Drinking Water Assistance Programme
Report 1.2 – Detailed report on implementation arrangements for discussion with
government officials
9 August 2005
Published in June 2006 by the Ministry of Health, PO Box 5013, Wellington, New
Zealand
ISBN 0-478-30002-6 (Web)
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson
Page 1
Drinking Water Assistance Programme
Report 1.2 - Detailed report on implementation arrangements for discussion with
government officials
9 August 2005
1.0
Executive summary
This report is intended to provide the basis for discussion of eligibility criteria for a
proposed Drinking Water Assistance Programme (DWAP) targeting small water supplies
in more deprived localities. A summary report 1.1 is also available. It is proposed that the
DWAP will consist of:


a Technical Assistance Programme (TAP) based on collaborative groups of
drinking-water suppliers, administered by the Ministry of Health, assisted by
drinking-water assessors and other participants, to develop Public Health Risk
Management Plans (PHRMP). The PHRMPs are complementary to the new
Drinking-water Standards New Zealand (2005) (DWSNZ) and required by the
proposed drinking-water legislation. The RHRMP procedures will be based on the
publication “How to prepare Public Health Risk Management Plans (Ministry of
Health 2001, reprinted 2005). T he TAP will also aim to ensure optimum
performance of existing systems and assess the requirement for further capital
works.
A Capital Assistance Programme (CAP, or SWSS1-Water) where the TAP finds
capital works are justified and necessary. Proposed eligibility criteria will be subject
to consultation prior to being finalised and include public health efficiency
(investment per unit of public health gain), dis-economies of scale (whereby smaller
communities with high costs per household score higher) and ability to pay (as
calculated by the deprivation index). Capital assistance up to 90 percent of total
costs would be available. SWSS-Water would sit alongside the existing SWSSSewerage and the Tourism Demand Subsidy Scheme (TDSS), both overseen by
the Sanitary Works Technical Advisory Committee (SAWTAC).
Table 1 summarises the scheme processes and criteria.
1
Sanitary Works Subsidy Scheme
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson
Page 2
Table 1
Suggested framework and timeline for proposed DWAP
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson
Page 3
1.1
Implementation process
Ministry of Health staff will conduct focus group discussions with a representative
sample of key stakeholder groups, along with wider public consultation, starting in
August 2005.
Discussions are also possible during the LGNZ conference on 27 July 2005.
TAP assistance in the form of DVD/video and written material will be available through
Public Health Officers from 1 July 2005.
A seminar series for larger suppliers is planned for 2006/07 and input will be sought from
our colleagues in Australia and the USA.
A Cabinet paper on scheme arrangements is then proposed for the end of 2005 with
confirmed scheme arrangements in the first quarter of 2006.
TAP funding to support development of technical assistance material is available from
2005/06. CAP funding will be available from 2006/07.
It is proposed that the DWAP would be subject to an effectiveness review at two-year
intervals.
2.0
Introduction
The new drinking-water standards are likely to come into effect on 31 December 2005.
Drinking-water legislation (‘Bill’) to amend the Health Act 1956 is being prepared and
may be introduced into Parliament later in 2005. The Bill requires best practicable steps
to be taken to achieve compliance with DWSNZ. Regardless of the passage of the Bill,
a DWAP will be introduced to assist drinking-water suppliers to comply with DWSNZ.
These proposed initiatives are a significant shift in the management of drinking-water
quality in New Zealand, from a quality control to a quality assurance approach.
The existing Sanitary Works Subsidy Scheme (SWSS) was set up in 2002 and is
managed by the Sanitary Works Technical Advisory Committee (SAWTAC), but to date
only sewerage and some minor fluoridation funding has been approved by Cabinet.
Sewerage funds have been significantly allocated but no fluoridation funds have been
applied for. A CAP (SWSS-Water) would sit alongside SWSS-Sewerage and the
Tourism Demand Subsidy Scheme (TDSS).
An officials’ working group with representation from the Ministry of Health (‘the Ministry’),
the Department of Internal Affairs, the Ministry of Tourism and Local Government New
Zealand have worked with policy, financial public health engineering and Māori water
and environmental contracted advisors, to prepare this discussion paper on
administrative processes and decision-making criteria.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson
Page 4
3.0
Aims of the DWAP
The aim of the DWAP is to achieve cost effective drinking-water standards compliance in
small, relatively deprived communities. Smaller communities face significantly greater
water supply upgrade costs per person because they lack the economies of scale of
larger schemes where basic infrastructure costs are spread across a greater population.2
Tangible costs can exceed tangible benefits for smaller communities to an order of 10
times. The bold horizontal line in Table 2 below indicates the estimated annualised
benefits per person of water treatment plant upgrade (from Rosevear 2004). The lower
curved line shows the estimated annualised costs per person of water treatment plant
upgrade. The intersection of these two lines indicates that treatment plant upgrade
becomes ’economic’ at a population of around 3000. Further estimations by the current
consultancy team of annualised costs based on a sample of 21 towns indicates that the
per person upgrade costs may be significantly higher.
Population size at which benefits of treatment plant upgrade exceed
costs.
So me uncertainty as to where
treatment plant upgrade is
'eco no mic' but at least greater
than 3000 po pulatio n
$120.00
$100.00
$80.00
Rosevear Analysis
2004
?
$60.00
Avg Annualised
cost / person
$40.00
?
Annual per person
benefit
$20.00
0,
00
0
-5
0,
00
0
-1
10
,0
00
5,
00
0
-5
,0
00
0
,0
0
1,
00
0
-1
50
0
50
-5
00
0
$-
<5
Annual per person upgrade costs and
benefits
Table 2
Community size
- - - - Further modelling of
a sample of 21 actual towns
in 2005 indicates that
Rosevear's per person costs
may be conservative
Source: P60, Rosevear 2004, Options for Safe
Drinking Water Systems
Failure of markets to deliver safe drinking-water potentially derives from a lack of user
awareness of the link between poor water quality and ill health episodes, but more
certainly because of inability and/or unwillingness to pay in smaller and poorer
communities.
2
For example, the capital upgrade costs for a B, C, or D graded plant could average $148 per person for the 50-500
population band compared with only $14 per person for the 10,000-50,000 population band. Rosevear 2004, Options for
Assistance for Safer Drinking Water Systems, p115.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson
Page 5
On an annualised basis the 2004 capital plus operating costs for compliance in all
systems up to 50,000 persons are estimated in the range of $12-46 million. Annualised
direct tangible benefits across all system sizes from avoiding illness, however, are
estimated at $13-37 million3 to which needs to be added other intangible benefits such
as maintaining the sanctity of public infrastructure, risks to New Zealand’s ’clean green’
image and the social cohesion and equity of access benefits. This indicates that any
public assistance needs to be targeted to ensure value for money.
There are 2223 water supply schemes registered in New Zealand, as shown in Table 3
below. The criteria for registration are currently more than 1500 person days per year
(equivalent to 25 persons for 60 days per year). An equal number again of drinkingwater schemes serving facilities with extensive public access are probably unregistered.
It is expected the Bill will require PHRMPs for supplies servicing more than 1500 person
days per year.
Registered drinking-water schemes servicing communities larger than 5000 persons
cover 82 percent of the population and generally deliver good quality water. Non
compliance in this group of communities greater than 5000 is largely due to monitoring
problems not generally posing public health risks sufficient to form the target of an
assistance programme. The best value for government investment may be found in the
500 to 999 band where the scheme is large enough to present risks to a significant
population, yet small enough to have significant problems arising from inability to pay.
Table 3 shows that 2109 zones cover smaller populations less than 5000. 79 percent
(1665) of these, serving a total population of 333,554, not complying with standards. An
equal population again may be served by unregistered, and most likely non-complying,
supplies.
Table 3
Registered water supply schemes data (Source: Drinking Water Register March 2005)
Dis tribution zone s
Population
Zone population
band
Pop
% Pop
Zone s
No.
% zone s
Com plying Dis tribution Zone s
Num be r of zone s
Population
Zone population
Com ply
Cum ulative
Non com ply non com ply Avg pop / non
comply zone
Pop
% Pop
Zone s
No.
Non com p
% zone s
<500
187,554
5%
1,834
83%
54,168
29%
305
17%
305
1,529
133,386
133,386
87
500Š999
74,872
2%
114
5%
29,313
39%
44
39%
44
70
45,559
178,945
651
2,343
1000Š4999
368,163
11%
161
7%
213,554
58%
95
59%
95
66
154,609
333,554
5000Š19,999
692,555
20%
73
3%
523,771
76%
56
77%
56
17
168,784
502,338
9,928
20,000Š49,999
970,989
28%
31
1%
692,615
71%
23
74%
23
8
278,374
780,712
34,797
50,000Š99,999
329,235
9%
5
0.2%
329,235
100%
5
100%
5
0
0
780,712
100,000+
875,300
25%
5
0.2%
875,300
100%
5
100%
5
0
0
780,712
3,498,668
100%
2,223
100%
2,717,956
78%
533
24%
533
1,690
780,712
TOTAL
Non-complying water supply zones are owned approximately one-third by local
authorities and one-third by schools. Refer Appendix One for further details. Local
authorities on average operate fewer, but larger, schemes and are likely to be principal
players in terms of risk reduction for the most people.
In addition to the 1665 non-complying registered systems, there are a large number of
un-registered systems. These include around 1500 known marae, possibly 1000
unknown marae and possibly 500 unknown private systems. The potential total target
market across both registered and un-registered scheme for DWAP could therefore be in
the order of 4000-5000 schemes. The registration gap indicates a particular challenge
3
Rosevear p62
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson
Page 6
for drinking-water assessors (DWA) to connect with the communities served by the
unregistered schemes.
4.0 Description of the Technical Assistance Programme (TAP) component
of the DWAP
The TAP scheme will be available to those on the Ministry of Health Register of
Community Drinking Water Supplies and Suppliers. The TAP uses development of
PHRMPs by Collaborative Capability Building Groups (CCBG) of operators as the
vehicle to ensure:

