An Engineers Point Of View:
In August of this year (2026) the Havelock North water contamination incident will mark its 10-year anniversary. An inquiry was held and stage two of the inquiry was concluded in December 2017. One of the recommendations to come out of the inquiry was to create dedicated and aggregated drinking water suppliers to improve compliance, competence and accountability. It has taken over 8 years, but New Zealand is now undertaking a complex transition to new water service delivery arrangements via Local Water Done Well. The intent is right; the challenge is scale and timing.
What does transition look like?
There will be 42 water entities by 1 July 2027. At the time of writing, very few entities have formed, by far the largest and most complex of these is Watercare. The remaining entities still have to be established, with the following groupings:
• 23 councils have opted to keep water and wastewater services in-house.
• 7 councils will form a single council CCO.
• 37 councils will combine services into 12 multi-council CCOs.
Each will have to meet new regulatory expectations while sustaining day‑to‑day operations.
This is not one transition; it is many, happening at once.
The real risk: limited delivery capacity, not intent or funding
The challenge facing the sector is not whether we have the knowledge and capability to see through the transformation, the industry has people with great knowledge, talent and skills, it is whether we have enough of these people to do it well, at the same time, and without burning out the workforce.
The sheer number of organisations that need to be established in the next year and a half will put a severe strain on the capacity we have as an industry. There are only so many experts in the field and with all entities sharing a deadline, it will not be easy for entities to share their learnings with others as they go through what is essentially the same journey – meaning we may reinvent the wheel 40 or more times, which costs time and money all while adding further stress to our workforce.
Of course, there are some organisations that have been through this before most notably Watercare, first in 2010 and more recently in 2025. Watercare have already indicated they are open to share learnings and assist other councils on their own journeys, what form this takes remains to be seen.
The Risks and Consequences of Transition
Workforce Risk: The same senior operators, engineers and managers will be asked to help deliver capital improvements (or at least learn to use them), mentor new staff, and fix today’s problems. That is a recipe for burnout and the loss of institutional knowledge due to early retirement or moves across the ditch.
Service Risk: We can all agree that as an industry, the level of service provided to customers is often not at the level it should be. We still see the water and wastewater industry regularly shown in a negative light in the news, whether it be leaks, overflows, misspending or mismanagement; it just doesn’t look good.
The added responsibilities, changes to management, and other distractions that will be a part of transition are only likely to further negatively affect service, especially early on. This is not due to lack of commitment, but rather due to unclear priorities of the transition. What is it we really are trying to achieve with the transition?
Equity Risk: Lack of capacity is likely to affect smaller communities most. It’s happened before; limited resources lead to prioritisation – and the priority is typically determined by number of people served. Without safeguards, smaller communities usually wait longer for improvements (if they get them at all), despite having the same right to safe, reliable water services.
Failed Entities/Do Overs: Rushed transitions that are not properly planned or executed may lead to some of these new entities failing either financially, at a service level, or possibly both. What happens in this situation remains unknown, but at best they will be forced into another transition via amalgamation.
What needs to happen differently (starting now)
Sequence the work to match capacity: New entities must think about what is important and focus resources on these first. What are the key outcomes of the transition? Get the basics right and then look at adding value. This may well result in new entities operating much as they are now for a few more years after the transition, but if this prevents change that is counterproductive, then it is a good outcome. Too much change too quickly will be more trouble than it is worth.
Share a common playbook: Make sure that we learn from what has gone before, take the advice that Watercare are offering as well as sharing their own learnings with each other as they move forward. A shared playbook would be a great way to do this, capturing key lessons and putting it together in one place.
Build The Workforce: The industry needs to start building capacity (and capability) right now if it wants to be in a position to deliver and not burn out the workforce. It takes years of on-the-job learning to become confident in design decisions and if the capacity is not built now, it won’t be ready for when the investments are ramping up.
Procure for capacity and outcomes: Use collaborative delivery models that reward throughput, quality, and knowledge transfer - not just lowest price. Even those that chose to ‘go it alone’, should look to work with neighbours where it makes sense and bake in requirements to share learnings across entities.
Protect small communities with explicit equity rules: Create a simple, transparent prioritisation test so that rural and small-town customers are not perpetually last in line.
What success should look like by mid‑2027
Workforce: At minimum a stable workforce with minimal loss of talent, but ideally a measurable reduction in vacancies and turnover; fewer critical roles held by single points of failure.
Delivery: Planned capex beginning to be delivered; leading to improved level of service for customers and ensuring resilience of assets.
Operations: Improved working conditions, incident response times and compliance performance across drinking water, wastewater, and stormwater.
Consistency: Adoption of common standards and playbooks across most entities, even after transition is delivered making it easier for operations staff and external contractors to work across the industry.
Equity: A basic level‑of‑service parity index showing that smaller communities are moving at the same pace on essentials.
The Bottom Line
We have the capability to see through the transformation as an industry, but it is the limited capacity we have that poses a risk. While the form of each of the 42 entities will be unique, councils need to share common learnings and be open to working with other entities to learn from their experiences. Our industry must work together and make sure that we can employ our limited resources in a way that every person will benefit from the transition; both consumers and those that work in the industry.
The fix is coordination over duplication, prioritisation over pace, and people over process. If leaders choose that path, capability will meet capacity, and every community will benefit. Remember why we are going through transformation, it’s to improve compliance, competence and accountability. We do not want a repeat of the Havelock North incident.
