Turning the Tide:

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.

The Water New Zealand 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:

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.

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.