New Zealand is approaching the start of the first great water infrastructure renewal cycle in our history.

Older countries, such as those in Europe, America, and parts of Asia, are already working their way through this cycle. Some have been through it multiple times, but as a young nation we are only approaching it now.

In the ground below our feet is a complex mix of pipes, all installed in different ways, made of different materials, and laid at different times.

These might be older cast iron pipes, which can last over a hundred years, or the concrete-asbestos pipes so popular in the 50s, 60s, and 70s, which were comparatively cheap, but only last 50-70 years.

The renewal timeframes for these differing kinds of pipe are converging. This convergence has been amplified by the practice of deferring renewal of these pipes across New Zealand over several decades. We’re reaching an inflexion point – and, just as the pipes below our feet are maturing, our approach to renewing them needs to as well.

On top of this aging infrastructure we also have growth, stimulated by rapid population increases, increasing demand for water services and the new assets built to deliver these services.

The approach of the first great renewal cycle is indicated by recent government estimates that as much as a fifth of treated water is lost due to leakages in the system. That’s roughly double the international best-practice rate. A lot of drinkable water is seeping into the ground.

What is less obvious is the cost of the leaks. That leaking water has been pumped, which costs money, it has been treated, which costs money and there are the additional opportunity costs associated with the losses, such as deferral of capital expenditure to meet peak demands.

There is a fine balance between the cost of leaks and the cost of pipe renewal, but it doesn’t take long before the former outweighs the latter.

People think we’re a water-rich country. We are blessed with lush greenery, a temperate climate, and plenty of water reserves, and this has created a perception that water is free.

It is when it falls from the sky, but when it comes out of the tap, it costs money. Long term, a properly funded and efficiently executed renewal effort is the only cost-effective solution to offer safe and reliable water services in our country.

Today, we have over 67 organisations around the country supplying water. Many share a traditional piecemeal approach to renewing water infrastructure. Linear procurement, with its high transaction costs, individual tender processes and slow delivery will not deliver the needs of the renewal programmes facing New Zealand water authorities.

Companies involved in maintenance and renewal face a lot of uncertainty on where their next job is, and inevitably chew up a lot of resource just responding to ad hoc tender requests from multiple water authorities. That’s resource that could otherwise be spent improving the local water network.

If water companies want to hire more staff, take on apprentices to address labour shortages, invest in new technologies and more efficient plant, the industry needs increased certainty around larger and longer scopes of work.

New Zealand needs water reform, there’s no doubt about that.

Regardless of which side of the political fence you sit on, the way forward is creating more sustainable water entities with their own balance sheets, so they can take on debt to fund renewals, standardise practices, and offer more continuity of work to the market.

Water assets can and should remain in public ownership, but where private companies and investments can create efficiencies, we should look at these. We should not make it prohibitively expensive or impractical for these types of models to function effectively. If we do, we kill innovation.

There is great debate about who should pay, local government or central government, but ultimately there is only one group that foots the bill, and that’s the public.

Call them rate payers or taxpayers, ultimately it is the same people.

There’s no way around it, if we want safe, reliable water supply and sewage systems, we must put money into it, and I think politicians will be surprised to find the public generally are willing to spend the money.

We need to decide now how much we are willing to spend, and what systems of delivery and maintenance we should use.

I have worked in the water industry for 30 years. I can say with confidence that the first great renewal cycle is here, and I know these are decisions we should not delay.

– Mark Christison, National Water Manager, Fulton Hogan