Latest / Best of Business / Jamie Sinclair: Watercare CEO on the utility unveiling $15.2 billion infrastructure investment programme

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Jamie Sinclair: Watercare CEO on the utility unveiling $15.2 billion infrastructure investment programme · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk ZEDB. Follow
• 0:12
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• 0:16
  Speaker 2: Aukan's Watercare needs to raise a billion bucks in new
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  Speaker 2: debt and it's going to spend more fixing pipes. Increasing
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  Speaker 2: budget for the next decade. They're going from thirteen point
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  Speaker 2: eight billion to fifteen point two billion. Nine new big
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  Speaker 2: projects announced, including a new pipe to the Waikata River,
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  Speaker 2: new treatment plant and more than four billion on fixing
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  Speaker 2: old pipes. Jamie Sincleair Watercare CEO with me tonight, Jamie good.
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  Speaker 3: Evening leaving ran Thanks having me on.
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  Speaker 2: Hey the capital raise the Sorry the debt rays I
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  Speaker 2: should say, you guys are quite big burrowers.
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  Speaker 3: Hey, we are. We'll continue that program. You know, it's
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  Speaker 3: important that we get the funding streams we need to deliver.
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  Speaker 3: And yeah, we're on out of option. Through the work
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  Speaker 3: that the government has enabled on the reform, we've now
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  Speaker 3: got that financial separation from council. So we've got to
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  Speaker 3: go find our own debt funding, which we've been pretty successful.
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  Speaker 3: And I have to say, over the last year or so,
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  Speaker 3: how much of.
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  Speaker 2: The debt that you are having to cover is inherited
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  Speaker 2: from the old council and how much is new.
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  Speaker 3: Yeah, that's a good question. We've we're in the process
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  Speaker 3: of replacing effectively a council loan to us, a related
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  Speaker 3: party loan, if you like, a four billion with our
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  Speaker 3: own debts. So it's basically our switching of that switch
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  Speaker 3: out of that old debt and into this into our
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  Speaker 3: new funding streams, and then we'll be progressively increasing our
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  Speaker 3: debt over time, just as we as we need to
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  Speaker 3: to fund the capital program. Obviously, we're excited today to
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  Speaker 3: announce our ten year capital investment program for three point
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  Speaker 3: two billion, which, yeah, so we will need we'll need finance,
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  Speaker 3: financing and funding for that for that, for those works.
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  Speaker 2: It's massive. How close are you to tapping? How high
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  Speaker 2: can you go?
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  Speaker 3: A really mind for that, We've got a very strong
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  Speaker 3: credit position, and we've got to make sure that we
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  Speaker 3: are proudent sensible with a debt financing. So we are.
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  Speaker 3: Over the course of the ten years, we'll probably get
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  Speaker 3: upwards of nine to ten billion dollars of external debt funding,
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  Speaker 3: and the key is that we are maked. We're being
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  Speaker 3: sensible with that in terms of making sure that we're
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  Speaker 3: always in a financiable position. But the beauty of the
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  Speaker 3: debt position is rather to spread the cost of this
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  Speaker 3: new investment that we've announced over us longer periods of time,
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  Speaker 3: as opposed to sort of lumping all on today's customers.
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  Speaker 3: We are splitting it out of today and into the
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  Speaker 3: future as well.
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  Speaker 2: Jamie on fixing old pipes, how I mean, first of all,
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  Speaker 2: must be so annoying because you know, I've just the
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  Speaker 2: thoughts of it. But the cost four billion dollars. How
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  Speaker 2: expensive is it to get that old infrastructure up out
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  Speaker 2: of the ground and get it replaced.
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  Speaker 3: Yeah, it is complex, ran you know, obviously we're dealing
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  Speaker 3: with established parts of wind and you know, but what
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  Speaker 3: that's something we haven't you know, to the New Zealand.
