analysis completed for our review has been updated, and the Government’s own modelling (completed by the Water Industry Commission for Scotland (WICS) has been analysed.