optimal use of existing resources

all practical steps are taken to comply with the DWSNZ.
While the standard is not flexible, compliance allows best practical steps to be taken into
account. A less technically complex solution may be rejected in favour of a simpler
approach, decreasing certainty of compliance with the standard, but increasing the
likelihood of sustainability.
PHRMPs are likely to be a requirement under possible drinking-water legislation of all
schemes servicing more than 500 people and are highly desirable for the suppliers
below that threshold, but above 1500 person days per year. The intended approach of
the CCBGs is collaborative learning between operators, using simple templated
methodologies, rather than PHRMPs produced by consultants and probably poorly
understood by the community. If optimisation of the existing plant after one year’s
operation proves insufficient to achieve standards compliance, the E.coli data captured4
in a report on TAP outcomes would be used to support a SWSS-Water application.
4.1
Drinking-water Assessor (DWA) roles and other collaborators
The existing DWA role is drinking-water supplier performance assessment, with annual
review of all registered water supplies. DWAs will now have additional marketing,
promotion and facilitation functions, as they will be involved in the formation of CCBGs.
Parties expected to collaborate include the DWAs, government entities including
schools, local authorities and various non- government organisations, together with iwi
and hapu groups and incorporated societies owning water supply schemes. At a
national level ongoing collaboration between the Ministry and New Zealand Water and
Waste Association is also expected on development of appropriate technical assistance
for small schemes.
It is expected that CCBGs would be established to meet local geographic and
operational circumstances. A group of larger local authority operators may be
established separately from groups of small scheme/single site operators to ensure a
broad commonality of experiences and technical circumstances.
4
While E.coli monitoring is not mandated in all cases for schemes less than 500 normally resident persons or 1500
person days per year (which is equivalent to supply for 25 people for 60 days per year), such monitoring would be
required where the PHRMP identified a risk.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson
Page 7
This additional DWA role creates a potential conflict of interest with the existing
monitoring and audit function. A solution is to restrict the DWA promotion and facilitation
role to smaller schemes, with peer review of the resulting PHRMPs carried out by a
different DWA unit.
While the CCBGs would be largely self-driven by participants, it is anticipated that the
DWA will have a complementary role of meeting facilitator and technical advisor. This
complementary role will ensure the groups are established and function effectively. It
could be more efficient to engage specialist facilitators, although these people would
need a similar, if not the same, technical skills as DWAs. The level of upfront marketing
and ongoing facilitation by the DWAs is a significant cost risk for the Ministry arising from
communities that may be isolated, may not perceive a health risk, or require timeconsuming widespread community consultation.
4.2
Training and technical advice to prepare PHRMPs
The CCBGs will base their technical and training advice on videos and other templated
material, intended to be sufficient for plant of all sizes (up to 5000) to prepare a PHRMP
without further professional consultancy advice. While the material produced to date
provides sound checklists and step-by-step processes, appropriate interpretation, in the
absence of professional oversight of potentially complex processes, is a risk. This risk is
worth managing given the alternative of no water standard improvement because of
inability to pay for professional advice. Means of managing the risk include resourcing
the DWAs to ensure training and implementation is effective. It is also proposed the
DWAs will have access to a nationwide pool of professional consultancy engineering
resources contracted by the Ministry. Equipment providers to local water suppliers
should also be encouraged into the CCBG training programmes.
4.3
Relationship with Local Authorities
Under the Local Government Act (LGA) 2002, local authorities have a statutory
requirement by June 2005 to prepare assessments of water and other sanitary services,
including a statement about the extent to which proposals for any new or replacement
infrastructure will ensure that public health is adequately protected. While the deadline
for local authorities’ completion of LGA assessments is some months before the TAP is
likely to be fully functioning, the prospective use of this tool can still be identified in a
local authority’s plans. Most of the TAP-supporting education material is already
available.
4.4
Target markets and approach for TAP
Target markets for the TAP include government (including schools, although all
government entities are excluded from CAP) and local government entities as well as
non-government private organisations. DWAs would be responsible for facilitating
groups of all types above. DWAs are already in contact with all registered water supplies
on an annual basis and are also responsible for checking that suppliers are registered as
required. These activities provide a means of initiating the TAP. Unregistered schemes
should be known to local authorities as a result of their Assessment of Water and
Sanitary Services under the LGA 2002. Participation in the TAP/CCBGs of the widest
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson
Page 8
range of participants, including parties that may not be eligible for subsequent capital
assistance, would be encouraged as resources allow; however DWAs would target
schemes for populations in the range of 500-1000 in the first instance.
4.5
Working with Māori communities (see Appendix Two for details)
Lessons have been learned from Nga Puna Wai o Hokianga (Safe Drinking Water in
Hokianga pilot project covering 37 marae and two community schemes at Whirinaki and
Pakanae). A key success factor with Māori is the process by which communities are
supplied with sufficient information and discussion opportunity, respectful of local
protocols, to allow the problem to be identified and to build a strong local mandate for
participation in a CCBG. The project demonstrated the importance of consultation
principles and processes including a planned approach with culturally appropriate
facilitators and a strong implementation team in the form of the local health trust Hauora
Hokianga.
DWAs will need to carefully use the Ministry of Health/District Health Boards’ Māori
Health Provider networks to ensure engagement of Māori in CCBGs. The ability of
smaller communities to partner directly with the Crown, rather than through a local
authority, will be important for gaining support.
4.6
Relationship with Housing New Zealand’s Rural Housing Programme and
the whole-of-government initiative on sub-standard housing
The Rural Housing Programme (RHP) led by Housing New Zealand in Northland, Bay of
Plenty and Tairawhiti is one of the primary whole-of-government initiatives on substandard housing. This scheme is focused on housing; the RHP suspensory loan
arrangements can fund connection to utility services such as water supply, but not
development of the water supply plant as covered by DWAP.
DWAs and RHP promoters will need to be fully aware of the opportunities under both
schemes and ensure, where appropriate, that parallel applications are made under both
programmes.
The DWAP needs to be aligned with this programme, which is working particularly with
Māori communities of all types and sizes ranging from iwi to hapu. These same groups
would likely contribute one of the starting points for development of CCBGs.
4.7
Progression from TAP to CAP
The core of the TAP is the development of PHRMPs. This may identify an immediate
need for capital assistance with DWA support which would then be subject to the
prescribed application process. In this situation, TAP monitoring for one year would not
be essential. In the majority of cases the PHRMP results in the design of an operating
regime to be reviewed after at least one year to assess the effectiveness of optimised
operation of the existing plant and the potential need for further capital development.
The preliminary application stage of any CAP application would include a report on TAP
outcomes by the applicant (assisted by the DWA as required). The design of any new
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson
Page 9
capital works would be completed in a preliminary design report required as part of the
CAP process.
4.8
Strengths and weaknesses of the proposed TAP
The strengths and weaknesses of the proposed TAP need to be considered in the
context of alternatives, which range from mandatory standards with strict enforcement
through subsidisation of professional assistance to extensive subsidisation of capital
works. The standards enforcement approach risks a ‘one size fits all’, nationwide,
inflexible response to social and economic conditions at the local level. Professional
assistance risks lack of acceptance and sustainability of the advice at the local level. A
capital assistance focus risks funding of projects that could have been avoided with
better operation of existing systems or projects that may have gone ahead anyway.
The DWAP has components of all approaches. Government subsidy is available in
recognition of the ability-to-pay problems of smaller and poorer communities, but only
after self-help and optimal use of existing systems have been fully explored.
Professional technical assistance supports rather than leads the process.
The potential strengths of the TAP include that this operator-led, templated approach:
 may deliver significant improvements at relatively low cost
 promotes acceptance of the problem and sustainability of solutions not easily
achieved by external, professionally driven projects
 can be integrated into local authorities statutory requirement to produce
assessments of water services under the LGA 2002
 provides evidence to prove need for any subsequent capital subsidy.
Potential weaknesses and risks include:
 project or group inertia without professional technical input and facilitation,
particularly in more deprived communities. It is possible that the DWAs would have
access to a fund to provide further professional assistance for TAP participants
 risk that templates and collaborative groups rather than technical led approach is
inadequate to ensure good decisions and operation. Emphasis on training and
monitoring is required which will have a DWA resource implication
 DWA inability to engage smaller isolated communities, Māori in particular
 development of perceived incentive/benefit for smaller communities to participate.
5.0
Description of the proposed SWSS-Water/Capital Assistance
Programme (CAP) component of the DWAP
CAP applications would only be accepted after completion of the TAP with a report
demonstrating that existing plant and systems are not adequate.
The CAP application and assessment procedures would operate in the same threestaged approach as the existing SWSS-Sewerage process. It is envisaged that
applicants would have professional engineering advice to an extent proportionate to the
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
10
magnitude and complexity of the necessary modifications, with costs reimbursed as an
eligible cost under the final subsidy. It is proposed that the national network of DWAs
would have access to a pool of professional engineering advice experienced in
developing sustainable, small-scale systems.
The costs of professional advice to complete provisional and final applications would be
reimbursed as an eligible cost at the same subsidy rate as for all other capital costs (see
section 7.5 and 7.6 below). This will help to ensure smaller and poorer communities are
not deterred due to upfront professional expenses.
Application stages for SWSS-Water would be:
1.
Preliminary application, including a report on TAP outcomes prepared by the
applicant, with technical assistance as appropriate. This report would confirm the
proposed public health benefits based on a one-year testing and data collection
period under a PHRMP to support a case for further capital works. An estimate of
expected professional advisory fees for assistance with the next application phase,
would be lodged with the local Medical Officer of Health and approved by the
subsidy desk. While it would be possible to proceed directly to a provisional
application, a simple preliminary application stage is useful to ensure basic
eligibility criteria have been met (as detailed in section 6.0 of the detailed report
1.2) and that the applicant has engaged appropriately skilled advisors within fee
cost parameters that SWSS-Water is prepared to subsidise.
2.
Provisional application lodged with the Medical Officer of Health. The purpose of
this phase is to present the results of a preliminary design report on a sustainable
solution outlining an appropriate and sustainable scheme. The report would
consider the PHRMP experience, an appropriate balance of water source
protection and treatment plant works, the financial and technical capabilities of the
community and the scheme’s total lifecycle costs and public health benefits. In
situations where there is no existing reticulation (for example, on tank supply),
applicants would proceed directly to provisional application for SWSS-Water after
completion of their PHRMP. In the absence of an existing water supply and data
records, the preliminary design report will need to be more extensive to support the
subsidy application.
The subsidy desk would review the application, prepare the ranking score and
make recommendations to SAWTAC.
Successful applicants would have agreed costs reserved for up to two years during
which time resource consents (where required) would be secured.
3.
Final application for SWSS-Water subsidy. Following receipt of provisional
approval, the applicant for SWSS-Water would obtain any necessary resource
consents, engineering design, cost estimates; confirmation that finance is available
to fully fund the works and submit a final application.
The DWAs would continue to be the principal facilitators of applications for populations
less than 500. Local authorities or independent professional advisors would service
larger populations.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
11
6.0
Proposed CAP/SWSS-Water eligibility requirements
6.1
Implemented PHRMP
Applicants must have completed the TAP with an implemented PHRMP endorsed by the
DWA.
6.2
Local authorities (excluding city councils) are eligible
This is because cities have sufficient economic mass to fund their own schemes. The
alternative is to allow applications from any local authority and use the criteria scoring to
separate out applicants. Government owned or controlled entities including schools,
Department of Conservation and Transit facilities are not eligible for CAP, but are eligible
for TAP.
6.3
Entities with local authority guarantee
Local residential communities and private or club entities are eligible providing facilities
are predominantly publicly accessible with a local authority operating guarantee as for
SWSS-Sewerage. A local authority guarantee of long term plant operation is an effective
means of protecting the Crown’s investment against insolvency or depopulation but may
prevent many smaller communities from applying. Section 6.4 below therefore provides
for schemes not guaranteed by local authorities. Also this approach transfers, but does
not remove, these risks. The PHRMP and preliminary design report should propose a
solution that accounts for risks such as depopulation and sustainable operating costs.
Making the local authority the contractual partner with the Crown fits with the local
authority’s own statutory role to complete Water and Sanitary Assessments under the
LGA. The local authority is also likely to be well placed to develop local joint ventures
with other Crown agencies such as Housing New Zealand Corporation (HNZC) and any
assistance that may emerge from the whole-of-government initiative on sub-standard
housing (WOGISSH). Requiring a local authority guarantee implies local authority
ownership of assets, at least in circumstances of financial distress. This could be
rejected particularly in Māori and other smaller communities if the assets are perceived
as an imposition potentially triggering future rates burdens or land sales.
6.4
Entities without local authority guarantee
Other entities not having a local authority guarantee, but meeting minimum Crown
requirements as a contractual partner, are eligible for SWSS–Water. Iwi and other
entities working in partnership with HNZC’s Rural Housing Programme may represent
examples of an applicant eligible under this criterion. Criteria for an acceptable
contractual partner, at the complete discretion of the Minister, include but are not limited
to:

