Ford the fixer does more with less

HIDESIGHT

I didn’t know Mark Ford well when I pinched him from Watercare to head up the Auckland Transition Agency.

But I had observed for years that he had delivered big projects in Auckland, on time, under budget.

I didn’t see that happening anywhere else across Auckland local government.

Mr Ford’s track record suggested to me that he was just the man I needed to build a new council and seven council-controlled organisations for Auckland. True to form he delivered on time and under-budget. He did that while everyone else was telling me it was impossible.

It was an extraordinary business achievement. In 16 months he headed the team that built a new council to replace the previous eight councils and their 300-plus subsidiaries.

It was also an extraordinary political achievement. Mr Ford delivered the new Auckland Council with a minimum of fuss.

He is now back heading Watercare (as well as heading the effort to rebuild Christchurch's water infrastructure).

Auckland is lucky to have him. I watched first hand the enormous strength and vigilance required through the transition to keep the costs of the new council under control. At every turn there was an inevitable cry for more staff than ever before. At every turn that call had to be resisted. It wasn’t easy.

The new council started with 2000 fewer staff than the previous eight councils had. That’s saved more than $1 billion in wages alone through the council’s 10-year plan. The Council within its new structure has now made additional savings of $1.7 billion.

But what of Watercare itself? What’s happened there?

Before November 1, 2010, Watercare was a wholesaler and there was a different water retailer for each of the seven districts in Auckland.

The fragmentation produced poor regional planning and decision-making.

For example, Auckland needs a second regional wastewater treatment facility. The Mangere Wastewater Treatment Plant will reach its average daily flow limits of its existing resource consents by about
2027. Even if the resource consents are expanded the Mangere plant is expected to reach its full capacity between 2050 and 2070.

The obvious solution is to extend the Rosedale Wastewater Treatment Plant at Albany. The other possible options are either a western or central plant but both options are unproven. Their indicative costs are $460 million and $620 million respectively.

The cost of extending Rosedale is $290 million.

It’s a no-brainer looked at from Auckland’s point of view. But that’s not how these things were doing. The politics was fragmented and parochial. North Shore City Council for political reasons was fiercely resisting the extension of its Rosedale plant. Such arguments and waste were seriously hindering Auckland’s development.

And so, along with the establishment of one council for Auckland, water supply and waste treatment were integrated across Auckland within Watercare.

An integrated Watercare now has assets totalling $7.8 billion. Its annual revenue is $373 million.

Since integration, Watercare has achieved efficiency savings totaling $104 million annually. Retail water prices have been cut by an average of 15%. Without integration, the retail price of water would be 40% higher this year than it is.

Waste water prices did increase 4.5% last year. But the previous councils were promising an average 36.9% increase. So despite the increase, the saving is considerable. In total, the water and wastewater charges for Aucklander are now $74 million a year lower than the previous councils had planned.

Previously 950 staff were employed to do what Watercare now does.

There are now 648 staff. That’s a staff reduction of 30%.

Once again, more is now being done with less. When did that last happen in local government?

I doubt anyone else will thank Mark Ford on behalf of Auckland.

So I will.

Thanks mate.