The government's Three Waters project is moving from four entities to 10 with its start date pushed out by two years.

Ironically, its move to rebrand the project as the "Affordable Water Reforms" comes with a bigger pricetag for ratepayers than under the old model.

The government says the change will mean individual councils will have a bigger say over the water service entities.

Photo: RNZ / Samuel Rillstone.

In a statement, Local Government Minister Kieran McAnulty says the entities will also start delivering water services from July 1, 2026, at the latest, two years after the 2024 start date promised by his predecessor.

Hipkins had tasked McAnulty - who took over the portfolio from Nanaia Mahuta after Hipkins became prime minister - with taking the reform programme back to the drawing board after fierce backlash from councils and political opponents.

The reforms are aimed at helping curb the costs of upgrading water infrastructure across New Zealand, which was reviewed by the previous National government after the 2016 Havelock North campylobacter outbreak.

The review found annual water rates bills would need to increase by up to $9000 by 2051 to pay the up to $185 billion bill for the necessary upgrades and maintenance, as well as preparing for climate change.

Today's announcement has an update to that figure, suggesting increases of up to $9730 by 2054.

The government now says its 10-entity solution will cut on average up to $5400 off that bill, but that compares to the up to $8200 in estimated savings by 2051 claimed by Nanaia Mahuta under the four-entity model in June 2021.

This means the new model would be delivering what appears to be up to $2800 less in savings to households, but the comparison may not be direct.

Some districts would see much greater savings than the $5400 figure - such as Waitomo, expected to see what would be a $21,500 water bill cut by $18,730 under the reforms, an 87 per cent cut.

McAnulty talks up the benefits of moving to a 10-entity plan.

"Under our proposal to establish 10 entities, New Zealand households will still make big savings," he says.

"The feedback has been overwhelmingly clear that our water infrastructure deficit needs to be addressed now if we're to save households from ballooning bills that will make water unaffordable, but also that the reform programme must be led at a regional level - we have listened closely and absolutely agree.

"By extending the number of publicly owned water entities to 10, every district council in the country will have a say and representation over their local water services entities through regional representative groups."

He says these representative groups will include "a partnership between council representatives and iwi/Māori that will provide strategic oversight and direction to the entities".

Answering media questions, Prime Minister Chris Hipkins says the 50-50 policy for mana whenua and the councils on the representative groups, "it's not co-governance, and it wasn't co-governance".

"There will be regional advisory groups that will include representation from mana whenua and of course representation from every local council.

"The advisory groups are only one form of that, there's also an ability for example for the Te Mana o Te Wai statements, and we've introduced an equivalent for other significant interested parties in water use to also have a say in that."

The prime minister says the modelling suggests fewer groups lead to greater efficiency, "but this is still going to be significantly more efficient than what we're doing now".

McAnulty says he has listened to the feedback from councils and has been working closely with local government leaders ahead of the decision.

"These reforms are absolutely essential. Leaving things as they are will mean an unaffordable rate bill."

About 30 councils banded together under the Communities 4 Local Democracy (C4LD) group to oppose the government's proposals, and in a statement said they were disappointed the government had refused to make meaningful changes.

They say it has been turned into an election issue, rather than seeking consensus.

C4LD co-chairs Helen Worboys and Dan Gordon say New Zealanders will see it is the same plan with a different name.

"Simply adding more entities and changing the name is a desperate attempt to save this plan and attempt to show they've done something with the $100 million they've sunk into this process so far.

"Unfortunately, instead of listening to what communities are asking for, the government once again thinks it knows better and is serving up a reheated version of the same unpalatable, unpopular plan."

-RNZ. Addtional reporting by Russell Palmer/RNZ.

In a nuthsell

· 10 new regionally owned and led public water entities to be established.

· New approach avoids a rates blow out and delivers savings to households between $2,770-$5,400 per year by 2054.

· Entities will be owned by local councils on behalf of the public, and entity borders to be based on existing regional areas.

· Each entity to be run by a professional board, with members appointed on competency and skill.

· Strategic oversight and direction to be provided by local representative groups with every local council in the country, as well as mana whenua, getting a seat at the table.