Ashburton Contracting Limited (ACL) is “caught in a web of bureaucracy” that could directly impact ratepayers.
ACL and the Ashburton District Council have raised serious concerns with the Government’s finance and expenditure select committee on the draft Water Services Legislation Bill, the next phase of the Three Waters reforms.
The bill’s purpose is to establish and empower the new water services entities by setting out their functions, powers, obligations, and oversight arrangements.
ACL and the council are concerned the reform intends to strip ACL, a council-controlled organisation, of its assets and resources associated with the delivery of the council’s water and wastewater services and transfer them to the new Water Services Entity covering the bulk of the South Island.
ACL chairperson Alister Lilley said if a privately-owned company had won the tender for the Ashburton District’s Three Waters contract, “it wouldn’t be an issue”.
“Because ACL’s ownership model is community-owned, our contract won’t be honoured,” he said.
“It’s discrimination. ACL has been caught in a web of bureaucracy.
“It’s unfair and unjust.”
The company want the contract, “won fairly at the tender box”, to be honoured by any future entity, Lilley said.
Losing the contract would be in the vicinity of $2.5m of value impact to the company, he said.
ACL also tenders for work in the private sector, but a likely reduction in profit would reduce its dividend, an average of $600,000 each year the council uses to offset general rates.
ACL chief executive Gary Casey said if the Government persists in “grabbing our assets and our people” it will not only be detrimental to the company’s profitability but also the health of Mid Canterbury residents.
“The model assumes the water entities will have sufficient resources – staff, plant, IT, and intellectual knowledge – available to run a geographically and diverse network from day one.”
The vast majority of ACL staff have no desire to move into a government-controlled entity, Casey said, and replacing them “will be near impossible”.
“This is a recipe for a massive failure and will put the entire network at extreme risk.”
ACL had the full support of the council, the 100 per cent shareholder of ACL on behalf of the community.
Ashburton Mayor Neil Brown suggested an amendment to provide a distinction between CCOs that solely perform maintenance operations, like ACL, from those that have ownership, design or asset management functions.
“All CCOs are not the same,” Brown said.

• By Jonathan Leask