The headline in today’s Mercury Newspaper, claiming TasWater needs to lift its game, cannot go unchallenged.
CEO Michael Brewster’s says “the organisation is already working hard to achieve its targets of upgrading essential water and sewerage services across Tasmania.”
“To suggest the process can be sped up by immediately borrowing more money is simplistic and financially irresponsible with that debt imposing more financial imposts on every Tasmanian as a user of water and sewerage services.”
“TasWater is all too aware of the challenges it faces, a challenge that has been more than 30 years in the making.”
It is only 2 years since TasWater was formed from the four businesses established as part of our water and sewerage reform process and TasWater can point to a range of improvements and efficiencies already in place.
The challenge going forward is to bring many of our aging and failing assets up to scratch and fix the drinking water issues in small towns.
As well as upgrading our assets to meet modern compliance standards TasWater needs to provide increased capacity for new developments, address major regional infrastructure challenges such as Launceston’s combined system and its sewerage system, potentially remove Macquarie Point sewerage treatment plant and rationalise Hobart’s sewerage system.
This is without considering the cost to introduce services to places like the Southern Beaches.
All this is clearly outside Taswater’s financial capacity, and would be well in excess of the $1 billion estimated by the Government in 2009.
To imply TasWater has the capacity to self-fund these projects through increased gearing is not realistic. The reality is external funds will be needed.
“Additionally, to suggest borrowings should be permitted to blow out to a gearing of 60% would make TasWater one of Australia’s most indebted water authorities and potentially see us hamstrung by the cost of interest, ultimately having to be paid for by customers.”
This would expose customers to future interest rate movements and falls well short of the current government’s mantra that it is being fiscally responsible in its quest to reduce and manage Tasmania’s overall debt.”
It is inevitable, as we invest in critical upgrades, our gearing will increase with the need to borrow more funds. The challenge is to do this responsibly by implementing a plan for the long term which does not create an unnecessary burden for future generations of Tasmanians. ”
“I had hoped the State Government would have stood firm on supporting TasWater and its owners to get on with the job of fixing these asset and services for Tasmania rather than using us as a political football.
“TasWater’s work involves a delicate balancing act-we need to invest in our assets but without exposing the community to significant price rises into the future.”
“This is a long run challenge which will continue long after any single political cycle.”
Michael Brewster says “TasWater has a vision for the future and I urge the state government and the community to join TasWater and our owner councils on a sustainable and financially responsible road to achieving this vision.”
Simon Pilkington, TasWater
