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Legislative Assembly for the ACT: 1999 Week 1 Hansard (2 February) . . Page.. 63 ..

MS TUCKER (continuing):

Water supply is not a competitive market trading in some human-produced commodity and is not at all compatible with privatisation. Similarly, the provision of sewerage services can only ever be a natural monopoly and is subject to significant public health concerns. Even on the electricity side of the business, the transmission system will always be a natural monopoly. The water, sewerage and electricity network businesses of ACTEW are already price regulated because of their monopoly nature. While they may not make spectacular financial returns, they will return a steady profit in perpetuity.

In relation to the electricity retail side of ACTEW, I am disappointed that the Government did not suggest any other options for lessening the risk ACTEW faces from the new competitive electricity market, apart from selling off the whole of ACTEW. Such options could include a strategic alliance or merger with another electricity utility, withdrawal from the most contested parts of the electricity market, or specialisation in particular niche markets, which the Greens have promoted since we were first elected to the Assembly, particularly promoting ACTEW as an energy service rather than just a supplier.

The sense of urgency that the Government has been trying to inject into this proposal is also doubtful. Again, the only area where ACTEW is in a competitive market is on the electricity retail side. There is no sense of urgency to sell on the water and sewerage side of ACTEW. Even on the electricity side there is still considerable doubt about whether the other government utilities that are connected through the electricity grid will be sold. Apart from Victoria, the New South Wales situation is still very unclear because of its election; the South Australian Government's proposal to sell ETSA has stalled in its parliament.

The Government's proposal to franchise the operation of the water supply and sewerage systems is really a charade. A 50-year franchise is so long term that it would have the same effect as a sell-off. The proposal to franchise the water supply and sewerage system but sell the pipes joining them also makes a mockery of the franchise proposal.

The Greens see no justification for transferring a public monopoly to a private monopoly, with all the loss of government control and the shift of corporate objectives from providing a public service to making a profit that this entails. I think it is significant that no other State in Australia has proposed the sell-off of its water supply and sewerage services to the extent that this Government has. This is one area where I believe that the ACT should not be leading the way because of all the problems that could arise. There is also no guarantee that ACTEW's services - particularly the majority part of ACTEW, which is a natural monopoly - will be run more efficiently under private control. The efficiency of an enterprise is related more to its management and the context in which it operates and not necessarily its ownership. ACTEW is already under cost pressures from running as a business corporation and the transfer of its ownership is not going to change that situation.

The problems in Adelaide with the breakdown of its sewerage treatment works and the problems in Sydney with the cryptosporidium scare in the water supply arose from the mere contracting out of parts of their monopoly services to private operators. (Extension of time granted) What worse could happen here if we go one step further and sell the lot?

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