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    Coat of ArmsMedia Release
    Premier and Minister for Trade
    The Honourable Peter Beattie

    NEW ERA FOR WATER IN SEQ: BEATTIE

    Premier and Minister for Trade
    The Honourable Peter Beattie

    Thursday, May 24, 2007

    NEW ERA FOR WATER IN SEQ: BEATTIE

    A streamlined 21st century water management system for South East Queensland water was unveiled by Premier Peter Beattie and Deputy Premier Anna Bligh in State Parliament this morning.

    The reform was recommended to Government by the Queensland Water Commission, which handed over its final report on urban water supply arrangements in South East Queensland (SEQ) to Government today.

    “The Government is committed to building the Water Grid to deliver a secure, future water supply for all South-East Queenslanders,” Mr Beattie said.

    “The current management system will not sustain this fairer approach to regional water supply.

    “SEQ currently has 22 bulk water assets, owned by 12 different bodies, and 17 water retailers – made up of 25 different water entities with different approaches to managing water.

    “There is a lack of clarity and proper accountability around ownership of water assets, and confusion about the responsibilities of State versus Local Government.

    “This model changes all of this.

    “Under the new streamlined structure, the State will assume control and operate the larger water assets that hold, manufacture (desalination and recycled) and distribute bulk water across the South East.

    “Councils will still have an important role to play at the retail and distribution end - jointly owning a single distribution entity that will be responsible for the domestic pipe network and pumping stations, and three retail companies.

    “For most councils, it will mean a significant strengthening of their balance sheet by removing their exposure to market and volume risk at the wholesale level, and it will reduce their debt burdens.

    “In some cases is will also provide additional funding for ongoing government capital expenditure requirements.

    “Councils, of course, will be fully and fairly compensated for giving up their bulk water assets when the proper value of those assets are determined, which is a process we will determine with Councils.

    “We will have to look at a number of issues including valuation methods, condition of the assets, current financials associated with the assets, and timelines for payments.

    “I want to be clear - it will be a fair process and councils will be fully and fairly compensated.

    It is impossible to say an exact amount until the due diligence process is complete, however, we expect compensations to be in the vicinity of $1 to $2 billion,” he said.

    The Deputy Premier told Parliament that a new statutory authority would be created as the SEQ Grid Manager.

    “The Grid Manager will be responsible for the equitable distribution of water from the State-owned assets to the council-owned companies,” said Ms Bligh.

    She also told Parliament that there are many benefits that come with managing water resources regionally.

    “An example is the ability to transfer water to where it is needed most in times of drought like we are experiencing now.

    “The Grid Manger will ensure that all regions have appropriate access to water and that proper maintenance is undertaken.

    The Treasurer said councils will be fairly compensated for water assets they have paid for from their rates base.

    “This compensation will directly benefit rate payers as it offset their council’s debt or forgone revenue.

    “In simple terms, those ratepayers in councils which have put significant investment into bulk water assets will get a direct benefit,” she said.

    Mr Beattie said that today’s reforms bring Queensland into line with other Australian mainland States, where delivery of water is responsibility of State Governments.

    “As always my Government is committed to principles of security of employment and workers’ entitlements – staff job security will be guaranteed in this process.

    “The Government will work closely with unions, councils and the new water businesses to ensure minimal disruption.”

    Councils have until November to put their views to the Queensland Water Commission on the structure of their proposed businesses.

    Some of the new businesses will be up and running by 1 October 2008, and the entire reform process will be in place by 1 July 2009.

    24 May 2007

    MEDIA 3224 4500