sound governance arrangements. For example, Incorporated Society or Trust
including those established by the Māori Land Court

acceptable management track record with existing operations, which may or may
not include water supply projects
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
12



demonstrable community mandate and support
ownership of assets reverts to public or other non-profit group ownership in the
event of any payment default or insolvency to avoid private capture of the Crown’s
investment
commitment to occupy and maintain for a minimum period of 10 years.
Such provisions would be clearly reflected in any contractual documentation based on
that used for SWSS-Sewerage. Entities not having a local authority guarantee will
require a modified contract to that used between the Crown and local authorities under
SWSS-Sewerage. Provisions will be needed relating to declaration of, and ongoing
reporting on, agreed governance and management arrangements.
6.5
Minimum and maximum population size
Eligible registered scheme size is for a community size from 1500 person days per year
to 1,825,000 person days per year; that is, equivalent of a normally resident population
of 5000 with a minimum of two reticulated buildings subject to the Health Act. The
SWSS-Water minimum is the same as the current population requirement for scheme
registration.
Smaller scale SWSS-Water proposals may be more appropriately dealt with by HNZC’s
Rural Housing Programme, although this scheme does not yet have national coverage.
SWSS-Water eligible load
Normally resident population load + peak public facility loads +
commercial and industrial loads directly servicing the normally
resident population (eg dairy corner, service station, local retailing)
+
TDSS eligible loading (if any)
+
Wet industry loads (if any)
=
Total scheme design load
6.6
Eligible types of water supply
The first option for eligible types of supply is to allow both reticulated and point-of-use
schemes (recommended). The preliminary design report would be expected to prove
the relative cost effectiveness of either a reticulated or point-of-use solution.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
13
The second option would be to allow reticulated schemes only, to be administered under
Housing New Zealand Corporation’s Rural Housing Programme.
Successful applicants would have agreed subsidy funds reserved for up to two years
during which time resource consents (where required) would be secured.
Some larger communities such as Ruatoria still have unreticulated roof-fed tank supply.
It is possible that a PHRMP may select ongoing use of roof-fed tank supply with
improvements at the point-of-use such as first flush diverters, combined with commonly
owned capital maintenance equipment (for example, tank cleaning apparatus). SWSSSewerage, by comparison, does not allow unreticulated systems due to concerns over
the sustainability of their management.
6.7
Rural and urban locations
Applications could be accepted from any location, regardless of density. Low-density
locations will need to produce low cost solutions to compete with more densely
populated areas in the event that the funding pool needs to be rationed.
6.8
Minimum health risks
It may not be necessary to impose a minimum health risk status, as the criteria scoring
will achieve this result. To provide upfront clarity of the scheme’s purpose, it would be
useful that applicants understand that plants better than C grade (under current Ministry
of Health treatment plant grading system) are likely to need very high scores on the
‘ability to pay’ criteria to be successful for funding. These issues can be communicated
at the preliminary application stage. An alternative would be to simply exclude all
schemes with existing plant graded C or better.
6.9
Minimum ability to pay (Deprivation Index) cut-off
The criteria ranking process will assist to deliver the intended result, however in order to
clarify that the scheme is intended for small and poorer communities, a minimum
deprivation index (DI) of no less than 5.0 is proposed for the community served.
An alternative approach, as used by SWSS-Sewerage is to use an average of the DI of
both the community being served and the wider territorial authority. This approach might
be taken where provision of safe drinking-water is considered to have public good
characteristics that should be funded, at least in part, from local revenue sources beyond
the direct users. SWSS-Water is expected to have a significant number of applicants
with no direct territorial authority involvement, meaning the DI for the community served
by the drinking-water scheme is appropriate.
6.10
Minimum level of funding from the community served
The means by which the local share is met should be left open to a wide range of
sources including philanthropic contributions. It is important however, particularly for
communities that may receive a high subsidy percentage, that some material local
investment is made (possibly in the form of sweat equity/donated labour) in order to
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
14
secure the sense of ownership and responsibility that is likely to sustain operations over
the long term. A cap of 90 percent subsidy is proposed.
7.0
CAP assessment criteria and weightings
Suggested CAP criteria comprise:

