Sydney Water Looking at Privatisation

Documents Reveal:Sydney Water Looking at Privatisation

Internal documents show Sydney Water considered outsourcing the treatment of water discharged into rivers and oceans, calling into doubt Baird government claims that it has "no plans" to privatise the utility.

The documents, obtained by Fairfax Media, reveal the state-owned Sydney Water hired consultant firm Farrier Swier to find ways to increase private involvement in the state's 28 wastewater plants, thought to be worth up to $5 billion, which treat water from sinks, toilets and drains.

Water Minister Kevin Humphries has consistently rejected claims the government wants to privatise the state-owned Sydney Water, including wastewater plants, despite the government's support for the sale or long-term lease of assets to fund infrastructure projects. But NSW Labor pointed to recent moves to offload parts of Hunter Water to the private sector, including the operation of treatment plants, warning that Sydney Water is next in line.

A report to Sydney Water by Farrier Swier in late 2012 explored "increased private participation" in wastewater plants such as those at Bondi, Malabar, North Head and Cronulla. Farrier Swier's director, Geoff Swier, was a key figure in the Kennett government's power privatisation reforms in the 1990s.

The discussion paper found private sector participation in treating Sydney's wastewater had "no clear business case" if it involved existing plants. But it said Sydney Water should look more broadly at private involvement, including new sewage plants in growth areas and services such as water supply.

Separate documents obtained by Labor under freedom of information laws show that in late 2012 the government wanted private wastewater options explored "within [the] election cycle" and that finance officials had been instructed to advise on the move.

Those documents reveal that Sydney Water's sewage treatment plants had an implied value of up to $5 billion.

Infrastructure Australia, which advises governments, has recommended that Sydney Water be sold. A NSW Commission of Audit in 2012 also said options for private participation in wastewater treatment should be investigated.

The consultants found there were "no obvious drivers" for such a move, because Sydney Water could afford any necessary investments in existing plants and there was little scope for efficiency gains.

However it said there could be benefit in private involvement in new plants. Turning other water services over to the private sector should also be considered, especially if "freeing up government funding" was a key aim, it said.

Source: The Sidney Morning Herald

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