Dear Editor, In 2021 the commodification of Rarotonga’s water was made law. At the time, the water infrastructure was the property of the Cook Island Government. To Tatou Vai (TTV) was just the operator.

Administrators have since told the public that we will only pay for the water we use: “To Tatou Vai (TTV) will only charge for the cost of supplying water”; “... no monies will be allocated to the capital cost of building the infrastructure...”; and “... TTV is prohibited from making a profit.”

Such statements are reassuring, but dishonest.

At the back of the latest Statement of Corporate Intent is a 102-million-dollar line item, discreetly labelled: ‘Infrastructure Asset’. Unbeknownst to the public, TTV has taken ownership of Rarotonga’s water infrastructure.

Tax law requires the book value of an asset to decrease over time (depreciate). For infrastructure, a set amount is deducted from the purchase price each year. Businesses treat depreciation as an expense, to reduce annual profit, and reduce tax obligation.

However TTV does things differently.

The business model is set out in the legislation. The Act directs the water authority to transfer the dollar value of depreciation into a separate Reserve Account controlled by the Ministry of Finance and Economic Management. By law, the funds in this Reserve Account cannot be used to pay the debt.

TTV’s depreciation profile spikes with each new asset, and is on the rise to over $2.5m. That’s $2.5m to fund, each year, in addition to payroll and operational expenses.

The upcoming budget is opportunity for our MPs to interrogate the numbers and challenge user-pays.

Government will pay for a ‘free’ allocation - from general taxation. The public are being forced to pay for the supply of water - through tariffs. But who is paying the depreciation?

Justine Matatoa Flanagan

Te Vai Ora Maori