Have QLDC’s $20 million contractors abandoned the broken Shotover sewage plant?

Everyone runs for cover as sewage project flows closer to a nightmare scenario.

There’s increasing evidence that Veolia, the $45 billion French international water and waste giant, has effectively walked away from trying to manage the QLDC’s non-functioning Shotover sewage plant.

Crux has reported extensively on the QLDC’s illegal dumping of partially treated effluent into the Shotover and Kawarau rivers for at least the past five years. The council has ignored two abatement notices and six infringement notices from the regulator, the Otago Regional Council. So far there’s been no prosecution.

The problems centre on the wastewater plant’s disposal field. The field has never worked properly due to a combination of poor design and poor maintenance. The QLDC’s resource consent requires that fully treated effluent only be discharged into the land directly underneath the disposal field.

Instead, its being discharged, partially treated, from an overflow pipe, through a recreation reserve, into the Kawarau River often at levels hundreds of times greater than public health limits.

So far, the QLDC has either denied the problem exists or says that it is already being fixed. Neither statement appears to be true.

Crux has ben speaking with many of the engineers, consultants and contractors who built and run the plant. They all agree that the QLDC does not have the necessary knowledge or project management skills to run the plant. Instead, the council has relied on a string of disconnected third party consultants who have been paid tens of millions of dollars only to make the problems worse.

It's turned into a problem that Crux believes is not only an environmental crime but a financial meltdown that could cost the QLDC ratepayers well in excess of $200 million.

The real shock is that we know of at least four occasions when council managers were told of detailed mitigation measures, but decided to ignore that advice and literally dig a deeper hole for themselves and local ratepayers.

As recently as January 2024, just 12 months ago, an expert with advanced knowledge of the plant was hired by QLDC - in parallel with the council’s Veolia contract. He produced good results and strong progress in preventing the 100% failure of the disposal field.

• January 6, 2024. Remedial work from an external consultant allowed sewage levels to drop within the disposal field - but it is supposed to be dry gravel. Note the complete absence of the 2 kilometre long wall along the fence line.

At the same time (January 15, 2024) Crux published footage of effluent flowing from one of the main oxidation ponds into the Shotover River. QLDC said this was due to heavy rain and that the effluent had not reached the river. We now believe a Veolia contractor may have caused this situation by turning off a vital pump in the nearby UV filtration building. There’s no doubt that the sewage reached the Shotover River.

• The January 15, 2024 overflow - straight into the Shotover River.

This was the beginning of a number of false or unsubstantiated claims from the QLDC.

Little did we know that at about the same time (January 25 2024) the regulator, the Otago Regional Council, had investigators documenting a far more serious leak into the Kawarau River – one of many.

• Illegal overflow from the Shotover disposal field into local rivers has been happening systemically for most of 2024 and still continues.

The expert consultant managed in January 2024 to make temporary progress in sorting out the blocked disposal field but now says that even though he gave the QLDC clear instructions on how to resolve the situation he now believes that Veolia as the council’s plant operators, refused to follow this advice. We have no idea why this would happen.

• This is what the disposal field is supposed to look like - dry gravel beds with buried filtration baskets.

Not only did the field quickly become blocked again but this year it was worse than ever before. This could be attributed to local population growth and design problems with the rest of the sewage plant. Only liquid waste was supposed to reach the disposal field but since day one back in 2019/2020 solid waste has been flowing through the UV sterilisation structure into the disposal field.

The council’s reaction to these issues was not to find a solution, but to cover the problem up.

They, or their contractors, built a 2-kilometre, 2-metre-high wall around the blocked field and allowed it to fill up with sewage and then overflow into our local rivers – every day for what we estimate to be 6 – 9 months, during most of 2024.

Millions upon millions of litres of partially treated sewage flowed into the Kawarau River - a river that has a special conservation order protecting it.

We don’t yet know who gave the orders for the wall to be built or from what budget it was funded from.

• Partially treated sewage flows towards to Kawarau River from the disposal field. The 2 kilometre earth wall can be seen beyond the disposal field fence on the left.

Photos from early 2024 show the disposal field starting to drain properly before the recommended maintenance was stopped and the wall was built. The photos clearly show that the field is clogged with solid human waste – waste that should not exist if the rest the plant was operating was it was designed to do.

• January 2024. Proper maintenance allows disposal field levels to drop (top image) but exposes solid human waste (lower image) that is stopping the field from working and technically should not be there if the rest of the plant was working.

So – where is Veolia in all of this?

Crux has already reported that a number of former Veolia employees have recently resigned due to what they believe is mismanagement of the project and being asked to illegally dump sewage into local rivers. Others say they been made scapegoats for problems higher up in the management chain – at council level.

We understand that Veolia may have changed strategic global direction away from wastewater and towards the potentially simpler and more profitable area of decarbonisation.

