Independent NSW MP Justin Field has warned that Sydney Water customers are facing higher bills as a result of the failure of the NSW Government to invest in large scale water recycling and efficiency projects.
The warning comes as the NSW Water Minister has instructed the operator of the Sydney Desalination Plant to commence planning to double the capacity of the current plant and has directed the state’s pricing regulator to consider the impacts an expansion would have on water prices.
On 19 December 2019, NSW Water Minister Melinda Pavey wrote to IPART requesting a review of how capital costs and the delivery of water from an expanded plant could impact on water prices. Under the current 2017 pricing determination Sydney Water customers are paying around $130 a year for the operations of the desalination plant. An expanded plant would deliver 250 million litres a day, providing up to 30% of the city’s daily water needs.
Independent NSW MP Justin Field said, “No one doubts we’re in one of the worst droughts on record, but Sydney has a water supply problem in large part because successive Governments have failed to invest in water recycling and efficiency and have left the city badly exposed to long-term droughts. Sydney residents are now being asked to pay for that failure. Desalination is great for the water business because there is more water to sell, but it costs customers and the environment dearly. This expansion might be necessary now but it shouldn’t be done without serious commitments to water recycling and efficiency.
"The NSW Government will take $2.5bn in profits out of Sydney Water between 2018 and 2021 [1]. This is money that has already been paid by Sydney Water customers and should have been directed to major water recycling projects, water efficiency and fixing the city's leaking pipes, not taken in profits. Customers will be furious they are being asked to pay more for an expanded and expensive desalination plant when Sydney Water has been making substantial profits at the expense of addressing the city's leaking pipes and investing in water recycling.
“A prudent approach would be to use the good times to prepare for bad times but the Government has been profiteering during the good times and now that the drought is biting their solution is to charge people more for a service that they have already paid for. What we need are clear targets for Sydney Water in terms of water recycling, per-person water use and leakage reduction. The Government should then redirect its billions in dividends to those projects until the targets are met. That’s how we build a world class water service for Sydney,” Mr Field said.
[1] See Page 6 of the 2018 Sydney Water Statement of Corporate Intent for dividend figures (here)
