Mayor's Message: Government Backs Off Nelmac

Nelmac is a significant business for Nelson, owned by Council and employing more than 300 staff. It provides important services for our city in maintaining our prized gardens, cleaning our streets, collecting recycling, mowing our sports fields, controlling pests and weeds, fixing leaks in our water pipes and running our wastewater and drinking water networks.

My respect for Nelmac’s staff has been enhanced by their hard work through Nelson’s recent run of storm events. These are the people who go out in atrocious conditions to clear drains and fix broken sewer mains.

I was shocked to be told late last year that the Government, as part of the radical Three Waters reforms, was to dismember Nelmac by taking its water division. This meant that 50 staff and assets such as pumps and utes would be taken for the new water entities without compensation. Unfairly, this asset grab affected companies with water divisions that were owned by councils only. It did not apply to businesses doing the same work in Tasman or Marlborough as they are owned by private companies such as Downer and Fulton Hogan.

I was advised by Nelmac Board members that this raid on their business and assets would have dire consequences for the company. It amounts to a third of the turnover. The immediate impact would be a loss of dividends to Council, pushing up rates. They were also concerned about the job losses and the uncertainty for staff. They doubted the business would be viable without the water services division.

I have been working hard for months trying to convince the Government to leave Nelmac alone. I presented to the Parliamentary Select Committee with the Nelmac CEO in March. I appreciated having 100% support from all 12 Councillors in opposing this. I thought the battle was lost when other changes were announced to Three Waters last month without a backtrack on Nelmac. The good news came last week on the eve of the Budget.

This mess over Nelmac should never have got this far. The threat and uncertainty has harmed the business and been stressful for staff.

There is still much about the Government’s Three Waters changes that worries me such as the poor governance structure and splitting the management of stormwater, but I am pleased Nelmac is no longer at risk. I will be continuing to lobby whoever is in Government to get the best outcome possible for the future of Nelson’s critical water infrastructure.