public health cost effectiveness – 50 percent score weighting

economy of scale – 25 percent score weighting

ability to pay – 25 percent score weighting.
These criteria are compared with those of the SWSS-Sewerage and TDSS schemes is
summarised in Table 4 below. Appendix Four contains a copy of an assessment
spreadsheet.
Table 4
Comparison of criteria and weightings between SWSS-Sewerage,
proposed SWSS-Water and TDSS schemes
SWSS-Sewerage
Criteria
Public health
Environmental
%
60.0
8.0
Affordability
NA
Ability to pay
Community DI
Local authority DI
Previous recipient
NA
NA
SWSS-Water (proposed)
Criteria
Public health cost
effectiveness
25.0
5.0
2.0
TDSS
%
50.0
-
Affordability
Cost (econ of scale)
Ability to pay
Community DI
NA
NA
NA
25.0
25.0
-
Criteria
Public health
%
15.0
Environmental
Affordability
Cost (econ of scale)
Ability to pay
Avg community &
local authority
NA
Tourism value
Cost ratio to tourism
7.1
Proposed public health cost effectiveness criterion (50 percent weighting
recommended)
Public health risk is a function of the probability of contaminated water multiplied by the
consequences. The probability of contaminated water in turn is a function of the risk of
the source water multiplied by the risk of treatment plant failure. (See Table 5
below).
A further cost effectiveness component is also included in this criterion whereby the
public health risk score is divided by the proposed capital costs. This favours schemes
with the highest public health benefit per dollar of Crown investment (value for money).
SWSS-Sewerage produces a score allowing applicants to be ranked relative to each
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
15
17.5
12.5
20.0
35.0
other and ration the funds available in any one application round. There is no formal
absolute cut-off score for SWSS-Sewerage but SAWTAC has developed a minimum
eligibility score where the core public health objectives of the scheme are considered to
be met. Projects scoring below this minimum level often have primarily environmental
rather than public health benefits. This minimum score helps to ensure future SWSSSewerage applicants demonstrating a good criteria fit are not disadvantaged by making
a later application. For SWSS-Sewerage, despite the minimum required score, an
application that is unsuccessful in one application round may become eligible in
subsequent application rounds depending on the nature of other applications at that
time.
TDSS produces a score also allowing applicants to be ranked but has only a single
application round where all funds are expected to be disbursed. Maintaining equitable
treatment of applicants over multiple funding rounds is therefore not an issue for TDSS.
Like SWSS-Sewerage, this TDSS approach does not however address the question of a
maximum absolute level of government investment per unit of public health benefit or
per household or person served. To achieve this assurance, the PHRMP and
subsequent design work would be audited by SAWTAC to ensure that schemes
proposed for SWSS-Water represent an optimal and sustainable design. A maximum
level of government subsidy per household or person served (for example, the cost of
point-of-use systems for all households) could be implemented to protect against
excessive expenditure.
The funded schemes should represent those that present best value for money, adjusted
for the degree of risk involved. For example, should two otherwise similar schemes be
ranked the same where one proposes a more risky solution? One approach to this
concern could be to multiply the value for money scores calculated below by an
assessed risk factor. This is a somewhat subjective approach, requiring development of
further scoring guidelines; it is not an approach used by SWSS-Sewerage where the
technical review of preliminary design reports is expected to resolve risk issues. A
similar approach is recommended for SWSS-Water to ensure proposals represent
sustainable design solutions.
Table 5
Calculation of public health cost effectiveness scores
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
16
7.1.1
Risk of source water
The risk associated with source water can be assessed from the risk that pathogens
including Campylobacteria, E.coli, Cryptosporidia, Giardia and Salmonella. are present.
However, monitoring these pathogens directly can be expensive. Excrement is the major
source of such pathogenic microorganisms and E.coli, can be used as an indicator
organism for faecal contamination. Suggested E.coli measures and scores per 100ml
sample are noted below. These measures would be averaged over at least a one-year
sample period as specified in the PHRMP. It is noted that E.coli testing is not a DWSNZ
requirement for small schemes (<500 persons), although those identifying this in a
PHRMP would be expected to do so.
Table 6
Risk of source water: E.coli measure and score
Suggested E.coli measure
Score
a
0 E.coli/100ml sample
10%
b
<20 E.coli/100ml sample
20%
c
<100 E.coli/100ml sample
50%
d
<1000 E.coli/100ml sample
80%
e
>1000 E.coli/100ml sample
100%
Alternative indirect indicators of pathogen risk, based on the grade of source water type,
are possible in the absence of sample data. While this approach is simple, it is a very
coarse assessment and not preferred when the PHRMPs can in most cases deliver
actual data at a cost of around $30 per sample, plus courier and/or collection. Other,
possibly more expensive and less well authenticated5, approaches include measurement
of turbidity as a proxy for the presence of pathogen risks. Less expensive options,
particularly for small schemes where even these sampling costs may be prohibitive, may
include visual inspection of turbidity or change in weather/source flow conditions.
There are arguments for weighting source water risk higher than treatment plant failure
on the basis that, particularly for smaller communities, poor source water quality makes
a greater contribution to total risk in the event of treatment plant failure. However,
modelling the variables has resulted in no material difference when emphasis is placed
on either water quality or treatment plant risk. On balance, an even weighting of the two
variables is proposed.
7.1.2
Risk of treatment plant failure
The risk of treatment plant failure based on the protozoa log credit system contained in
DWSNZ is recommended with proposed scoring in Table 7 below. It is noted that this
process is not a requirement for small schemes (<500 persons), meaning schemes that
expect to make a SWSS-Water application would need to complete additional work.
Some South Island waters that contain ‘glacial flour’ will be very turbid but may have very low concentrations of
pathogens
5
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
17
This approach will require the supplier or DWA to assess the existing treatment
infrastructure and determine the log credits that can be attributed to it using the relatively
simple toolbox techniques outlined in DWSNZ. Alternatives considered include
development of a schedule of treatment plant failure risk probabilities.
Table 7
Risk of treatment plant failure: protozoa removal measure and score
Log credits
Score
a
0
100%
b
0.1-0.5
90%
c
0.6-1.5
80%
d
1.6-2.5
70%
e
2.6-3.5
60%
f
3.6-4.4
10%
g
> 4.5
0%
Because DWSNZ requires a treatment plant to have a minimum 3 or 4 log credit
(because of the uncertainty in cryptosporidium levels in a source water, a 4 log target is
usually aimed for) for most source waters other than a secure groundwater, similarly
high scores have been allocated to log credit ratings less than this required level. For log
credit ratings near or higher than the 3-4 log credit level required by DWSNZ, much
lower scores have been allocated. Hence achievement of DWSNZ’s requirements is
encouraged by the scoring system established.
7.1.3
Consequences
The consequences of an instance of contaminated water are directly proportional to the
size of the population served. If a minimum score is set at 10 percent for a population of
one and the maximum score is 100 percent for the maximum eligible population of 5000,
then the derived equation is [population multiplied by 0.018 plus 10]. It is possible to
further refine the measure of consequences with reference to the varying susceptibility of
water users to illness; in particular, visitors, the very young and very old are more
susceptible than others. For reasons of administrative simplicity a simple measure of
population size is proposed. However, this assumes that the applicant communities are
not likely to have very large differences in their elderly, young and visitor demographics
which may not reflect the reality of some retirement- or tourist-based communities.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
