O'Farrell's attempt to fatten up desalination plant stopped in tracks by IPART


The O'Farrell Government's attempt to fatten up the Sydney Desalination Plant for privatisation has been stopped in its tracks by the Independent Pricing and Regulatory Tribunal's (IPART) decision on prices, Shadow Water Minister, Luke Foley said today.

The Labor Opposition today also questioned whether it would be worth proceeding with the 99-year lease, given the asset is now far less attractive to the private sector.

"IPART's decision today will result in $99.5 million less revenue flowing through to the Sydney Desalination Plant than what the O'Farrell Government had originally sought," Mr Foley said.

"This decision has thrown a spanner in the works of the O'Farrell Government's plans to fatten up the Sydney Desalination Plant for privatisation.

"We now have to question whether the Sydney Desalination Plant asset is attractive enough to the private sector and if a 99-year lease will be the best option for NSW water users.

"In his first month in office, Finance Minister Greg Pearce declared the Sydney Desalination Plant a monopoly supplier in an attempt to fatten up the asset for privatisation.

"This decision required IPART to make a price determination for water supplied by the Sydney Desalination Plant for the first time.

"The Sydney Desalination Plant – owned by the O'Farrell Government - then sought a 7.8 per cent rate of return, which if granted, would have fattened up the asset enormously in time for the government's planned 99-year lease.

"IPART has today emphatically rejected the request, granting only a 6.7 per cent return over five years.

"IPART's decision means the Sydney Desalination Plant will bring in $20 million less each year than what it had originally sought.

"While today's decision won't have an additional impact on household water prices, Sydney Water is still seeking a 31 per cent increase to household water bills over the next four years.

"The average household will still be forced to pay an extra $969 in jacked up water bills over the next four years because Barry O'Farrell signed off to gouge massive profits out of Sydney Water."