Hamilton City Council
Te kaunihera o Kirikiriroa
To respond to Government direction and future-proof our water services, our Council has joined Waikato District Council in a joint water services company. The company is called IAWAI, or Flowing Waters.
Hamilton City and Waikato District Councils are forming a publicly owned, Council-controlled Organisation (CCO) to deliver water services across Hamilton city and Waikato district. The company is called IAWAI - Flowing Waters.
Hamilton City Council has delivered safe, high quality, well-maintained drinking water, wastewater and stormwater services to its community for many years. Like many councils, and especially high-growth metros, we face significant future funding challenges for waters infrastructure. This is a national issue, and Government introduced new requirements for councils as part of its Local Water Done Well policy to address this.
Local Water Done Well placed new requirements on councils, while offering new options to deliver water services and fund waters infrastructure.
Hamilton’s preferred long-term solution was a multi-council regional asset-owning waters company. In December 2024 Hamilton councillors voted unanimously to confirm its preferred option was a partnership with Waikato District Council, and on 29 May 2025, following public consultation, Hamilton City Council voted to form the joint company.
The new organisation will manage around 90,700 water connections (including non-residential connections) and invest around $3.3 billion on water infrastructure over the next decade.
IAWAI was incorporated in July 2025, with full operational responsibilities kicking in from July 2026. Both councils will transition water services, and around 270 staff, to the new entity over time.
Hamilton City Council is the largest water service provider in the Waikato and is the major contributor to economies of scale in an aggregated Waikato entity.
Hamilton has previous experience in considering aggregation of water services in the Waikato. In 2014/15 In November 2014 a study identified a CCO model provided significant cost savings for customers and councils. Progressing a CCO model for the region failed after Waikato withdrew, and Waipa elected not to continue to seek a joint model with Hamilton.
In 2023/24 water accounted for around 30% of the Council’s annual operating expenditure, 54% of the proposed capital expenditure over the life of the 2024-34 Long-Term Plan, and 30% of the assets owned by the Council.
The joint-CCO was the preferred option for Hamilton because:
In 2025/26 Council has separated waters related charges from the General Rate and Uniform Annual General Charge. The targeted rates are required to meet central government’s expectations for councils to separate water costs and revenue from the other services they provide, as part of the Local Water Done Well reforms.
The drinking water and wastewater targeted rates will be in place for 12 months, before the newly formed joint waters company with Waikato District Council assumes responsibility for delivering and charging for those services.
Click below to read more:
Council report 12 December 2024
Local Water Done Well business case
News release 24 September 2024
News release 12 September 2024
Previous Water Reform and Council submissions
Find out more about the water services we provide to Hamilton
In 2023 legislation was passed by the Labour-led Government to remove the costs of water services from councils (and transfer to new organisations) in stages. Following the 2023 election, the new coalition Government repealed this legislation.
The Labour-led Government’s reform intended to reduce future cost impacts for councils and the public through economies of scale in regional organisations. The National-led Government reform advised councils to self-determine future service delivery arrangements via a water services delivery plan (required to be submitted by September 2025).
Major structural change to the delivery of water services nationwide has been a focus of local and central government for some years. A water contamination issue in Havelock North in 2016 was the catalyst for Government review and inquiry.
A two-stage Government inquiry was held, the first stage focused on identifying the direct causes of the outbreak, the second looking at the wider regulatory context and ways to reduce the likelihood of another outbreak in the future.
The Inquiry found widespread systemic failure of water suppliers to meet the high standards required for the safe supply of drinking-water to the public.
In mid-2017 a Three Waters Review, in parallel to the Inquiry, raised further questions about how effective the existing regulatory framework and about the capability and sustainability of New Zealand’s water service providers. Later work identified massive funding shortfalls in waters infrastructure provision, with initial estimates of $185B over 30 years.
Between 2020 and 2022 the Labour-led Government introduced new water regulations, a new regulatory body (Taumata Arowai) and structural changes to delivery – creating new entities to take over water services delivery from councils.
Following the 2023 elections, the new National-led government repealed legislation relating to service delivery, replacing it with its Local Water Done Well policy. Councils were required to put the costs of waters back into their LTPs. This has had significant rating impacts for many councils.
In early 2024, Government announced councils (or groups of councils) must prepare a Water Services Delivery Plan for DIA approval. This plan, due by September 2025, includes 10-year high level projections and a detailed three-year plan. New legislation has been enacted to provide options for CCO arrangements and establishment of economic regulation.
High quality water services are crucial for protecting our environment, supporting public health, and enabling sustainable growth, while meeting our regulatory responsibilities. Like many councils, and especially high-growth metros, we face significant future funding challenges for waters infrastructure. This is a national issue, and Government has introduced new requirements for councils as part of its Local Water Done Well policy.
Government has introduced law changes which place new requirements on the way councils deliver water services. Councils (or groups of councils) must have an approved water services delivery plan by September 2025. Further new laws provide options for CCO arrangements and new economic regulation of water services. Additional funding (via the Local Government Funding Agency) is available for water services organisations which meet government requirements and for high growth councils. Any new waters organisation would deliver only drinking water and wastewater services – councils remain responsible for stormwater.
Council has identified a series of success factors it wants to achieve through any change to water services:
Meters provide a way to charge for water services based on usage rather than through household rates, and Government has indicated it sees metering as a logical approach for future water charges. Councils that have meters have also seen much better efficiencies in water usage. We’re limited on how much water we can take from the river, and we are required to promote efficient use of water. More efficient usage also means very expensive assets like our treatment plants can do the job for longer, which saves money down the track. There’s a lot of things to consider and any decision is some time away.
A CCO is an organisation that is ultimately accountable to Council but can run independently. A waters CCO would have a specific focus on drinking water and wastewater services and would have its own governing board and operational teams. The responsibility for stormwater would stay with Council. This is because how we manage our stormwater is so closely linked to how we manage other services such as roads and parks.
With the establishment of IAWAI there will be changes to how rates and water services are charged over the next couple of years. We can’t yet confirm what the total combined charges would be, but you won’t be charged twice for the same thing. The first stage is from July 1, 2025, as we are now splitting the costs of water services from general rates and showing it on your existing rates bill. The second stage would be when IAWAI is operating. It is expected they will ultimately bill the consumer directly (like your power company). Council would still charge rates, but they wouldn’t include any charges for services charged for by IAWAI.
Last updated 27 August 2025