New Zealand’s water sector is at a turning point. In too many communities, ageing drinking water, wastewater and stormwater systems are struggling – leading to leaks, pollution, and hefty repair bills for ratepayers​.

Recognising these challenges, the government has introduced “Local Water Done Well”, a comprehensive reform initiative to upgrade infrastructure, improve service quality, and secure sustainable water management for the future.

This blog post provides an overview of the Local Water Done Well reform and its significance, and explores how councils and water utilities can tackle ageing networks and non-revenue water (NRW) losses. We’ll discuss how to operationalise the new legislation at a tactical level for measurable improvements, innovative financing and contracting models (like performance-based NRW reduction contracts), and highlight successful case studies from abroad. By the end, it will be clear how this reform can drive positive change – and how specialists like Aqua Analytics are ready to assist New Zealand’s councils and utilities in making water services truly “done well.”

Why Water Reform? Ageing Pipes and Mounting Challenges

New Zealand’s water infrastructure has suffered from decades of underinvestment, leaving a legacy of ageing pipes and treatment plants due for renewal. Industry estimates suggest the country needs to invest on the order of NZ$120–185 billion over the next 30 years to upgrade and expand water systems​. Much of the network was laid mid-20th century or earlier, and some pipes in use are over 100 years old​. As pipes reach the end of their life, failures become more frequent – water mains burst, sewers overflow, and service interruptions and leakage levels rise.

In Wellington, for example, the water utility reported that its pipes are “ageing at a faster rate than we can replace them,” with numerous mains in the capital region now over a century old​. The result has been a rash of pipe bursts and leaks: at one point in early 2024, Wellington Water was dealing with over 3,000 leaks, a situation that demanded urgent intervention and funding to bring under control​.

Ageing three waters infrastructure (drinking water, wastewater, and stormwater) doesn’t just inconvenience residents – it carries serious public health and environmental risks. In recent years, thousands of Kiwis have been issued boil-water notices or fallen ill due to substandard drinking water​, and communities have endured sewage on streets and unswimmable beaches when sewer or stormwater systems fail. These issues underscore why reform is needed. As the National Party’s water policy described, the status quo of failing systems has led to “pollution, wastage and massive bills for ratepayers”​.

Simply put, many local councils on their own have struggled to fund and manage the necessary upkeep of their water networks under the old model.

Local Water Done Well emerged as a response to these mounting challenges – aiming to chart a new course that fixes ageing infrastructure while keeping water services under local control. The previous government’s Three Waters Reform (which was later rebranded “Affordable Water”) had proposed shifting assets from councils to four large entities, but it faced public backlash and was repealed in early 2024. In its place, the current government’s Local Water Done Well programme seeks to “address Aotearoa New Zealand’s long-standing water infrastructure challenges”​ and restore confidence that safe, reliable water services will be delivered. Crucially, it strives to do this without stripping local ownership.

Local Water Done Well not only keeps water in local ownership and control but also provides a pathway for significant infrastructure upgrades.

Councils retain ultimate responsibility for water service delivery under Local Water Done Well​ – but with stronger direction, new funding tools, and clear performance standards to ensure we don’t simply revert to the old ways that weren’t working​.

What is “Local Water Done Well”? – Overview and Significance

Local Water Done Well is the central government’s plan to reform how drinking water, wastewater and stormwater services are delivered across New Zealand. Announced in December 2023, it replaces the prior Three Waters reform programme while aiming to achieve similar outcomes in terms of safe drinking water, environmental protection, and sustainable infrastructure​.

The significance of this initiative lies in balancing local control with nationwide standards and support. Under the programme, water assets remain owned by local councils (avoiding the controversial “mega-entities”), but councils are now required to meet stricter water quality rules, invest adequately in infrastructure, and operate under greater regulatory oversight​​.

In short, Local Water Done Well provides a new framework where local ownership is preserved, yet accountability and investment are ramped up to ensure communities get the quality water services they need.

The reform is being implemented in three stages, each with its own legislation​:

