Swathes of South Auckland is now painted red. No, not the political kind, but rather ‘red zones’ that seem to have recently been applied to areas of South Auckland with infrastructure restraints - bringing some development plans to a screaming halt. This has been done behind the scenes without public notification to the shock of many.
This is a recent and developing issue (no pun intended) that is unfolding at the time of writing – Lateral Partners are not currently aware of any official public notification or publication regarding this topic, however, have been made aware via some developers and by some digging online. We are writing this to help raise awareness to those who may be looking at potential development sites and recommend undertaking some further due diligence specifically around water supply, stormwater and wastewater infrastructure.
Recently, at Lateral Partners, we have been hearing reports of developers who have had their RC or EPA applications declined due to capacity constraints in wastewater networks and being advised that these applications will effectively remain declined until infrastructure upgrades are carried out amongst the network – the issue being that some of which are not planned until 2030+ (link here - page 6, section 25 referenced below). And even then, with all the press around the Auckland Councils financial hole(s) it may even be later down the line.
Now if you’re sitting here thinking ‘My EPA has already been approved so I can stop reading now’ not so fast! If you have your project on hold and haven’t yet completed the civil works, the word on the street is that once expired it will not be reinstated if your site is located in one of these red zones. Better get to work!
It's also important to note that this is occurring separate to the 50,918 sites in Auckland that Watercare identified as being subject to limitations related to the provision of water and wastewater services as part of the PC78 (more info on this can be found here). This means the areas being affected in the most recent scenarios we are seeing are outside of the overlay areas identified in the PC78 map.
Papatoetoe and Ōtara are the first areas to have been affected by these capacity restraints leading to cancellation of development in the surrounding areas. However, we have even heard of developers in Wellsford now receiving the same message of new connections to the network being declined until upgrades to the infrastructure are carried out (estimated in 2028+). This suggests this issue could stretch wider into other areas of Auckland which have also experienced rapid intensification.
As there haven’t been any official publications on the topic at this time, there is no official map available to determine exactly where these most recently affected zones are, however a suspected common denominator is that it affects sites that are dependent on the Ōtara Pumping Station.
Papakura is another area that has been facing similar issues for some time now. In 1997 Veolia was awarded a 30-year contract by Watercare to undertake the maintenance of water and drainage pipes in Papakura. This means Veolia currently controls the water supply, stormwater (SW) and wastewater (SS) maintenance as well as any new connection requests.
Developers EPA applications are being actively declined by Veolia advising that unless the requested upgrades are carried out to the network at the cost of the developer, their development is not permitted to go ahead. This sounds like it wouldn’t immediately be deal breaker if you were able to perform the upgrades…however, the cost ranges greatly based on the extent of the upgrades Veolia has deemed to be required. Often these pipe upgrade requests are in excess of 100+ metres, some even 1+ kilometres of public lines! Which can add up to an eye watering cost ranging anywhere from hundreds of thousands to even millions and as a result quickly render the project unfeasible.
There are many developers who have lost out as a result who have spent costs in land acquisition, design and obtaining RC before hitting a brick wall at EPA stage and needing to abandon the project.
Veolia’s contract will be coming up for review in 2027 and includes the option for it to be extended by a further 20 years. Considering the uproar their approach has caused in the development community it will be very interesting to see what the result of this review brings. For now, it’s no longer enough to ensure SW and SS connections are available nearby or on site for due diligence of development potential, you also need to know if Veolia will give you permission to connect to them.
We recommend working closely with your planner, civil engineer and surrounding consultants if you currently own a development site or are looking to purchase one in Auckland to help identify restraints that might apply as part of your due diligence. Another option to explore is approaching Watercare for a pre-project assessment, which may cost somewhere around $800, to identify any restrictions or capacity restraints which may apply to your site upfront before acquiring a site or going through the RC/EPA process. A measure twice and cut once approach if you will.
If you have any questions or can provide any further information on the topic we would love to hear from you!
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