When is water privatisation not water privatisation?

Answer: When the government says it’s not.

Water privatisation is on the agenda with the tabling in the House yesterday of Rodney Hide’s local government amendment bill.

The bill will allow private companies to own water infrastructure (dams, pipelines, treatment plans, you name it) for up to 35 years.  Although curiously the bill’s explanatory notes and the Government’s press statement explains this is not privatisation. Yeah right!

If 35 years isn’t privatisation, how long would a dam have to be in private ownership before the Government conceded it was privatisation? 50? 100? Help me out here.

The provisions are designed to encourage public private partnerships (PPPs) which internationally have become the favoured mechanism for privatisation of municipal water in recent years.  And in particular BOOT schemes (Build, Own, Operate and Transfer). The Local Government Act 2002 limits contracting out of water services to a period of 15 years and prohibits private ownership of municipal water infrastructure – both those will go under Hide’s bill.

Hide says the current provisions in the Local Government Act prohibiting the sale of Council water assets still apply. They would continue to apply to existing assets but not to new ones built under the new regime.

Alongside the desire to open up municipal water to private control, is another provision which would repeal the current obligation of councils to consult the public before contracting out public services to the private sector.

The Prime Minister stands up in Parliament and says “there is no privatisation agenda” as he did this week. But his Government is removing the democratic safeguards against privatisation of local government assets.  The other example currently before the House is the third super city bill’s repeal of the requirement for a majority approval in a binding referendum before the Ports of Auckland can be sold.

Put the privatisation and contracting out agenda alongside Key’s corporatisation of Auckland local government by handing over 75% of the city’s operations and assets to hand picked commercial boards, and it is pretty easy to see what National-ACT are doing  to local government.

The bill contains a number of other elements we’ll be considering closely in the coming days: reducing councils’ obligations to consult the community, some requirement to focus on so-called core services (although most of Hide’s nutty core services and mandatory referenda ideas did not get through Cabinet), financial transparency and pre-election reporting.  The bill could get its first reading as early as Tuesday.