In 2020 the government announced it was looking at a move away from councils managing and operating the three water services, and having separate entities in charge of delivering this key lifeline.
A large amount of analysis about how things could be improved has been undertaken based on information provided by councils across the country. Modelling suggested that between one and four entities will provide the most efficiencies to deliver three water services. It says the reforms could result in an additional 5,800 to 9,300 jobs and GDP increasing by up to $23 billion dollars.
The reforms provide opportunities for a step change in the way iwi/Māori rights and interests are recognised. These are woven throughout the new system with statutory recognition of the Treaty of Waitangi and Te Mana o te Wai, and creating a mana whenua group in the governance of each entity with equal rights to local government.
The proposed changes are wide-ranging:
- Establish four, publicly-owned water services entities to provide safe, reliable and efficient three waters services, with protections against future privatisation
- The entities will own and operate three waters infrastructure on behalf of territorial authorities, including transferring ownership of three waters assets
- Independent, competency-based boards to govern each entity
- A suite of mechanisms to protect and promote iwi/Māori rights and interests
- An economic regulatory regime to protect consumer interests and provide strong incentives for performance
- Stewardship arrangements for the new system to ensure it adapts to shifts in national objectives and priorities and remains fit for purpose
- The new entities would officially begin life on 1 July 2024. Local authorities would remain responsible for these services to that point.
These are high-level decisions about the number of entities, the boundaries, their organisation form and their governance. A lot of the more operational aspects are still being worked through and will be resolved as legislation is developed over the next year.
Palmy forms part of proposed Entity C
The government has agreed to preferred options for the boundaries of these four entities. It considered shapes and sizes, sufficient asset and customer base to be financially sustainable, have economically efficient scale, and deliver services at an affordable price to operate effectively in relation to water catchments and achieve environmental outcomes to engage meaningfully with iwi/Māori.

This map shows the preferred entity locations; the areas numbered 1, 2 and 3 are still subject to continuing discussions with local government and iwi on which entity they should fall in. The monetary value next to each entity is what the household cost would be in 2051 with reforms, or without reforms.
It's proposed that local authorities will own the entity on behalf of their communities and mana whenua will have a joint oversight role. Legislation will protect against future privatisation. Local authorities and mana whenua will appoint representatives to their Regional Representative Group via a nomination and voting process.
The entities will still be required to consult on strategic direction, investment plans, prices/charges etc.