18
7.1.4
Public health cost effectiveness ratio (CER)
The possible range of public health cost effectiveness ratios is 0-1000, assuming the
minimum capital cost of a solution is say $1,0006.
Min = 0
Max
=
1,000,000
$1,000
=
7.1.5
(Maximum public health risk)
(Lowest cost solution)
1000
Calculation of public health cost effectiveness score (CES)
The Total Score on all criteria is proposed to represent only a means of ranking
applicants. The actual subsidy amount is proposed to be determined from an average of
the community and district deprivation indices.
The Cost Effectiveness Score (CES) contributes 50 percent of the Total Score on all
criteria and therefore should fall within the range of 1-50. The CES is based on the Cost
Effectiveness Ratio (CER) which has a potential range of 1-1000. A numerical
relationship is therefore used to convert the CER to the CES scores.
The desired outcome is to have a reasonable spread of low to high Total Scores on all
criteria of the applicants that will permit the required ranking. To achieve this outcome, a
relationship between CES and CER was developed on a ‘trial and error’ basis using a
sample of 21 potential applicants until the modelled Total Scores on all criteria fell in the
range of approximately 50-95. This range is required to enable all applicants with a
positive fit with the criteria to receive a total score on all criteria of over 50 percent. A 95
percent upper limit to the total score on all criteria was targeted in the event this total
score result was also used as the basis for determining the subsidy percentage (not
recommended) where some degree of local funding share would be needed.
Table 8 displays the formula that achieves this desired outcome.
Table 8
CES vs CER relationship
6
Public Health Cost Effectiveness Score (CES)
y = 3.8355Ln(x) + 46.54
R20.9691 =
CES vs CER relationship
50
40
30
20
Scale extends
from 5 to 1000
10
Theoretical minimum level only. Not expected to necessarily represent a real application.
0
0
1
2
3
4
5
Drinking Water Assistance Programme – Public
ReportHealth
1.2 – Cost
Detailed
Report on Implementation Arrangements. Author David Stimpson Page
Effectiveness Ratio (CER)
19
Table 9 below shows a sample of Public Health cost effectiveness scores derived from
the formula in Table 8 above. (Note: the X scale extends to a maximum of 1000, but is
only shown to a ratio of 5, as all ratios above this level receive the maximum score of 50
percent).
Table 9
Public health cost effectiveness scores
Cost Effectiveness
Cost Effectiveness Score 0Ratio
50%
0.00001
0.00000%
0.05000
35.0%
0.10000
40.0%
0.25000
44.0%
0.50000
46.0%
0.75000
47.0%
1.00000
48.0%
2.00000
49.5%
5.00000
50.0%
10.00000
50.0%
An alternative approach setting a number of bands for the cost efficiency score was
rejected on the grounds that while this may be a simpler approach to understand, it is
more difficult to achieve a separation of the resulting applicants’ scores and gives an
incentive to manipulate input data when an application sits close to a band margin.
7.2
Affordability criterion – increased costs per person for smaller communities
– ‘dis-economies of scale’ (25 percent recommended weighting)
In the context of the SWSS-Water, the relative affordability of schemes has two
dimensions– first, the increased cost of plant per person to smaller communities (diseconomies of scale, where the basic costs of the plant, which do not vary greatly due to
size of plant, are shared among a smaller population) and second, the ability to pay
(discussed further in section 7.3 below).
Smaller communities suffer dis-economies of scale where the costs of plant per person
increase significantly as the minimum works required, regardless of size of community
served, have to be spread over a smaller number of households.
As is also the case with the TDSS, a ranking criterion to assess the dis-economies of
scale suffered by smaller populations is proposed. If the scores on this criterion ranged
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
20
from 0 percent to 25 percent on a straight-line relationship for populations from 0-5000,
the equation would be [25 – population x 0.005].
An alternative approach considered is that used for SWSS-Sewerage, where community
size is not an evaluation criterion but is a consideration for the calculation of subsidy
percentage.
A further aspect of affordability, in addition to the size of community, are factors driving
higher costs such as lower community density (higher reticulation costs), high flooding
occurrence or geological conditions that create water sources demanding higher levels
of treatment and cost (for example, conditions that are not conducive to development of
secure bores). The decision to take these factors into account depends on the relative
weighting of policy objectives. If the focus is achieving maximum public health benefits
per dollar of Crown investment, no adjustment in favour of communities facing high costs
due to low population density or unfavourable physical conditions would be
recommended. Objectives of achieving widespread access to standards-compliant
drinking-water would suggest some adjustment.
The proposed public health cost effectiveness measure will help to avoid the risk of the
construction of inefficient or expensive schemes, but mean applications from lower
density or high cost geological areas may not be competitive for a limited funding pool.
It is noted that SWSS-Sewerage does not employ a cost effectiveness measure in its
rankings, but professional judgment is applied by SAWTAC advisors as to maximum
acceptable scheme designs and costs.
7.3
Affordability criterion – ability to pay as measured by the Deprivation Index
(25 percent recommended weighting)
Definition of the ability to pay depends upon the choice of area over which persons are
expected to contribute to scheme costs. Among local authority funding policies this
definition ranges from funding only from the direct user community through to districtwide funding.
TDSS weights these two components evenly, calculating an average of the deprivation
index of the participating community and the local authority. As noted in section 6.9
above it is recommended that SWSS-Water calculate this affordability criteria based on
the deprivation index for the community served only. This is because in many cases the
territorial authority, and therefore wider community, may not be directly involved, and
could not be expected to help fund, the project. Applicants would therefore receive
scores of 0 percent at a deprivation index of 0 and 25 percent at a deprivation index of
10.
7.4
Advantages and disadvantages of various ranking criteria choices
The key policy choices are the relative weightings of the three criteria. Other alternative
arrangements of ranking criteria are discussed in Table 10 below.
If the principal desired outcomes of the subsidy is to improve public health, without
concern for who benefits, then an increased emphasis on the public health score and
linking the subsidy percentage to this score would be indicated. This approach would
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
21
lead to a significant subsidy to relatively wealthy communities, such as second home
beach locations, as well as larger communities, possibly excluding applicants from
smaller communities and rural marae for example.
Increasing emphasis upon the affordability-dis-economies of scale criterion (25 percent
weighting recommended) is likely to favour smaller communities over larger
communities. In this respect, this criterion is therefore working in an opposite direction to
the public health cost effectiveness criteria above. The advantages of more emphasis
on this criterion are greater equality of water supply provision across the country, but at
increasing cost per household benefiting.
Increasing emphasis upon the affordability-deprivation criterion (25% weighting
recommended), increases the likelihood that water supply improvements will become
affordable for poorer communities. The disadvantage is that wealthier communities that
may deliver greater public health benefits may not receive funding.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
22
Table 10
Summary of policy options identified – advantages and
disadvantages
Summary of policy options identified
Summary of advantages/ disadvantages
1. Public health cost effectiveness score criterion
As standards compliance is a primary objective,
 Weight higher/lower than 50%
maintenance of at least a 50%weighting in line
recommended.
with SWSS-Sewerage would seem appropriate.
Modelling of a sample has indicated only minor
 More emphasis on either source
sensitivity to varying this factor.
water risk or treatment plant risk.




