Few water leaders have watched a national reform program unfold from as close a vantage point as Jon Lamonte. The former Chief Executive of Watercare, New Zealand’s largest water utility, joined the sector in his sixties after a career spanning defense, London Underground, Greater Manchester transport, and Sydney’s first driverless metro. On this week’s Exec Exchange with Piers Clark, he traces New Zealand’s turbulent journey through three successive reform programs and explains why the current model, imperfect as it may be, is the one that finally stuck.

A fragmented starting point

When Lamonte arrived at Watercare, the utility served Auckland’s 1.6 million residents, roughly a third of New Zealand’s population, as an end-to-end supplier that had evolved from a bulk water engineering firm into a customer-focused, increasingly data-driven organization. The rest of the country looked very different: around 70 councils, almost all running their own small water operations, with all the diseconomies of scale that implies and, in Lamonte’s words, years of neglect to overcome.

Three Waters and the limits of compulsion

The Labour government’s “Three Waters Reforms” proposed consolidating the country into four compulsory regional entities, with Lamonte slated to lead the largest, covering Auckland and Northland. The plan foundered on two fronts. Compulsion proved deeply unpopular with local councils, and co-governance arrangements with Māori became contentious, less because of involvement itself than a perception among some that co-governance implied co-ownership. A revised “Affordable Water Reforms” package expanded four entities to ten to give councils more voice, but the October 2023 election swept the legislation away before it could take effect.

Local Water Done Well

The incoming coalition government replaced compulsion with volition. Under “Local Water Done Well,” councils form their own groupings, without a co-governance element, and Watercare was held up as the exemplar. Lamonte now sits on the boards of two new entities: Tiaki Wai, the successor to Wellington Water, and Waikato Waters, which will unite six and potentially seven councils into the largest grouping in the country. The result within a year or so will be around 40 water entities of varying sizes, structures, and operating models.

Regulation, funding, and reasons for optimism

Lamonte suggests the real gains lie in what arrived alongside the restructure: a dedicated drinking water regulator, Taumata Arowai, now extending to wastewater; economic regulation through the Commerce Commission, initially via information disclosure; and access to local government funding agency debt, freeing entities from council balance sheets that were nearing their ceilings. Larger service areas bring economies of scale, and long-deferred investment can finally begin.

Is 40 entities where New Zealand wanted to land? Probably not, Lamonte concedes, and further consolidation seems likely over the next decade. But his central lesson travels well beyond New Zealand: lasting reform means bringing councils, communities, and Māori iwi along on the journey, at a price people can accept. Slow and steady, it turns out, is what survives elections.