Jamie Sinclair: Incoming Watercare CEO on how much Aucklanders bills will rise by amid record investment.

Watercare’s tunnel boring machine has completed a four-year journey, breaking through this morning.

The development comes as Watercare has announced a $14 billion investment to renew ageing and failing pipes over the next decade.

Meanwhile, Auckland water charges will rise by 7.2% from July as Watercare becomes financially independent.

Incoming Watercare CEO Jamie Sinclair talks to Ryan Bridge about what the investment means.

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Episode Transcript

Speaker 1 (00:00):
Right now, the country's largest sewerage tunnel is officially bored.
Tunnel boring machine that's been digging Auckland's sixteen kilometers central
interceptor broke through this morning. It comes as water Care
has announced a huge fourteen billion dollar investment to renew
aging and failing pipes over the next decade. But the
question is how much is that going to cost Aucklanders.

(00:22):
Jamie Sinclair is Watercare's incoming chief executive. He's with us tonight. Hello,
good evening, Ryan, Greg, to be with you, great to
be with you too. Now, how much are water bill
is going to go up by in Auckland in the
next year and in the next five years, in the
next ten years, do we know?

Speaker 2 (00:38):
Yeah? Look, Ran, Well, this is part of our business
plan which we're really excited to release this week, which
articulates all of the investment for thirteen point eight billion
dollars of investment that we're making in water and wastewater
infrastructure across Auckland. And obviously as part of that we
are outlining to Auckland is how we're going to finance
that and from that, and that includes the prices that
we charge for water, water and wastewater services. So for

(01:02):
next year, that is our ticulator in our business plan.
The price will go up by seven point two percent
for the wastewater and water tariff charges that we charge
to Auckland customers. It's a similar quantum the following year
and then it drops to five point five percent for
the next couple of years.

Speaker 1 (01:22):
So we're looking at increases of at least five percent,
so well ahead of inflation. But what do we get
for that.

Speaker 2 (01:29):
Yeah, that's that's right. That what the plan articulates at
that level of investment. And I think what we've done
is identify what we need to both renew and repair
and upgrade our aging infrastructure and also allow for growth.
We know that Auckland is growing rapidly the last five
years at one hundred and twenty thousand people came to

(01:50):
the city and about the size of the need and
that puts pressure obviously on the network. So we are
allowing for that in the business plan. So that the
projects is about a thousand projects included in our plans
and that thirteen point eight billion dollars of investment. So
what you'll what Orkland this will be able to see
is a continuation of the service they get with us,

(02:11):
but also the will we will replacement?

Speaker 1 (02:14):
Will we get no more poo in the ocean for
that price?

Speaker 2 (02:19):
Well, thankfully we've Today is a great day for Aukland,
I think and for and for water care with the
breakthrough of the Central Interceptor Tunnel at point Erin, and
I highlight that because both it's a it's a really
a project that we're really proud of, but it also
will dramatically, once we connect all the pieces up, dramatically

(02:41):
reduce the number of overflows that we see into our
into our harbors. So we're really proud of that. And
that's exactly the investment.

Speaker 1 (02:48):
Still still a little bit, but not you can't get
rid of it completely. We'll never stop, we will never
stop the waste going into the water completely wet.

Speaker 2 (02:59):
Our net work is in some parts a combined network,
which means that stormwater and wasteble to combine when there's
a lot of rain. Our system is designed like that,
but obviously we need to we need to continue to
reduce that.

Speaker 1 (03:13):
When you look at the debt that you're having to
take on, I mean you are trebling your debt levels.
To put that in perspective, it is more than the
debt of all the big four power gen tailors combined.
Is this risky? I mean? And how expensive to pay back?
And the numbers you've given us for how much we
are going to have to pay each year presumably haven't
taken into account whether your debt servicing costs might go

(03:36):
up rapidly at one point or another.

Speaker 2 (03:39):
Yeah, no, we have. We' we've fected about all that
into our financial model and you're you know, it's very
you know, by the very definition of what we're try
to do is we need to balance that pressure on
customers versus the long term financing that we can access
now through the work that was done through Council and
government on the financial separation water care, which really has

(04:01):
enabled this capacity that we've got now. And look, we
are very mindful of the debt level. We will be
managing that vary very carefully and conservatively. It is I
appreciate it, it's a lot, but this is what's needed
to spread the cost of that long term infrastructure investment
over generations as opposed to lumping it all on today's

(04:22):
open much higher charges. So there's that balance that we
have to always have to manage between pressure on customers
today versus making sure that the value that is accreted
through those assets is realized over time.

Speaker 1 (04:40):
Yeah, I think people are going to agree with you
in a funny way, even though you have to pay more.
We look at places like Wellington and you think, well,
I'd rather actually have functioning pipes. What about the housing
developments in the north and the south of the south
of the city right now were you actually can't get
water connections. What needs to happen so that that can
be done.

Speaker 2 (04:58):
Yeah, it's for capacity maps and capacity constraints that we
published last year, and I think that's a good example
of us being much more open and transparent with actually
what is happening across the city in terms of those constraints.
Because we need to unlock all of that. That takes time,
and what we're doing is articulating and giving developers in particular,

(05:20):
but also those who are looking to build information to
make decisions, and we'll be giving more information around the
time scales and the projects that are need to unlock
those capacity constraints. So look, I can't see a future
where there is no capacity issues across Auckland. But I
think what we are doing is being more open and
transparent with what we're doing to resolve those and the timelines.

Speaker 1 (05:41):
All right, Jamie, appreciate you coming on the show. Jamie Sinclear,
the incoming Water Care Chive executive. For more from Hither Duplessy,
Allen Drive, listen live to news talks. It'd be from
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