A potential “recipe for a massive failure” in Mid Canterbury has been avoided after a Government change of heart.
Local Government Minister Kieran McAnulty on Wednesday announced that only council controlled organisations (CCOs) whose predominant purpose was for water services will be transferred to the new water services entities, under the Government’s controversial water reforms.
That means that Ashburton Contracting Limited will continue as it is.
Before the announcement, the council-owned company was in line to be stripped of assets and resources associated with the delivery of the council’s water and wastewater services.
The change has been been welcomed in Ashburton.
Ashburton District Council chief executive Hamish Riach had just finished explained to councillors that they had yet to be given an update on Government’s position around CCOs when McAnulty’s announcement came through.
“It’s a really good outcome. For ACL, for the council, but most importantly for the community,” Riach said.
“It means on day one, if the reforms indeed proceed, then the people looking after the network know what they are doing so it will be business as usual.
“The decision preserves the value of the company to council and the community.”
ACL had been facing the possibility of losing its council contract, worth about $2.5m to the company, ACL chairperson Alister Lilley said in March.
Any reduction in profit would have reduced its dividend, an average of $600,000 each year, which the council used to offset general rates.
The decision also provides certainty for ACL’s staff who had been caught up in the reforms, Riach said.
“Now they can just carry on being the great company they are.”
ACL chief executive Gary Casey had previously described the potential transfer of the company’s assets and staff as “a recipe for a massive failure” and said it would  put the entire network at extreme risk.
McAnulty yesterday confirmed only Auckland’s Watercare and Wellington Water will now transfer over.
The decision “provides a common-sense approach”, McAnulty said.
Riach agreed.
“It’s the outcome we had hoped would be reached.”

• By Jonathan Leask