Treat the cost effectiveness
component as a separate criterion.
Separate treatment would further complicate the
scoring system.
Source water risk based on turbidity
measures rather than E.coli
measures proposed.
May be a simpler approach but evidence is
unclear.
Treatment plant risk based on
schedule of plant failure probabilities
rather than log credit systems in the
DWSNZ.
Log credit system with its North American roots
may not deal effectively with NZ’s greater
proportion of surface water sources cf well.
Both the proposed formula and any bands would
be derived from experimentation with a sample of
applications with a target spread of results. The
formula approach while more complex is fairer
and achieves separation of applications.
2. Affordability-dis-economies of scale criterion
Modelling of a sample of possible applicants
 Weight higher/lower than 25%
indicates that smaller applicants such as Marae
recommended.
scoring relatively highly on total score at the 25%
weighting.
alternative is that used by SWSS-Sewerage
 Remove from ranking criteria and use This
which
has the advantage of aligning the schemes,
as a determinant of subsidy
but removes the benefit of assessing this policy
percentage only.
aim alongside other objectives.
weightings for higher cost areas is in
 Higher weighting for areas with higher Higher
tension with the public health objective, as is
construction cost factors (geology).
community size whereby larger communities
score higher on public health risk and smaller
communities score higher on the affordability
criterion. The decision is a choice between
weighting of maximising Crown’s public health
investment returns and more equal provision of
services.
3. Affordability-deprivation criterion
A higher weighting implies a greater emphasis on
 Weight higher/lower than 25%
equality of service access compared with Crown’s
recommended.
public health investment returns.
of this emphasis depends on the highly
 Focus on area served, district wide or Resolution
contentious
range of views on the extent to which
an average deprivation index as
there are wider public benefits from clean water
recommended.
and the extent to which funding should be
similarly spread.
4. Subsidy percentage
The revised SWSS–Sewerage approach also
 Based on deprivation index
recommended for SWW-Water suggests that
percentage or recommended total
deprivation level is the primary determinant
ranking score percentage.
funding levels. This means the three criteria are
used for project ranking purposes only.
Use a series of bands to convert the
public health cost effectiveness ratio
into a 0-50% score rather than the
fitted formula approach.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
23
7.5
Eligible costs – percentage of total treatment plant upgrade costs
and scheme components eligible for assistance
Eligible capital costs would depend on the percentage of the treatment plant’s total
designed load that comes from eligible sources listed below. Judgements on this issue
will be made by SAWTAC engineering advisors as is the case for SWSS-Sewerage. The
SWSS-Water eligible demand load calculation would exclude significant commercial
uses individually or collectively constituting a material proportion of the total scheme
demand or where consumption of water is a significant integral component of the
industrial process, that is, a ’wet industry’. Where the TDSS operates, any material
tourism load would also be excluded. Eligible loads would include:
 normally resident population
 accommodation occupied for at least half the year
 the peak loads from facilities that provide a predominantly public benefit (defined
as the wider community being free to attend).
Eligible sources of water supply demand would include sports fields, public parks and
community halls where there are no private profit-based entry fees. Churches and
marae would be eligible where there is a wider community focus to the majority of
activities. The SAWTAC engineering advisor would take the materiality of the load into
consideration.
Membership and fee-based clubs (surf/golf clubs), hotels and motels would not be
eligible, although these loads may not be material over and above the eligible normally
resident population. Water supply loads and costs resulting from food or product
processing would not be eligible.
In summary, the allocation of total scheme design loads is as follows:
SWSS-Water eligible load
Normally resident population load + peak public facility loads +
commercial and industrial loads directly servicing the normally
resident population (eg dairy corner, service station, local retailing)
+
TDSS eligible loading (if any)
+
Wet industry loads (if any)
=
Total scheme design load
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
24
It is proposed that only capital costs be eligible for subsidy, although for very deprived
communities operating costs are also likely to be a barrier, even if all capital were to be
subsidised. However this requirement may completely disbar a community with extreme
deprivation. It could be necessary to consider subsidy assistance for ongoing monitoring
and possibly other operating costs for communities with a deprivation index of over 9.0.
Eligible SWSS-Water capital costs would include:

raw water source works (dams, bores and associated protection and raw water
storage)

treatment plant and assorted treated water storage where developed to manage
health risks (for example, avoid need to water in flood conditions)

