Queenstown Lakes District deputy mayor Quentin Smith’s comments come as concerns mount the plant could be discharging contaminants into the nearby Shotover or Kawarau Rivers.
However, yesterday Mr Smith said there had been some confusion among the public as to the precise issues with the treatment plant.
"I think there’s some confusion around what’s the plant and what’s the disposal field.
"I think it’s important to realise that the plant is not so much the problem."
Once the effluent was treated by the plant, it had to be disposed of, and "that’s where we’re running into the issues".
"It’s supposed to be soaked into the ground [in the disposal field] and drained away, and that just isn’t working for a range of reasons.
"That’s what’s causing the issues with the discharges."
The Otago Regional Council revealed this week it had issued the Queenstown Lakes District Council 10 infringement notices due to incidents at the plant last year related to the alleged improper discharge of contaminants.
The ORC has been tight-lipped about the matter — saying information it holds could potentially become evidence in a possible prosecution.
Mr Smith addressed concerns raised by ORC councillors Alexa Forbes and Michael Laws, who have questioned whether the treatment plant was "broken" and that the QLDC had been prioritising development over ensuring the infrastructure was capable to manage it.
"I think that there is clearly an issue with the disposal field, and we don’t have an answer to that in the immediate future," Mr Smith said.
"I do think we need to seriously consider a suspension or moratorium on further connection to that scheme until we get that resolved."
There was "no question" there was potential across all sectors, including water, wastewater and transport, "for demand to get ahead of infrastructure".
"It is definitely real for us, and we need to make sure we’re keeping up with the infrastructure demand for sure."
In a statement yesterday, the QLDC said it had allocated $77.5 million through its present long-term plan to develop and implement a new disposal strategy for the Shotover wastewater treatment plant.
"This project is under way, commencing with an assessment of options and working towards identification of a preferred disposal solution," a spokesman said.
"Any new solution will require a new discharge consent to be obtained and it is anticipated that an alternative disposal approach will take some years to implement.
"That is the reality of delivering infrastructure projects in New Zealand, and is a challenge being met by local authorities across the country."
Queenstown Lakes District Mayor Glyn Lewers acknowledged a solution would take "quite a while — and that’s the most frustrating thing".
"We’re in an alpine environment, and as a result we’re held to higher standards than other councils — and that’s to be expected."
Cr Laws said the whole situation was a shambles and "nonsense".
"If one wanted a satire on local government in New Zealand, then you’d look no further than this debacle.
"And until we in governance get a full explanation as to what’s right and what’s wrong — from those ORC staff charged with overseeing the [wastewater treatment plant] — I will not be satisfied."
Cr Forbes said the pace of development in Queenstown, and what that meant for the capacity of the disposal field, was a "real concern".
"While it’s good that the council has set aside a lot of money to address the issue, I would like to see some long-term thinking about the disposal field, and what their process is going to be.
"Queenstown has a lot of upcoming development on its books, and there’s a question whether it can sustain the extra connections."