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  Speaker 3: I didn't think it's done very well that when you're
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  Speaker 3: actually looking after we actually own the water care managers
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  Speaker 3: about eighteen billion dollars worth of our sets in a
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  Speaker 3: large portion of that is the twenty thousand so kilometers
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  Speaker 3: of pipes. So and it's across the city. Will we
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  Speaker 3: will be in more of our communities and more of
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  Speaker 3: our streets over the next you know, ten twenty thirty years,
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  Speaker 3: And that's an ongoing program. But you're right, it's complex,
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  Speaker 3: it's challenging, and we yeah, there will be disruptions, so
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  Speaker 3: we'll be we'll be asking our communities and engaging with
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  Speaker 3: them because you know, we understand that we want to
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  Speaker 3: get in and out of the people's streets as quickly
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  Speaker 3: as possible.
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  Speaker 2: Twenty thousand kilometers. Did you say, of pipes, what split,
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  Speaker 2: what proportion needs replacing?
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  Speaker 3: Well, we've got we have got an aging network. So
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  Speaker 3: a lot of a lot of our pipes were put
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  Speaker 3: in the ground and around the nineteen sixties, so you know,
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  Speaker 3: they're coming towards the end of their life and we've
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  Speaker 3: we've got this now bow wave. I suppose of renewals,
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  Speaker 3: which is which is not an uncommon thing, but I
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  Speaker 3: think what we haven't done well enough in the past
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  Speaker 3: is to prioritize those renewals. So we are through the
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  Speaker 3: investment program. We've an out for a big chunk of
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  Speaker 3: that is actually say look, we're committing renewals money every
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  Speaker 3: year to make sure that we don't slip back and
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  Speaker 3: spend that money on something else, because if we don't
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  Speaker 3: look after what we got, the cost gets bigger into
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  Speaker 3: the future. It's you know, it's pretty common sense, but
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  Speaker 3: it is. You know, it is hard when there are
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  Speaker 3: some other pressing needs and Auckland is growing as well.
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  Speaker 3: We've got to make sure we cater for that growth.
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  Speaker 2: We can we cope with more housing intensification Jamie.
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  Speaker 3: Yeah, there's parts of our network where we are really
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  Speaker 3: well stuff. I think you might have heard the Center
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  Speaker 3: Interceptor was successfully completed last week in terms of fully operational,
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  Speaker 3: and that's a four point five diameter wasteboater tunnel which
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  Speaker 3: will help us with that capacity and growth. The Waycuter
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  Speaker 3: pro project actually will. It is all about growth, that's
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  Speaker 3: about enabling the water that Auckland will need over the
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  Speaker 3: next ten or twenty years. So a large portion of
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  Speaker 3: our program we announced today does does cater for the
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  Speaker 3: growth that we're expecting across Auckland. The shift where it
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  Speaker 3: will turn up, I suppose Ryan sometimes is a challenge
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  Speaker 3: and the timing, but you know, we're doing our best
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  Speaker 3: to make sure that we're adaptive and putting the pipes
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  Speaker 3: and treatment plant capacity in the right place at the
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  Speaker 3: right time.
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  Speaker 2: So the numbers the politicians are talking about the one
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  Speaker 2: point four million and whatever over how long those numbers
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  Speaker 2: don't scare you. It's just a matter of where and when,
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  Speaker 2: the timing and sequencing.
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  Speaker 3: It's the timing and sequencing of everything, and so that's
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  Speaker 3: how we've designed our program to be sequenced really smartly.
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  Speaker 3: But also and you know, we're committing today which has
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  Speaker 3: been exciting to commit to some programs of work which
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  Speaker 3: I know got the industry, our contract partners and consultants
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  Speaker 3: and design is really excited about getting underway with these works.
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  Speaker 3: But yeah, it's about getting that sequencing right. It is
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  Speaker 3: a challenge, but you know that's you know, that's Auckland.
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  Speaker 3: We're growing. We want to support the growth and well
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  Speaker 3: being of our people. So yeah, we've got to make
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  Speaker 3: sure we get that that is right as we can.
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  Speaker 2: Good stuff. Appreciate your time, Jamie, Jamie Sinclear watercre CEO.
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