New Zealand’s water sector is entering a new chapter—one defined by scale, urgency, and opportunity. With the introduction of the Local Water Done Well policy, the country is shifting from a fragmented model of local delivery to a more unified approach, establishing new water service entities to deliver safe, reliable, and sustainable infrastructure.
But this isn’t just a governance change. It’s a call to rethink how we plan, procure, and deliver billions of dollars’ worth of water assets. And the scale of what’s coming is unprecedented.
Across 58 councils, long-term plans forecast $38.6 billion in spending on three waters infrastructure between 2024 and 2034—a 57% increase from the $24.6 billion planned for 2021–2031. That’s a step change in investment, and it demands a step change in how we do business.
To meet this moment, the sector must embrace smarter procurement, build delivery capability, and foster collaboration across councils, suppliers, and regulators. Fortunately, we’re not starting from scratch. Lessons from the UK’s Water AMP8 programme, insights from Water New Zealand’s Pulse Survey, and reviewing New Zealand’s approach to Local Government procurement offers a clear roadmap for reform.
This was first published in the Water New Zealand Water Journal, Issue 241.
The Water NZ Pulse Survey (March 2025) reveals a sector under strain. Nearly half of respondents reported deteriorating business conditions. Over a quarter of contracts were paused, deferred, or cancelled. And 55% of organisations had active vacancies - mostly in mid- and senior-level roles.
Despite councils signalling increased spending, the industry continues to struggle with delivery. Historically, only 75% of long-term plan budgets have been spent. That’s not just a missed opportunity - it’s a warning sign.
If we’re going to scale up investment, we need to fix the foundations. And that starts with procurement.
The UK’s AMP8 programme offers valuable lessons. Faced with similar pressures - rising investment, tighter regulation, and public scrutiny - British water companies and suppliers developed a Framework for Change built around four key focus areas:
1. Market capacity
The supply chain must be ready to deliver more work, more consistently. But visibility of future projects is poor, and procurement practices often discourage participation. Suppliers need confidence in the pipeline to invest in people, equipment, and innovation.
2. Client capability
Many councils and new entities lack the scale and expertise to manage complex infrastructure programmes. Building capability - through training, shared services, and strategic partnerships - is essential to ensure projects are delivered on time and on budget.
3. Operational efficiency
Legacy systems, siloed teams and fragmented governance slow down delivery. Streamlining project management, enabling early contractor involvement, and adopting modern delivery models can unlock significant efficiencies.
4. Regulatory alignment
Performance targets are tightening, and funding is increasingly tied to outcomes. Contracts must align with strategic objectives, and suppliers need to be part of the solution, not just the delivery mechanism.
Procurement is often seen as a technical function, a series of steps to select a supplier and sign a contract. But in a sector facing transformation, procurement must become a strategic practice. It’s not just about buying services; it’s about shaping outcomes.
Here, traditional procurement has relied heavily on competitive tendering and lowest-cost selection. These approaches, while familiar, often fail to deliver long-term value. They discourage innovation, push risk onto suppliers, and create adversarial relationships.
Lessons from AMP8 show that a different approach is possible, and necessary.
Early engagement
Rather than presenting suppliers with rigid specifications, councils should involve them early in shaping the scope and delivery model. Early Contractor Involvement (ECI) improves buildability, reduces risk, and fosters trust. It also helps suppliers bring forward innovations that might otherwise be missed.
Bundling and sequencing
Instead of procuring isolated projects, councils should group works into coherent programmes. This creates scale, reduces transaction costs, and allows suppliers to plan and invest with confidence. It also helps smooth delivery profiles, avoiding the boom-bust cycles that have historically plagued the sector.
Risk-sharing
Contracts should allocate risk to the party best able to manage it. AMP8 has shown that pushing all risk onto suppliers leads to inflated prices and reduced participation. A collaborative approach to risk, supported by clear mechanisms for joint problem-solving, can improve outcomes and reduce costs.
Transparency and pipeline visibility
This is where we have a real opportunity to lead. By providing clear, consistent visibility of upcoming work - across councils, regions, and years - the sector can give suppliers the confidence to invest, scale up, and meet demand. Transparency isn’t just good governance, it’s a growth strategy. Local government Water Service Delivery Plans, due by September 2025, will offer the first comprehensive view of sector-wide priorities, investment profiles, and the project pipeline across all of Local Government, providing the transparency needed for suppliers and contractors to invest, scale up, and meet the growing demand.
The scale of investment ahead requires a supply chain that’s not only ready, but resilient. That means supporting suppliers to grow, innovate, and deliver. It means creating the conditions for long-term partnerships, not short-term transactions.
Agile procurement practices, like open-book contracting, collaborative delivery models, and outcome-based evaluation, can help. But councils also need to invest in their own capability. Procurement teams must evolve from process administrators to strategic advisors. That means training, tools, and a culture shift.
It also means working together. Shared services, regional alliances, and national coordination can help councils pool expertise, reduce duplication, and speak with one voice to the market.
Innovation is critical to achieving long-term resilience. Yet, the British Waters Supply Chain Task Force, establised in repsonse to a stated desire from British Water members to try and secure a better deal for the supply chain by addressing blockers to prosperity, found that most water companies operate in silos, with slow trial processes and limited collaboration.
The 600 million pound Ofwat Innovation Fund, an England and Wales Water Service Regulation Authority 10-year (2020-30) Innovation Fund to grow the sector's capacity to innovate, has helped. But its scale is insufficient to meet urgent challenges like NetZero 2030.
To unlock innovation, councils must create shared trialling platforms, define success criteria, and foster a culture of openness and tolerance for failure. They must also align incentives, so that suppliers are rewarded for delivering better outcomes, not just lower costs. New Zealand’s transport sector offers a useful precedent for coordinated procurement.
The New Zealand Transport Agency (NZTA), through regional alliances like the Northland Transportation Alliance (NTA), has demonstrated how councils can work together to develop shared procurement strategies. By aligning investment priorities, bundling contracts, and engaging the market collectively, the NTA has improved supplier confidence, attracted more competition, and delivered better value.
Water reform won’t be easy. Councils face funding constraints, competing agendas and limited procurement capacity. Cultural inertia and legacy practices can slow progress. But the foundations are in place.
Aotearoa New Zealand’s procurement rules are flexible. Agencies like the Infrastructure Commission and MBIE actively support agile, collaborative approaches. And the sector has shown it can adapt, through initiatives like SCIRT alliance in Christchurch and Eastern Busway for Auckland Transport.
What’s needed now is leadership. Councils must commit to long-term planning, invest in capability, and work together to build a stronger, more resilient water sector.
Local Water Done Well offers a once-in-a-generation opportunity to reshape New Zealand’s water sector. With $38.6 billion in planned investment over the next decade, the stakes couldn’t be higher.
By adopting agile procurement practices, building supply chain capability, and providing transparency to support investment and growth, councils and new entities can deliver safe, sustainable, and affordable water services.
The time to act is now. Standing still is not an option.
