The Two Waters Council-Controlled Organisation (Two Waters CCO) model represents a hybrid approach to water services delivery.

Under this model, a CCO would manage water supply and wastewater services, while the Council would retain responsibility for stormwater in-house. This structure is designed to combine the benefits of operational independence with the need for integration in areas like stormwater management, which often intersects with transport, parks, land drainage, flood management, and other Council-led activities.

How it would work

Independent governance and management for two waters

The Two Waters CCO would assume responsibility for the management, operation, and regulatory compliance of water supply and wastewater services. The Council would remain directly responsible for stormwater services, ensuring alignment with broader infrastructure priorities

Council ownership

The Two Waters CCO would operate independently for water supply and wastewater services and the Council would retain ownership and strategic oversight through its role as sole shareholder. Stormwater services would remain under the control and ownership of the Council

Service delivery

Water supply and wastewater would be managed independently. Stormwater would require coordination between the Two Waters CCO and the Council to address overlapping areas like flood management and environmental impacts.

Why it is not our proposal

Although the Two Waters CCO model provides some financial and operational advantages, we do not recommend it as the best option for Christchurch.

The hybrid nature of this model, with water supply and wastewater managed by a CCO and stormwater remaining under Council control, would introduce governance complexities. Effective coordination between the Council and the Two Waters CCO would be essential to ensure efficient service delivery and alignment with the city’s overall goals. However, this divided structure could potentially lead to reduced efficiency and make integrated water management more challenging.

Keeping stormwater management within the Council aligns well with our broader infrastructure responsibilities, such as flood protection and urban planning. However, the Two Waters CCO model still limits the potential for fully integrated water management across all three services.

Transitioning water supply and wastewater services to a Two Waters CCO would involve significant upfront establishment costs and potential risks during the transition period, similar to the full CCO model.

While the Two Waters CCO model might be suitable in the future, particularly if greater scalability and specialisation in water supply and wastewater management become necessary, our assessment concludes that the in-house model currently provides a more cohesive and cost-effective approach for Christchurch.

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

Note that this is a summary. See page 57 of our Indicative Business Case for a more detailed assessment of the Two Waters CCO model.