Poor condition of Wellington's water assets could lead to costly insurance claims

Poor condition of Wellington's water assets could lead to costly insurance claims | Insurance Business

Poor condition of Wellington

The Wellington City Council (WCC) has been warned by Audit New Zealand that the city is at greater risk of burst pipes, interruption of water service, and higher infrastructure costs.

The government auditing agency has raised concerns with the council regarding its investments in the city’s three waters (drinking water, wastewater, and stormwater) infrastructure, the NZ Herald reported. It is related to WCC’s Long Term Plan, which is scheduled for public consultation soon, and is the second qualified opinion Audit NZ has given WCC in the span of a year regarding water.

According to audit director Karen Young, the city council did not take into consideration the conditions of water assets in guiding investment decisions, instead relying on age.

“Given the age of the three waters networks and recent asset failures, we consider it is unreasonable for the Council to use age alone as the basis to support and direct the renewal of its three waters infrastructure,” Audit New Zealand’s opinion read.

“This could result in more asset failures during the 10-year period of the long-term plan, reduced levels of service, and greater costs than forecast.”

Asset failures such as burst pipes can cause huge damage to property, which drives up insurance losses.

Meanwhile, Wellington Mayor Andy Foster said the Long Term Plan is facing challenges due to the city tackling an unprecedented number of issues. The city is funding a deeper assessment of Wellington’s water assets, with a much better view of the pipes’ condition likely to be available later this year.