Veolia had not replied to Crux questions or a request for comment.

Whatever the reason the company seems to have lost all meaningful interest in the Shotover wastewater plant. And yet the QLDC is paying Veolia $5.5 million dollars each quarter or $22 million a year for various projects including the Shotover plant.

• QLDC’s accounts show a $5.5 million payment to Veolia every three months - this is the quarter to June 2024.

Over the 2024/2025 holiday period we’ve made a number of check visits to the plant and found no Veolia staff on site – in spite of a filter system failure alarm sounding for 48 hours and signs of a break developing in the disposal field wall.

It’s already collapsed twice in its less than 12 month long life.

• January 10, 2025. A new break developing on the disposal field wall (beyond fence) - centre of image. No sign of any Veolia staff on site.

What Next?

The engineering firm Beca told QLDC councillors in 2023 that the disposal field was effectively beyond repair and not fit for purpose. Good maintenance could make it work for a time …. but it was “too small because of the clogging, shallow water table and hydraulic performance limitations.”

Beca proposed what are known as Rapid Infiltration Basins as the answer and we understand that’s the focus of around $70 million dollars on the current ten year plan.

Beca pointed out that even in 2023 some of the Shotover plant’s resource consent sewage limits were already being breached.

• 2023 Shotover effluent data - Beca/QLDC.

However, the Beca advice to QLDC in 2023 came with a long list of warnings:

• Any solution is expected to come at significant cost. At this stage a provision of $66.1M has been made in the 2024 LTP.

• Any solution or change to the mechanism of wastewater disposal will require a new ORC discharge consent

• Discharge consents in this location are likely to be contentious and could become prohibited under the new ORC Land and Water Plan.

• Consenting, design and construction of a new disposal solution will take significant time to implement (three years or more).

• A collaborative approach to solution development with Iwi will be essential to achieve a successful project outcome.

There’s no sign now, in early 2025, of any work on the RIB solution having started or consent being applied for.

• QLDC’s $70 million solution - Rapid Infiltration Basins (in green) - but work has not started and consent may not be possible. The project could take three yers or longer to complete even if/when started. Current disposal field in blue.

The rest of the plant is being upgraded – that will increase pressure on the disposal field

The QLDC is currently upgrading the “front end” of Shotover plant. But that work still requires a fully functioning disposal field – with greater capacity.

The final stage (pre-disposal field) of the new treatment process is a circular holding tank that should contain water that is almost clear. Instead, we are getting reports that the current tank contains a lot of solids and is nowhere near the quality required or specified. Around 250 litres a second of sewage was flowing into this plant over the current holiday period from residents and tourists.

• The water in this tank should be almost clear. Note the black storage bags in the background that contain millions of litres of untreated sewage. New circular tank above current tank.

To make matters even more complex, Ngāi Tahu are taking the Crown to court next month in Christchurch over poor management of the South Island’s water resources. Potentially not a good environment in which QLDC could expect an easy ride in getting resource consent for a new treatment solution.

That solution may not even work as it depends on drainage into the land, and the Shotover experience so far shows the ground is unsuitable compacted silt with a high water table.

Some sources are telling Crux that even if the RIB solution goes ahead the true cost may be closer to $200 million including all of the complications around the current disposal field.

And that may be the fairy tale ending compared to what is more likely to happen.

The Nightmare Scenario.

There’s already a strong hint of how quickly this entire situation could go from “terrible” to “much, much worse.”

Let us list the ways:

• QLDC will have trouble getting rid of the millions of litres of mainly untreated sewage stored in massive black flexible bags/tanks at the Shotover site. They’ll need resource consent to dump it …. But who would want it?

• Iwi may refuse resource consent for the RIB solution – or any other solution – and there’s no way this can be forced.

• Queenstown housing and property development may need to come to a 100% halt. No sewage treatment – no growth. The plant can’t cope with the current population.

• Project Pure in Wānaka may encounter the same or similar problems.

• Veolia may terminate or resign from the Shotover contract leaving QLDC staff to run it.

• QLDC may have to use increased three waters debt levels on offer from the Government to keep the Shotover plant functioning at historic levels leaving zero funding for improvements, better water or future growth – plus much more ratepayer debt and more huge rate rises. In practical terms that means total QLDC debt of more than $1 billion before 2030 and more rate rises in the 20 % range.

• Public health risks may produce a disease outbreak from effluent.

• Queenstown loses its reputation as a “clean, green” tourist destination – already wearing quite thin.

• The Shotover crisis exposes further examples of QLDC not being able to manage complex project via third party contractors – with the attendant cost running into hundreds of millions of dollars.

• QLDC may become insolvent within current and future (3 waters) debt limits.

Where to start ….

As Crux has said on many occasions for the past seven years to QLDC.

“Tell us the truth.”