The Three Waters Council-Controlled Organisation (Three Waters CCO) model would involve establishing an independent entity that would be owned by Christchurch City Council but operate separately.

Under this model, the CCO would assume full responsibility for delivering water services, including water supply, wastewater, and stormwater and the Council would provide strategic direction as the shareholder.

How it would work

Independent governance and management

The Three Waters CCO would have its own governance and management structure, focused solely on the delivery of water services separate from other Council responsibilities.

Council ownership

The Three Waters CCO would operate independently but the Council would retain ownership and strategic oversight through its role as sole shareholder, and through governance and accountability arrangements, including a statement of expectations and input into the water services strategy. The Water Services Bill includes statutory protections that water services remain in public ownership and prevents privatisation of water services. The Council would have the power to appoint and remove board directors.

Service delivery

The Three Waters CCO would manage day-to-day operations, compliance with regulatory standards, and infrastructure investment planning. It would have the ability to assess, set and collect water services charges from consumers, and could charge developers where additional demand or growth is created.

Why it is not our proposal

While the Three Waters CCO model has certain benefits, including higher borrowing capacity and a specialised focus on water services, we do not believe it is the most suitable option for Christchurch at this time.

The significant upfront costs associated with establishing a separate entity, coupled with the potential risks and disruptions during the transition process, outweigh the model’s advantages. Additionally, moving to a Three Waters CCO would reduce the Council’s direct control over water services, which could impact the ability to coordinate water management with other Council functions and respond to community needs.

Although the Three Waters CCO model may be more appropriate in the future, particularly if greater scalability and specialisation become necessary, our assessment concludes that the in-house model is currently the most cohesive and cost-effective approach for Christchurch.

Once the Water Services Delivery Plan is adopted, and if the city’s requirements evolve, the Three Waters CCO model could be reconsidered. However, at present, the in-house model offers a more balanced solution that aligns with Christchurch’s immediate needs and priorities.

Note that this is a summary. See page 54 of our Indicative Business Case for a more detailed assessment of the Three Waters CCO model.