Hamilton City Council has unanimously approved the transfer of the city's water and wastewater assets to a new regional organisation in a decision that will reshape how water services are delivered across the Waikato.
The landmark vote on March 12 paves the way for IAWAI – Flowing Waters Ltd to take control of approximately $3 billion worth of infrastructure from July 1, managing water services for more than 220,000 residents across Hamilton and Waikato District.
The new jointly owned organisation promises to deliver significant savings for households while tackling decades of underinvestment in critical water infrastructure. Hamilton households will save $91 per year on water charges compared to previous forecasts, while Waikato District residents will see even larger savings of $247 annually.
Growth charges to fund expansion
IAWAI will introduce a controversial new funding mechanism – charging $500 per year for 25 years on all new residential builds. The growth charges, split between water supply ($200) and wastewater ($300), are expected to generate $46.3 million over the next decade.
"We are being very explicit – existing households in Hamilton and Waikato district should not be subsidising all the costs of growth. That's simply not fair," said Kevin Lavery, IAWAI Executive Chair.
The charges reflect a stark reality: approximately $2 billion of the planned $3.3 billion infrastructure investment over the next decade is needed solely to support new homes and businesses in the rapidly growing region.
Hamilton Mayor Tim Macindoe, who championed financial responsibility during his 2025 election campaign, described the decision as confronting "decades of underinvestment" in water infrastructure.
"This landmark decision brings us together as one regional organisation with the scale to plan, invest, and deliver water services more effectively and affordably, for decades to come," said Macindoe, who previously served as Hamilton West MP from 2008 to 2020.
First of its kind in new zealand
The arrangement represents a new model for water service delivery in New Zealand, emerging from the government's Local Water Done Well reforms that replaced Labour's contentious Three Waters programme.
This landmark decision brings us together as one regional organisation with the scale to plan, invest, and deliver water services more effectively and affordably, for decades to come,.
Waikato District Council approved the transfer agreement a day earlier on March 11, with Mayor Aksel Bech calling IAWAI "the first arrangement of its kind in New Zealand."
"By working together at a larger scale, we can invest in the infrastructure our communities need while keeping costs as low as possible for households," said Bech.
The two councils received formal government approval for their joint Water Services Delivery Plan in July 2025, becoming the first councils in the country to achieve this milestone under the new framework.
Waikato river protection central
The partnership includes Waikato-Tainui as a key stakeholder, recognising the central importance of the Waikato River to the region. Protection of Te Awa o Waikato sits at the heart of IAWAI's purpose, reflecting statutory obligations under Te Ture Whaimana o Te Awa o Waikato – the Vision and Strategy for the Waikato River.
"The awa is central to the wellbeing of our communities," said Bech. "As a shareholding council in IAWAI, this ensures future investment in water infrastructure also supports the long-term health of the Waikato River."
IAWAI will manage approximately 90,700 water connections across both council areas when it becomes fully operational in July. The scale of the combined operation is expected to deliver efficiencies that neither council could achieve alone.
For Waikato District residents, water charges will increase by $142 per year – significantly less than the $364 annual increase they would have faced if the district had continued managing water services independently.
The unanimous council votes in both Hamilton and Waikato District signal strong political support for the regional approach, despite the introduction of growth charges that will add $12,500 to the cost of building a new home over 25 years.
Local contractors have already been briefed on the upcoming pipeline of work, with IAWAI promising to prioritise local businesses for the massive infrastructure programme ahead.