distribution reticulation systems to the point of property boundaries

professional fees

training to enable initial operation of the plant.
Ineligible costs would include:


capital renewals or capital maintenance works
operating expenditure including ongoing operator training, monitoring and analysis
for DWSNZ compliance and maintenance.
The drawback to this approach of constraining eligible costs is that extremely deprived
communities are likely to find any additional costs, whether capital or operating,
unaffordable. The resolution of this challenge, other than by increased and ongoing
government subsidy, is to ensure the preliminary design report presents options that are
sustainable within the resources of the community. It is possible that government might
consider provision of ongoing support for operating expenses due to the increased costs
arising from government imposed standards.
7 .6
Calculation of subsidy percentage
Availability of the total $135 million subsidy funds over 10 years has been designed to
provide a less-than-average amount in the early years, as applications are likely to take
some time to develop following TAP, followed by a greater-than-average level of funding
in the middle years, when a large number of applications are expected (as has been the
case with SWSS-Sewerage).
The recommended approach is to provide a subsidy percentage calculated from the
deprivation index score for the community served. This approach is similar to that used
for SWSS-Sewerage except that in that case the index score is calculated from an
average of both the local authority and the community served.
An alternative approach (as used for TDSS) is to calculate the subsidy percentage from
the total score result. This has the advantage of matching the extent of funds received
against the applicant’s fit with all three criteria. The disadvantage is the added
complexity of the relationship between needs and funds provided. Under this system a
relatively wealthy but small community with poor quality source water may receive a
significant subsidy percentage.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
25
Highly deprived communities, (DI of 10), could under the recommended approach
therefore receive a 100 percent subsidy. A recommended approach is to cap the
subsidy at 90 percent to ensure a degree of local commitment in either cash or donated
materials and/or labour.
8.0
Modelling of a sample range of applicants
The following sample (Table 11) was selected from the drinking-water register to
represent potential applicant types with a range of community sizes, deprivation indices,
and source water quality and treatment standards. All locations in the sample may not
necessarily be eligible. Capital costings are based on very approximate estimates from
engineering advisors GHD Limited (NZ) (GHD) for indicative modelling purposes only.
Table 11
Sample range of potential applicants
Community
Omaha Beach Surf Club
Tahaawai Marae
Sea Breeze Motel
Whangara
Te Kotahitanga Marae
Te Puke Golf Course
Kumara
Franz Josef
Ruatoria
Clarks Beach
Patea
Coromandel
Te Kauwhata
Te Anau
Milton
Kaikoura
Edgecumbe
Helensville
Paihia
Paeroa
Hauraki Plains
Area
Rodney DC
Far North
Whangarei
Gisborne
Far North
WBOP DC
Westland
Westland
Gisborne
Franklin DC
S.Taranaki
TCDC
Waikato DC
Southland
Clutha DC
Kaikoura
Whakatane
Rodney DC
Far North
Hauraki DC
Hauraki DC
Pop
10
50
50
52
80
150
300
300
500
1,152
1,400
1500
1,700
1,800
2,000
2,500
2,500
3,200
4,000
4,000
5,535
Pop
Rank
1
2
2
4
5
6
7
7
9
10
11
12
13
14
15
16
16
18
19
19
21
Current
Treatment
Grading
1
1
1
1
1
2
2
1
1
2
3
7
5
1
4
2
3
4
3
4
4
Water Source
Roof & Bore
Roof
Roof & Bore
Roof
Surface
Surface
Spring
Surface
Roof
Bore
Bore
Stream
Stream
Surface
Surface
Surface
Bore
Stream
Surface
Stream
Stream
Capital cost
18,200
81,900
81,900
81,900
109,200
273,000
473,200
473,200
582,400
709,800
800,800
182,000
364,000
1,092,200
1,110,200
1,292,200
1,292,200
1,619,800
1,729,000
1,710,800
1,911,000
Table 12 below shows the ranking of sample applicants by total score on all three
ranking criteria.
Tables 13 and 14 show the same sample ranked by their DIs and cost effectiveness
scores. Comparison of the top five applicants by total score with the other rankings
indicate that these top scorers show relatively high deprivation and cost effectiveness,
as might be expected given SWSS-Water aims of meeting the needs of smaller and
poorer communities. Further modelling of various combinations of criteria was also
completed during the investigation. This included varying the relative weights of criteria,
testing the impacts of raw water quality and population size. The total score rankings
were typically not particularly sensitive to changes to these factors.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
26
Table 12
Sample applicants ranked by total score
Sample applicants ranked by total score
Whangara
Tahaaw ai Marae
Te Kotahitanga Marae
Sea Breeze Motel
Omaha Beach Surf Club
Te Puke Golf Course
Ruatoria
Kumara
Te Kauw hata
Patea
Franz Josef
Clarks Beach
Edgecumbe
Helensville
Kaikoura
Paeroa
Te Anau
Paihia
Milton
Hauraki Plains
Coromandel
0.0
Table 13
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
8.0
9.0
10.0
Sample applicants ranked by deprivation index
Sample applicants ranked by deprivation index
Patea
Whangara
Te Kotahitanga Marae
Tahaaw ai Marae
Coromandel
Edgecumbe
Paeroa
Te Kauw hata
Ruatoria
Helensville
Paihia
Kumara
Te Puke Golf Course
Sea Breeze Motel
Clarks Beach
Kaikoura
Omaha Beach Surf Club
Franz Josef
Te Anau
Milton
Hauraki Plains
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
27
Table 14
Sample applicants ranked by cost effectiveness score (CES)
Sample applicants ranked by cost effectiveness score (CES)
Omaha Beach Surf Club
Whangara
Sea Breeze Motel
Tahaawai Marae
Te Kotahitanga Marae
Te Puke Golf Course
Te Kauwhata
Ruatoria
Hauraki Plains
Te Anau
Kaikoura
Paihia
Paeroa
Franz Josef
Kumara
Helensville
Milton
Clarks Beach
Patea
Edgecumbe
Coromandel
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
28
Appendix One
Zones complying and population covered for population bands 0-5000. Source: ESR
database of annual review of drinking-water quality supplied March 2005.
Population
Band
Less
than
500
Sub Total
500
to
999
Supply Type
Zones
Zones
Zones
complying
not complying
total
TLA
152
50%
224
15%
376
Community
12
4%
114
8%
126
School
93
30%
532
36%
625
Camping ground
17
6%
204
14%
221
Commercial - hospitality
4
1%
63
4%
67
Commercial - other
18
6%
172
12%
190
DOC
2
1%
52
4%
54
Marae
1
0%
99
7%
100
Other
8
3%
12
1%
20
307 100%
1,472
100%
1,779
TLA
Community
School
Camping ground
Commercial - hospitality
Commercial - other
DOC
Marae
Other
Sub Total
1,000
to
4,999
TLA
Community
School
Camping ground
Commercial - hospitality
Commercial - other
DOC
Marae
Other
Sub Total
TOTAL:
All
0-5,000
TLA
Community
School
Camping ground
Commercial - hospitality
Commercial - other
DOC
Marae
Other
TOTAL
38
1
0
0
0
3
0
0
0
42
89
2
0
0
0
1
0
0
6
98
279
15
93
17
4
22
2
1
14
447
43
3
8
90%
2%
0%
0%
-
7%
0%
0%
-
100%
2%
0%
0%
0%
-
0%
0%
6%
100%
62%
3%
21%
4%
1%
5%
0%
0%
3%
100%
3%
100%
84%
2%
2%
0%
-
5%
0%
0%
5
61
318
118
541
204
64
182
52
99
19
1,597
8%
100%
20%
7%
34%
13%
4%
11%
3%
6%
1%
100%
7%
35%
12%
4%
11%
3%
6%
1%
100%
76%
4%
8%
0%
1
10
11%
0%
3
1%
-
2%
0%
51
1
1
91%
13%
0%
2
64
0%
5%
0%
1
7
0%
81
4
8
67%
21%
1%
9%
-
0%
2
106
2%
140
3
1
4
11
159
597
133
634
221
68
204
54
100
33
2,044
0%
100%
88%
2%
1%
0%
0%
3%
0%
0%
7%
100%
29%
7%
31%
11%
3%
10%
3%
5%
2%
100%
Population
Pop
complying
not complying
35,654
65%
37,464
29%
2,075
4%
11,290
9%
11,113
20%
41,470
32%
1,064
2%
10,260
8%
360
1%
2,959
2%
2,899
5%
15,091
12%
100
0%
2,271
2%
30
0%
7,209
6%
1,705
3%
1,624
1%
55,000 100%
129,638
100%
