Structural reforms of water utilities in Australia examined.
Keynote speaker from the Australian Water Association- Water NZ Conference, 17 October 2013, 9.00 am
Significant institutional reforms to water utilities in Australia have largely been successful; but there were lessons
to be learned, says Graham Dooley, the President of the Australian Water Association at today’s NZ Water conference in
Hamilton.
In the 1990s 150 Victorian water utilities owned by local bodies were brought together into 17 larger utilities. “This
brought significant economies of scale into both water and sewage services,” he told the conference.
Graham Dooley said that prior to the reforms there was considerable fear of disruption of services.
“As it transpired, there was no disruption despite the enormity of the reforms. Additionally the career prospects for
water professionals were enhanced.”
Proper management of the reform process was key to the success across all the disciplines involved in delivering water
and disposing of waste. These included accountants, planners, engineers and administrators.
Efficiency and a desire to lift the standard of water services were the drivers in the Australian reforms.
“Many of the smaller towns and districts in Victoria were too small to access and service the capital needed to bring
their water services up to standard. When they joined in with the larger towns and cities, the larger customer catchment
provided the necessary size and numbers to spread the cost of upgrades. More customers paid less per head for improved
services.”
The Australian reforms are not unique, the conference was told. A similar story was seen in England and Wales in 1976
when hundreds and hundreds of little utilities were amalgamated into ten big ones with astounding improvement in
efficiencies, enhancing services levels and careers for water professionals.
The Thatcher reforms followed in 1989. Margaret Thatcher’s government sold the water utilities; moving its ownership
into the private sector in a blaze of criticism.
Baroness Thatcher later explained the reason for privatisation. She argued water utilities needed enormous sums of
capital to bring the UK water standards up to European Community levels and the British Government could not afford it.
Hindsight shows that move was successful.
Shares in those companies today are generally held in conservative international superannuation funds who seek low,
long-term, stable returns on their investments.
The privatised water utilities are heavily regulated by an independent drinking water inspectorate, an independent
economic regulator and an independent environmental regulator. This ensures customers receive potable water, their
sewage is disposed of effectively and that costs are reasonable . In reality it is business-as-usual delivering high
standard services.
“The private ownership model has not been for everyone,“ he said, noting that there was no support for it in New
Zealand. Support for greater engagement of investment capital in all types of infrastructure, including water utilities,
was growing in Australia. Sydney Water recently engaged A$2.1 Billion of investment capital in its desalination plant to
replace Government debt.
Graham Dooley repeated his point that good management of reform was crucial with clear objectives and a good
communication plan for the community and stakeholders. He told the conference that all reforms are not ‘good news
stories’; citing problematic processes in the Queensland reforms. “However, these problems could have been avoided by
better planning and management,” he said.
Ends…/
Background
Graham Dooley – Chair, Australian Water Association
Graham has been a leading figure in the Australian water industry for many years in both public and private sectors.
Following a 20 year career with the public utility Sydney Water, during which he held a number of management roles,
Graham spent 17 years as Managing Director of United Utilities Australia Pty Ltd, a UK owned company which was
successful in winning infrastructure projects across Australia for public authorities, local government and industry.
Graham is also Chairman of Blue Sky Water Partners Pty Ltd, an investment management company, Chairman of Osmoflo Pty
Ltd, Australia’s largest desalination company, Chairman of Water Utilities Australia Pty Ltd, an investor in water
infrastructure, the President (Chair) of the Australian Water Association, the peak Australian water industry
organisation and of Water Australia, the industry's lead export business body. He is a Fellow of both the Institute of
Engineers Australia and the Australian Institute of Company Directors.
Graham holds a Bachelor of Science and Bachelor of Engineering (Hons) from the University of Sydney and a Masters in
Public Administration from the American University, Washington DC.
ends