  • Repeal of previous water services legislation: In February 2024, Parliament passed the Water Services Acts Repeal Act, which eliminated the Four Entities model by repealing the Water Services Entities Act 2022 and related laws. This effectively restored council ownership and control of water services, addressing public concern over the “asset grab” of Three Waters. However, the repeal was just step one – government made clear that simply reverting to the old structure without further change would not solve the underlying issues.
  • Establishing the framework and transitional arrangements: The second stage, passed as the Local Government (Water Services Preliminary Arrangements) Act 2024, lays the groundwork for the new water services system. Enacted on 2 September 2024, this law introduced key measures to drive better planning and governance of water services. Notably, it requires every council (or group of councils) to develop a Water Services Delivery Plan by 3 September 2025. These plans must detail how the council will deliver safe, sustainable water services that meet regulatory standards, support growth, and remain financially viable. Councils have to assess the state of their water assets and operations, quantify investment needs, and outline how they will finance and deliver those improvements. The Act also streamlines processes for councils to consider new service delivery models – for instance, making it easier to form jointly-owned council-controlled organizations (CCOs) for water – and requires ring-fencing of water revenues so that rates or charges for water are spent only on water infrastructure. In Auckland, a specific provision even enables a new financially sustainable model for Watercare (Auckland’s water utility), including appointing a Crown monitor to oversee its performance. Overall, this stage-2 law provides the “preliminary arrangements” that push councils to plan collaboratively and transparently for the massive upgrades needed.
  • Establishing enduring settings: The third and final stage of legislation – often referred to as “Bill 3” of the Local Water Done Well programme – was introduced to Parliament in December 2024 and is expected to pass by mid-2025. This law will implement the enduring regulatory and governance framework for water services going forward. According to legal analysis, the purpose is to establish a flexible, cost-effective system for local government water services that is financially sustainable and meets health and environmental standards. Among other things, the Bill defines how new regional water CCOs can operate, sets up a planning and accountability regime (including Water Service Strategies and annual reporting requirements for any new water entities), and extends certain ministerial powers to intervene if water providers underperform. It also provides tools for water providers such as the ability to set water charges (separate from council rates) and access private land for infrastructure works under defined conditions. Importantly, this stage will lock in economic regulation for the sector: the Commerce Commission is being empowered to oversee water services similar to how it regulates electricity lines and gas pipelines. This ensures that water utilities cannot under-invest or divert funds – revenues must be reinvested into water infrastructure, with information disclosure and price-quality regulation providing transparency and protecting consumers. The Minister for Local Government, Hon. Simeon Brown, has stated that these enduring settings are about giving local authorities “certainty [they need] to deliver water services, while minimising costs on ratepayers”. In practical terms, councils will have clear expectations to meet, but also new avenues to achieve them, as we explore next.

The significance of Local Water Done Well is that it creates a pathway to environmental and financial sustainability for quality water services across New Zealand​. It addresses the core problems of the old model by ensuring dedicated funding (through ring-fencing and improved financing options), stronger oversight (through regulators and potential government intervention if needed), and encouraging scale and collaboration (via regional service delivery models) – all while keeping water assets in public hands.

For council water managers, engineers, and policymakers, this reform is a call to action to up their game: to thoroughly understand the condition of their networks, plan upgrades strategically, reduce water loss, and embrace new models that can deliver better outcomes for communities.

Prioritising Ageing Infrastructure – The Role of Condition Assessment

One of the immediate challenges councils face under the new regime is how to tackle ageing water networks with limited resources. With so much infrastructure approaching or past its design life, a critical question is: which pipes, plants or pumps do we fix first?

This is where asset condition assessment and asset management come to the forefront. The Local Water Done Well framework, through the required Water Services Delivery Plans, compels councils to take stock of their assets and provide an assessment of their water infrastructure – how much they need to invest and how they plan to finance and deliver it. In other words, councils must move from reactive patch-ups to proactive, data-driven asset management.

Conducting systematic condition assessments of water supply pipelines, sewer lines, and related facilities allows councils to identify which assets are most deteriorated or high-risk. For example, utilities can grade the state of their underground assets by using tools like CCTV inspections, acoustic leak detection, and pipeline condition assessment techniques.

By knowing where the worst leaks or weakest pipes are, councils can prioritise renewals and repairs that yield the most significant benefit – preventing an imminent water main burst or reducing substantial leakage. Prioritisation is essential given budget constraints; it ensures that every dollar invested goes to the highest-need projects first, delaying the replacement of assets that are still in acceptable condition and focusing on the ones at risk of failure.

New Zealand’s recent experience underscores the importance of this approach. In Wellington, years of underinvestment led to a large backlog of leaking pipes, and it became clear the utility couldn’t replace everything at once. Wellington Water developed a straightforward prioritisation process to ensure repair crews focus on the most significant leaks – those losing tens of litres a minute or posing a risk to supply – while lower-priority drips are deferred until resources allow. This triage approach, guided by data on leak flow rates and pipe criticality, is a tactical form of condition-based prioritisation in its most simple form. It has paid off: by mid-2024, with increased council funding and an accelerated leak repair schedule, Wellington had reduced its annual water loss slightly (from an estimated 44% down to 41% of supply) and cut the number of open leaks by 57% over eight months. While there is still a long way to go, this progress shows how focusing effort on the worst parts of the network first can start to turn the tide on an ageing system.