25,391
700
2,252
28,343
193,274
5,687
4,150
13,700
216,811
254,319
8,462
11,113
1,064
360
9,301
100
30
15,405
300,154
90%
2%
0%
0%
0%
8%
0%
0%
0%
100%
89%
3%
0%
0%
0%
2%
0%
0%
6%
100%
85%
3%
4%
0%
0%
3%
0%
0%
5%
100%
29,098
1,879
4,754
500
4,100
1,318
41,649
125,347
1,200
2,400
6,800
8,452
144,199
191,909
14,369
48,624
10,260
3,459
25,991
2,271
7,209
11,394
315,486
70%
5%
11%
0%
1%
10%
0%
0%
3%
100%
87%
1%
2%
0%
0%
5%
0%
0%
6%
100%
61%
5%
15%
3%
1%
8%
1%
2%
4%
100%
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
29
Appendix Two
2.0
Lessons learned from other government initiatives
2.1
Lessons learned from Nga Puna Wai o Hokianga (Safe drinking-water in
Hokianga pilot project)7 and SWSS-Sewerage
The Hokianga pilot was judged overall to be successful. It demonstrated the importance
of consultation principles and processes including a planned approach with culturally
appropriate facilitators and a strong implementation team in the form of local health trust
Hauora Hokianga. Consultation principles assisting success included: sufficient time,
appropriate information, and an inclusive approach, respectful of local protocols.
Project reviewers considered, however, that consultation partners need to be aware of
the real costs of delays in decision-making and that greater local government
involvement was needed.
Costs achieved were reasonable with other benchmark installations, but remained well
beyond the affordability of small communities without near to 100 percent subsidy on top
of voluntary labour input. The fundamental ability-to-pay difficulty in smaller, poorer
communities was not overcome.
Marae costs ranged from $5,000 to $37,000 (excluding the trust administrative costs,
professional engineers and volunteer labour input) with an average of $14,000 across 37
marae.8 Assuming each marae is equivalent to say 15 households, these costs are
within the vicinity of the $1,000 cost per household for a point-of-use solution (rainwater
tank management and filtration). Locally met cash costs of $600-$1,500 were largely for
site works (concrete slabs) and any pipe work within the marae structures.
Two community schemes were also completed. At Whirinaki, 65 houses, a kohanga
reo, three marae and a sports complex cost approximately $5,800 per equivalent
household. This is a reasonable cost comparable with installations elsewhere (for
example, $13,300 per property for 120 sites at Collingwood). This is equivalent to $450
per annum /$8.60 per week for Whirinaki, in a region estimated to have a median male
annual income of $15,700. This cost is likely to be well above the 1.5 percent of
household income international guideline. Community supply at Pakanae cost $2,800
per household excluding volunteer labour.
These community supplies are not cost effective compared with point-of-use systems at
approximately $1,000 per household, although these systems supply water to only one
tap, have drought problems and risks from reliance on people undertaking routine
maintenance (often neglected in even wealthy communities).
7
Nga Puna Wai o Hokianga (Safe Drinking water in Hokianga pilot project) prepared for MOH by Beca Carter Hollings &
Ferner and ESR, May 2003).
8
These figures may be influenced by reticulation costs, which climb quickly if houses are not within 100m of each other.
Uncertain if fire supply was specified which could significantly lift total reticulation costs.
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
30
Voluntary input, if well managed, can lower costs and promote community ownership
There was little local cash input for the two community schemes with the shortfall met
from other philanthropic sources. The $700,000 total cost (excluding Hauora Trust
administration and engineering consultancy) for the community scheme at Whirinaki was
met: Ministry of Health $100,000, Te Puni Kokiri $187,000, ASB Community Trust
$171,000, Community Employment Group $42,000, Work and Income $63,000, Maori
Land Court 5,000, and Lottery Grants Board $138,000.
It remains difficult to prove that poor water quality has a health impact9 but measurable
water quality did improve, which is seen as a surrogate indicator of health status. Long
term sustainability remains uncertain although anecdotal evidence suggest the drinkingwater programme has lead to improvement in other public health areas such as kitchen
upgrades.
Tendering needs to avoid complexity to encourage competition, and tender evaluation
still needs to ensure solutions recommend appropriate and use sustainable technology
given remoteness and affordability. Over-design of plant to cover all risks should be
avoided. A better solution is to keep the design simple, but retain a contingency budget
to deal with unexpected challenges.
2.2
Lessons from SWSS-Sewerage
After two year’s operation, more deprived communities have not tended to apply to
SWSS-Sewerage because of affordability problems. Average costs per household
currently being incurred for SWSS-Sewerage reticulation/treatment schemes are in the
order of $24,500 including a 30 percent cost premium resulting from the current sellers
market conditions in civil works construction. Additional annual costs (covering both
capital and operating costs) in the order of $500 for a reticulated wastewater scheme
have proved too expensive for the majority of residents in the community of Moerewa
(population 1869 and a DI of greater than 9) for example. The average DI for the 24
reticulation/treatment communities approved to date is 6.16, and for the 17 ‘treatment
upgrade only’ communities it is 6.37. SWSS officials estimate around 77 communities
with DIs greater than 7, and populations greater than 100 that need reticulated sewerage
but cannot afford it, in spite of the 50 percent SWSS-Sewerage subsidy.10
As a result SWSS officials have recommended communities with both a community DI
and an average (community plus local authority) DI of greater than 7 receive a subsidy
rate the same as the average DI across both the scheme community and the local
authority (ie, if the average DI is 7.8, the rate of subsidy would be 78 percent).
This increase of the DI weightings will further ensure poorer communities are attracted to
the scheme. For communities with a DI less than 7, no change is recommended.
9
Beca, p.39
Draft officials’ report on two-year review of SWSS - Sewerage for SAWTAC meeting 18 March
2005.
10
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
31
Appendix Three
3.0
Timetable for implementation of drinking-water legislation to amend
the Health Act 1956
Category of supplier
Proposed compliance timetable
Drinking-water network suppliers with an
existing supply over 10,000 population
Start to become compliant from the
beginning of the second year after
enactment
Drinking-water network suppliers with an
existing supply between 5001 and 10,000
population
Start to become compliant from the
beginning of the third year after enactment
Drinking-water network suppliers with an
existing supply between 501 and 5000
population
Start to become compliant from the
beginning of the fourth year after
enactment
Drinking-water network suppliers with an
existing supply between 100 and 500
population
Start to become compliant from the
beginning of the fifth year after enactment
Drinking-water suppliers with an existing
supply from 25 to 100 and drinking-water
suppliers with an existing supply below 25
population
Start to become compliant from the
beginning of the sixth year after enactment
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
32
Appendix Four
4.0
Capital Assistance Programme (CAP) assessment spreadsheet
Drinking Water Assistance Programme – Report 1.2 – Detailed Report on Implementation Arrangements. Author David Stimpson Page
33