Ashburton could be compelled to pick a neighbour under the Government’s new water reforms.

The Local Water Done Well bill, expected to pass in Parliament this month, replaces the scrapped Labour government’s Three Water reforms.

Councils will then have a year to submit plans for funding and how they will ensure financial sustainability for water services into the future - Council-Controlled Organisations (CCOs) and joint-council arrangements.

Local Government Minister Simeon Brown said water CCOs would be able to borrow up to five times what they took in through water rates - about twice what councils can borrow on their own - subject to "prudent credit criteria".

Councils will likely need to amalgamate services to achieve scale and cost efficiency, or the Government could make them, Brown said.

"My message to councils is clear. Get on board with these changes quickly.”

That could put Ashburton in the middle of its wider region.

To the north, Selwyn is part of the Greater Christchurch Partnership, while Timaru is aligned with the other South Canterbury councils - Mackenzie and Waimate.

Ashburton District Council chief executive Hamish Riach said the council is looking at its options.

"The work that we are doing at this stage sees all options being openly considered.”

That included South Canterbury, central Canterbury, “any other solution”, he said.

Mayor Neil Brown said the key aspect is that assets remain locally owned.

"There is an opportunity we could go on our own or something more Mid Canterbury orientated.

"We can set up a CCO or keep it in-house to keep it Ashburton orientated, or we could have some shared services with others.

More information was coming to the council to steer its decision-making, Mayor Brown said.

Councils will also be able to borrow up to 500% could be beneficial - "but it’s still borrowing and you have to pay for it – it’s not free.”

Rangitata MP James Meager said the new water policy maintains council ownership and control of water assets and provides flexibility rather than a one-size-fits-all approach.

"Ashburton is considering how this might work for them, and I know the South Canterbury councils have been in discussion with Ashburton and Waitaki councils to see how a joined-up approach might work.

"There might also be room for other innovative, local Mid Canterbury-alone solutions which could work for Ashburton.

"Ultimately, the choice should be up to councils and communities as to what works best for them.”

Access to the new models means that Ashburton "could, in theory, better manage debt and make key investments in water infrastructure without drastically hiking rates”, he said.

By Jonathan Leask