The following extract from Water NZ's submission to the Inquiry into Havelock North Water is typical
2. The responsibility for the provision of water supply in urban environments in New Zealand lies with Territorial Local Authorities – district and city councils, or with a Council Controlled Organisation. (Section 124 of the Local Government act)
Section 124 of the Local Government Act 2002 is actually just a definitions section. It can be found in a part of the Act specifying the obligations of local government. There is absolutely nothing in sections 124-137 that either puts an obligation on a council to become a water supplier or gives it anything like a monopoly. Mind you, s.130 prevents a council from exiting water supply once it is already doing it.
Councils do have a statutory public health role to assess the quality of water supplies in their territory. I would have thought that that obligation had been largely superseded by the Ministry of Health's upgraded role in the Health Act 1956.
In fact, a quick read of the Health Act 1956 Part 2A Drinking Water only once mentions territorial authorities. This is relatively new legislation that defines how all water suppliers are regulated by the Ministry of Health. In section 69ZH non-council suppliers have to let their TA know if they plan to restrict future access to their supply. It isn't obvious from the legislation what the TA is supposed to do with that information. In all other respects there is no distinction between private and public suppliers.
Mind you, once a council is a water supplier it has all the same legal obligations as anyone else. The distinction really isn't important in the context of the Inquiry.