Wellington isn’t the only city with financial water woes - Auckland Council is planning a $130 million bailout for its water business.

Councillors are being called to an extraordinary governing body meeting on Thursday to approve a $130m “largely temporary cash deficit” for Watercare.

The water company has asked the council if it can borrow a further $130m this financial year to cover ongoing costs from last year’s storms, the Ōrākei sewer collapse in Parnell, and rising costs of the Central Interceptor giant wastewater pipe.

Last December, Watercare announced the cost of the Central Interceptor had risen from $1.2 billion to $1.52b, of which an additional $50m is required this financial year.

The cost of the Central Interceptor wastewater tunnel has risen from $1.2 billion to $1.52b. Photo / Watercare

Not all of the $80m of insurance claims from the Auckland Anniversary Weekend flooding and Cyclone Gabrielle are expected to come through this financial year, and the Ōrākei sewer collapse is estimated to cost $32m.

In a paper prepared for councillors, council and Watercare staff say the costs of these unforeseen events are ongoing in the current year and unavoidable.

Watercare already has plans to borrow $485m this year to fund a $1b capital work programme, with the rest of the money coming from water bills and charges to developers.

The council’s treasury group has confirmed the extra $130m can be borrowed without having much of an impact on the council’s debt.

Wellington Water workers repair a broken pipe. Photo / Georgina Campbell

Wellington Mayor Tory Whanau has flagged “tough decisions” by reprioritising projects and savings elsewhere to significantly increase spending on the city’s water infrastructure, including introducing water meters, or user-pays which Auckland has had for more than 20 years.

Auckland Council’s bailout comes as Mayor Wayne Brown is urging the Government to give a Crown guarantee for new debt by Watercare.

Brown has said that if Watercare’s debt remains on the council’s books the water company will be limited by how much it can borrow for a $13b, 10-year capital programme.

Bills will either double over the next four years to $2720 or the city will have to stop fixing the pipes, he said.

The Government is scrapping Labour’s Three Waters reforms, which would have taken Watercare’s debt off the council’s books, but has not said how it will deal with debt issues for Watercare and other councils.

Bernard Orsman is an award-winning reporter who has been covering Auckland’s local politics and transport since 1998. Before that, he worked in the parliamentary press gallery for six years.