Renewals up to $26m per annum

The Dunedin City Council has a financial mountain to climb to fix the city's ageing water infrastructure, amid warnings old pipes at risk of failure could be a threat to public safety.

A report by council water and waste services (WWS) staff warned the state of the water network meant annual renewals spending would have to more than double, to about $26 million each year, for the decade from 2025-35.

The council was already budgeting for water renewals spending to increase from about $10 million in 2011-12 to $20 million a year by 2021-22, as part of a budget for the next decade to be considered next week.

However, the real hump would come in the following decade, when renewals spending would have to average about $26 million a year to address "particularly significant" demands to replace pipes reaching the end of their life spans, the report said.

The funding spike was part of a looming $820 million bill faced by the council during the next 50 years, needed to replace more than 50% of the city's entire water network requiring renewal by 2060.

The overall size of the bill was first reported by the Otago Daily Times in 2010, when the council released details of its Three Waters planning work for water, stormwater and wastewater infrastructure.

The latest staff report - a WWS business case for the years to 2021-22 - would be considered as part of next week's 2012-13 pre-draft annual and long-term plan deliberations, beginning with a workshop for councillors on Monday.

The staff report noted the council had been underfunding the renewal of water infrastructure for "an extended period of time", despite recent increases, but had so far avoided too many visible problems.

However, that did not mean the network was in good condition, the report warned.

Instead, ageing and deteriorating pipes could continue to perform reasonably well, with few outward signs of trouble, until a sudden and catastrophic failure, it said.

Pipe condition data so far covered only small portions of the entire network, but had found pipes in poor and very poor condition in need of replacement, despite continuing to perform well.

It was therefore "strongly recommended" councillors continue to increase renewals funding, or risk increasing failures across the network, the report said.

Only about 10% of the city's wastewater network condition had been checked, which had found issues including nearly 4000m of pipes older than 100 years in need of replacement, which was likely to cost at least $1.17 million.

Delaying the work would risk wastewater network failures, which could result in sewage flowing on to private property, public roads or into the city's waterways, and causing "potentially costly" public health contamination issues, it said.

Major traffic disruption could also result if larger sewer assets collapsed, it said.

The city's water pipes were also losing more water than previously thought, with leak assessment work concluding the reported leak rate of 10% was actually more likely to be about 22%, with the CBD the worst area, the report said.

The council had condition data for about 15% of the city's 1400km of water pipes, showing just under 8km of those checked pipes were in "poor or very poor" condition.

That included a "significant proportion" of pipes around Moray Pl, Harrop, Bath and George Sts, and in the Octagon, which would need replacing - at a potential cost of $2.5 million - in the next 5-10 years to minimise the risk of failure.

"Most are critical water mains and the likelihood and consequences of catastrophic failure are high and increasing with time," the report said.

The remainder of the deteriorating water pipes would cost roughly $2.15 million to replace, the report said.

Deferring any of the work would lead to higher operating costs from increasing outages and repairs, and declining water quality problems.

Catastrophic network failures could even cause property flooding and land instability.

"High pressure water mains also pose a significant safety risk, with the sudden and sustained force of water likely to cause damage to property or injury to people, depending on the location."

Only 7% of the city's 363km stormwater pipe network had had its condition checked, with 418m of pipe found to be in a "moderate" condition.

However, there was likely to be a "significant proportion" of the network in poor or very poor condition, and delaying renewals would lead to problems.


DCC spending
• $10 million this year on water renewals
• Already budgeted to rise to $20 million a year by 2021-22
• Will have to reach $26 million a year for decade from 2025-35
• Part of estimated $820 million bill to replace more than 50% of city's water network by 2060

 

chris.morris@odt.co.nz

 

Priorities

That $800m over 50 years is $16m a year - it's not something we (the ratepayers) can avoid paying. Even if the water system is sold off we'll get stuck with the bill by the new owners.

The $16m (just for repairs) is also about what we're paying yearly to finance the stadium,  it's almost bankrupting the city, which at the moment can't figure out how to pay for it - how will the city be able to pay for both?

This is where our councillors have fallen down on the job, they've prioritised silly luxuries like rugby over their responsibilities to maintain the city's core infrastructure - it's time they grew up and started taking those responsibilities seriously, cut the stadium fat, get Mr Farry and ORFU to pay their promised share and start reducing the rugby debt and saving to repair things like the water system, things that really matter, before the sewerage starts flowing in the streets

Depreciation

Looks like these are just accounting entries after all...not accruals for replacement value.

DCC failure

This really highlights the fact that past councils have ignored and underfunded a major core responsibility in order to push through unwanted vanity projects. City lawyers will be rubbing their hands together in anticipation of a "flood" of cases involving private property damage caused by "catastrophic network failures". Maybe central government needs to step in and take up the responsibility?

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