A tale of two regions - Concurrent structural reorganisation within the water service industries of Auckland, New Zealand and SE Queensland, Australia

Two major regions of Australasia with similar population sizes are concurrently making changes to their water and wastewater industries, with the overall goal of achieving efficient and effective delivery of services to customers. Both industries are in public ownership therefore the changes are driven through public policy as opposed to pure market driven incentives.

The City and Region of Auckland, New Zealand, with a population of 1.2 million, will integrate vertically the bulk water and wastewater services and the local network operation, two-tier industry into one body responsible for all services. Overall governance will be through one single Auckland City Council driven by the outcome of the Royal Commission that was charged with reviewing the governance of the region. The final outcome of the transition for the water industry is set for October 2010.

Meanwhile in SE Queensland, Australia, with a population of 3 million will complete a reform that separates horizontally the roles of bulk water collection and treatment, bulk water transport, distribution/retail and wastewater treatment into a three tier industry. This model is very similar to that of the power industry. This reform process has been driven by the Millennium Drought that challenged to public water supplies. Recommendations were made in 2007 by the Queensland Water Commission to State Government for reform resulting in alternative structures. These reforms were completed in July 2010.

The two regions have much in common sharing technical drivers for the provision of good quality water to customers, levels of service and asset management, however, each has responded by developing a changed and arguably, a simplified model from that which preceded the reforms. These reforms appear to reverse the management models; Auckland had a horizontally disaggregated operations based structure and will have a vertically integrated structure, whereas South East Queensland has moved from one of apparent vertical integration to a horizontal separation.