A bid by Delta Utility Services for a stake in the future of Dunedin's $1.6 billion water network is to be scrutinised by the Dunedin City Council.
That was despite concerns about a loss of Dunedin City Council control over the city's water network again being raised at yesterday's finance, strategy and development committee meeting.
Councillors at yesterday's meeting instructed the council's "Three Waters" working party - tasked with examining the future of the city's water infrastructure - to undertake a detailed analysis of the Delta proposal over the next three months.
The working party had since January been analysing plans for a new council-controlled organisation (CCO), called SouthernWater, to oversee the city's water network, helped by 100 council staff transferred to it.
However, Delta - another council-owned company - in August presented the working party with an alternative, which would see water assets transferred to a new CCO, but Delta providing all the CCO's services.
The 100 staff would be transferred to Delta, not the SouthernWater CCO.
A council staff report - based on analysis and peer reviews - estimated savings of $1.7 million to $1.8 million a year, or $10 million to $12 million over a decade, under the SouthernWater proposal.
The Delta proposal estimated a $50 million boost in revenue, savings of $2 million to $3 million a year across the Dunedin City Holdings Ltd group and a $3 million to $5 million jump in annual dividend payments to the council.
Working party chairman Cr Andrew Noone told yesterday's meeting the Delta proposal appeared to have merit, but the financial estimates were "raw" and "untested".
However, a decision on whether to launch a detailed investigation of the Delta proposal was outside the working party's scope, and required a decision by councillors.
The Delta proposal was essentially a "hybrid" option, under which the city's water assets would be kept outside Delta, Cr Noone said.
That was because Delta was a mix of both a CCO and a council-controlled trading organisation (CCTO), and Cr Noone said CCTOs brought with them a more commercially driven focus.
It was felt a new CCO for the water assets was a "better fit" that would not "loosen the shackles" of council ownership and control, he said.
However, Cr Jinty MacTavish - who criticised plans for a CCO in January - reiterated her "fundamental concerns" yesterday.
She worried about a loss of transparency and control over the future of the city's water network, that projected savings might not occur and the council would lose skilled staff.
The council's should instead focus on improving its in-house operation, rather than councillors being asked to consider "two crappy options", she said.
Cr Noone agreed there were examples of CCOs "where there has been some issues", but also others where the model worked.
"I think it's unfair to suggest what we're working on ... is something that is crappy. I think that's incredibly unfair at this stage in the process."
Councillors eventually voted to study the Delta proposal, or any possible variation that arose, in detail.
The working party would then report back to councillors by the end of January, with councillors then to decide whether to consult the public on one or both of the options, or change their minds.
