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Local Government (Water Services) Act 2025

Structural arrangements for providing water services - Responsibility for providing water services - Contracting for providing water services

24: Significant contract requirements

You could also call this:

"Big contracts for water services must follow special rules"

Illustration for Local Government (Water Services) Act 2025

When you are a water service provider, you must decide if a proposed contract is significant. You do this by using your significance and engagement policy, which is mentioned in section 23(2) and (3). You must follow this policy to determine if a contract is significant.

After you enter into a significant contract, you must make sure your water services annual report includes information about how the contracted party is performing. This report must specify the performance indicators you are using to monitor the contracted party and how they have performed against those indicators. You must report on this during the relevant period.

Your significance and engagement policy must cover all matters necessary for determining whether a proposed contract is significant, as mentioned in section 22. It must also explain how to engage with people about proposed significant contracts in a way that is consistent with sections 31 and 32. This policy helps you decide if a contract is significant.

Your policy must include criteria to determine if a proposed contract is significant, such as its value and whether it will create a public-private partnership. It must also consider matters essential to your ability to meet your obligations under this Act. You may also need to consider thresholds, like the value of the contract.

If you are a water organisation, you must get your shareholders' approval for how you plan to comply with the rules about significant contracts.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1004308.

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"Things to do before agreeing to a water services contract"

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25: Third party to give information to water service provider on request, or

"Water service providers can ask you for information and you must give it to them if you have an agreement to provide water services."

Part 2Structural arrangements for providing water services
Responsibility for providing water services: Contracting for providing water services

24Significant contract requirements

  1. For the purposes of section 23(2) and (3), a water service provider must determine whether a proposed contract is a significant contract under the provider’s significance and engagement policy.

  2. After entering into a significant contract, the provider must ensure that its water services annual report—

  3. specifies the performance indicators that the provider is using to monitor and assess the performance of the contracted party; and
    1. sets out how the contracted party has performed against those indicators during the relevant period.

      1. The provider must ensure that its significance and engagement policy addresses all matters necessary for determining—

      2. whether a proposed contract under section 22 is a significant contract; and
        1. how to undertake engagement in relation to proposed significant contracts in a way that is consistent with sections 31 and 32.

          1. Without limiting subsection (5), the significance and engagement policy must contain all criteria needed for determining whether a proposed contract is a significant contract, and those criteria must include—

          2. whether the proposed contract is of high value relative to the revenue that the provider receives from providing the water service to which the contract relates; and
            1. whether the proposed contract will create a public-private partnership; and
              1. all matters that are essential to the provider’s ability to meet its obligations under this Act in relation to the water service to which the contract relates; and
                1. any relevant thresholds (for example, the value of the contract).

                  1. If the provider is a water organisation, it must obtain its shareholders’ approval of the way in which the organisation proposes to comply with subsection (5).