Across the country, many councils must undertake similar asset condition reviews as part of their Water Services Delivery Plans. These plans must include baseline information about water assets and operations, current performance, and projected capital investment needs. Essentially, each council (or collective of councils) has to present a roadmap for infrastructure renewal and maintenance that meets regulatory standards. Condition assessment is the foundation of that roadmap – you can’t plan to fix what you haven’t measured. By identifying pipes with the highest break frequencies or poorest condition based on advanced non-destructive technology, councils can schedule their renewal programs to prevent failures before they happen. This averts disruptive outages and public health incidents and is cost-effective in the long run. Fixing or replacing a pipe just before it fails (or before leakage gets out of control) is typically cheaper than emergency repairs after a burst and the consequential damage to roads or property.

In summary, the new water reform expects councils to know their assets intimately and plan upgrades wisely. For water engineers, this means ramping up asset condition assessment programs now if they haven’t already. Tools like asset management information systems, GIS mapping of break history, and advanced analytics (predictive modelling of pipe failure based on age/material) can all support this effort. A robust understanding of network condition will inform everything from renewal capital works scheduling to setting realistic budgets and tariffs. It also feeds directly into tackling one of the biggest issues highlighted by Local Water Done Well – New Zealand’s high levels of non-revenue water.

Plugging the Leaks: Confronting New Zealand’s High Non-Revenue Water

One startling symptom of New Zealand’s ageing water networks is the high rate of non-revenue water (NRW) – water that is produced and enters the distribution system but never reaches a paying customer. NRW includes physical losses (leaks and overflows) as well as commercial losses (water that is not billed due to metering inaccuracies or unauthorised use such as theft).

In many New Zealand towns and cities, a significant portion of treated drinking water simply goes missing. How significant? Research published in 2025 showed that New Zealand’s leakage levels average about 22% of water supplied, which is far worse than leading countries like the Netherlands (5% loss) or Germany (6%). In fact, when comparing an internationally recognised metric called the Infrastructure Leakage Index (ILI) – which benchmarks leak performance relative to system size – New Zealand ranked near the bottom among 15 OECD countries, with a median ILI of 2.7 compared to Denmark’s world-class 0.7.

These figures make clear that New Zealand has a major water loss problem by developed-world standards. Literally, tens of billions of litres of treated water are being wasted each year through leaky infrastructure or unmetered usage – water that costs money to treat and pump but yields no revenue.

The consequences of high NRW are multi-faceted. Economically, it’s estimated around $122 million per year is essentially poured down the drain due to the volume of water lost in our systems. Environmentally, that’s wasted water that could have been conserved and extra strain on water sources, especially during dry summers.

Operationally, high leakage can reduce network pressure and firefighting capability and is often a sign of weak spots that could erupt into bigger main breaks. Moreover, if a fifth (or more) of the water supply is non-revenue, it means customers are ultimately paying higher rates to cover the inefficiency – or maintenance is underfunded because a lot of production isn’t billed.

Reducing non-revenue water is, therefore, a key priority for improving both the financial and environmental sustainability of water services. The Local Water Done Well initiative brings NRW into focus by calling for sustainable infrastructure management and benchmarking against best practices.

Encouragingly, some progress is already being made. The recent Public Health Communication Centre briefing notes that places like Wellington have begun to get a handle on their leaks and that nearly 75% of New Zealanders support the use of water metering – a tool that can greatly aid in detecting private-side leaks and managing consumption. Universal metering is one strategy many councils may need to consider: as Wellington Water acknowledged, “we cannot accurately track current water loss without universal metering”.

Many districts historically have had flat-rate water charges or no meters for residential connections; introducing meters not only promotes fairness and conservation but helps pinpoint leaks (for example, a spike in night-time usage at a metered property can indicate a hidden leak on the customer’s side).

Beyond metering, effective NRW reduction strategies include a combination of operational fixes and capital investments:

  • Active leak detection and repair programs: Proactively finding leaks that don’t surface is crucial. Technologies like acoustic listening devices, correlators, and smart sensors can locate underground leaks so repair crews can fix them before they worsen. Regular “leak sweeps” of the network, especially in old pipe zones, should become routine. Wellington’s case showed that dedicating teams to find and fix leaks and increasing funding for repairs had a measurable impact in just months.
  • Pressure management: Many NZ water systems have more pressure than needed at off-peak times or in lower elevation areas, which exacerbates leakage and pipe bursts. Installing pressure reducing valves and using smart control (sometimes called “network calming”) can moderate pressures to optimum levels, significantly cutting down leak rates and stress on pipes. Aqua Analytics, for example, works with utilities on pressure optimisation to extend asset life and reduce bursts.
  • District metering and network monitoring: Creating District Metered Areas (DMAs) – sections of the network where inflows and outflows are metered – allows water managers to quantify NRW in each zone and narrow down where losses are occurring. Modern IoT devices and flow meters can give near-real-time insight into water balance, so that if one DMA’s night flow jumps, the utility knows to dispatch a leak detection crew there. Over time, this data-driven approach can systematically drive down losses.
  • Targeted pipe renewal: Some leaking pipes won’t be cost-effective to keep patching. A component of any NRW strategy is to renew the worst mains – those with chronic leaks or breaks – rather than endlessly repair them. Deciding which pipes to replace ties back to the condition assessment effort discussed earlier. The goal is to replace “low-hanging fruit” pipes that cause a disproportionate share of water loss (for example, that old cast iron main that’s had three leaks this year) thereby permanently eliminating those leaks.
  • Addressing unauthorised consumption or meter errors: While physical leakage is usually the bulk of NRW, councils should also tighten up billing by checking for any illegal connections or busted customer meters that under-register. Ensuring every drop delivered is accounted for either in metered sales or identified losses is part of good water governance.

