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Outram residents on the Taieri Plain can expect to have a water supply that meets official drinking standards by summer.
A $500,000 upgrade of the water treatment plant for the rural Dunedin suburb will start in the second half of this year.
The upgrade involves installing bug-killing UV treatment at the plant, which will bring the water to a quality that complies with current drinking water standards.
The UV treatment will result in a reduced need for boil-water notices in the area.
The upgrade follows a 2006 assessment that revealed Outram's water supply would need to be upgraded by July 2014 to comply with Drinking Water Standards New Zealand.
The scheme supplies about 680 people in the Outram area.
Dunedin City Council water and wastewater engineering project manager Will Clifford said boil-water notices might still be issued in the case of a heavy downpour muddying the incoming water so it could be treated properly, but it would be rare because a reservoir in the system held enough treated water for 10 days' supply.
Tenders would be called for in the next few months, with construction to be completed in summer.
There would be no disruptions to supply during the construction phase.