Notably, reducing NRW has compounding benefits. Every cubic meter of water saved through leak reduction is a cubic meter that doesn’t need to be produced – saving treatment chemicals and energy (and therefore carbon emissions) and freeing up capacity to support growth or resilience in droughts. It’s one of the most cost-effective “new” water supply sources.

In the context of Local Water Done Well, demonstrating progress on NRW will likely be an essential performance indicator for councils. High water loss could draw regulatory scrutiny in the future. 

The bottom line for New Zealand’s water managers is that tackling NRW is no longer optional – it’s essential for financial viability and public trust. The good news is that with modern techniques and a focus from both central and local government, significant reductions are achievable, as our next section on case studies will illustrate.

Conclusion: A Path Forward – Local Solutions, Global Expertise

“Local Water Done Well” represents a pivotal opportunity to put New Zealand’s water services on a path to long-term sustainability. This reform can deliver safer drinking water, healthier environments, and more resilient communities by addressing ageing infrastructure, mandating better asset management, reducing water loss, and enabling smarter financing. Crucially, it achieves this while keeping water assets in the hands of local councils – ensuring communities maintain a say, but with stronger support and oversight from central authorities to ensure water services are financially sustainable and meet modern standards.

The charge is clear for municipal water managers, engineers, and policymakers. Now is the time to assess your infrastructure, set ambitious yet attainable targets (for example, bring that 25% leakage down towards 10% over time, or renew that oldest 5% of your pipes), and use the new tools at your disposal. Develop your Water Services Delivery Plans not as a compliance tick-box, but as a strategic blueprint that will guide investment and operations for the next decade.

  • Engage your communities – they support measures like water metering and expect action to stop leaks.
  • Collaborate with your fellow councils – together, you can achieve economies of scale and tap into more significant expertise. And don’t hesitate to draw on industry partners and international best practices to get the job done.

As the reform progresses, success will be measured in tangible outcomes: fewer boil-water notices, reduced sewage overflows, lower percentage of water lost, and ultimately public confidence that the system is improving.

The government has done its part by creating the framework and increasing funding avenues. The onus is on local bodies and their industry collaborators to deliver results. It’s a significant undertaking that comes with the benefit of global knowledge and modern technology to guide the way.

This is where Aqua Analytics is ready to help. With deep expertise in water network management, non-revenue water reduction, and data-driven decision support, Aqua Analytics is a valuable partner to large and small councils across New Zealand. Whether it’s implementing a district metering program for a metropolitan utility, conducting network-wide asset inspection prioritisation plans for a medium-sized district’s pipe network, or helping a small council set up a smart leak detection and pressure management regime – our team has the experience and tools to turn reform objectives into on-the-ground improvements.

Our approach is to empower local water authorities with the insights and technology they need to make informed decisions and demonstrate progress. In the spirit of Local Water Done Well, we collaborate closely with your staff – transferring knowledge, building local capacity, and ensuring solutions are tailored to your community’s needs.

The challenges of ageing infrastructure and water loss may seem daunting, but they are manageable with the right plan and partners. New Zealand is poised to leap forward in water service delivery – a transformation that will protect public health, support economic growth (through reliable services and housing development), and safeguard precious water resources for future generations. It’s an exciting time to be a water professional in Aotearoa, as we blend local solutions with global expertise to indeed do water “well.”

Councils and utilities should seize the momentum of the Local Water Done Well reforms to kickstart projects that have long been on the wish list – be it that critical pipeline renewal, a comprehensive leak detection sweep, or setting up a regional water consortium for shared strength. With supportive legislation, better financing, and proven strategies at hand, there are no excuses for delay. Let’s turn policy into performance.

Contact us to learn more about how we can assist your utility or council navigate these reforms and achieve tangible water savings and service improvements. The journey to a better water future is underway – let’s get it done, and done well.