Takeover bid for TasWater heats up

The Tasmanian Government has passed a bill in the House of Assembly enabling its controversial planned takeover of TasWater, while a Legislative Council Select Committee on the ownership of TasWater has held public hearings in Launceston and Hobart.

TasWater is currently owned by Tasmania's 29 local government councils, and the takeover would see it transferred to state government ownership to operate as a Government Business Enterprise. Under the arrangement, local governments would receive their expected returns from TasWater guaranteed until 2024-2025, and thereafter would get half of all future returns.

The Hodgman government maintains the takeover is necessary because TasWater has taken an overly conservative approach to financial management and failed to invest sufficiently in upgrading infrastructure in order to maintain income stream to the councils.

The Local Government Association of Tasmania has taken a strong stance against the takeover, maintaining that its members “confirm there is no water and sewerage crisis” in Tasmania.

However, in its presentation at the Launceston public hearing, the Tasmanian Environment Protection Authority told the committee that TasWater is underperforming in its management of the 79 water and sewerage plants it controls.

EPA director Wes Ford said TasWater had been issued with two infringement notices, but due to financial constraints it took too long for the issues to be addressed.

The Australian Water Association has expressed strong support for the current management, recommending that “TasWater's existing structure and strategic plan (including the 10-year Capital Works Program) be fully maintained and supported by the Tasmanian Government.

“The progress being made is significant and for the first time in decades the Australian water industry feels confident that Tasmania has a plan and an industry structure with the capability to radically lift the performance of the state's water and sewerage services.”

The AWA warned that the proposed takeover carried “serious risks to the progress already made and could damage the ability of the State to address the long-term issues being managed by TasWater”.

The proposed takeover has sparked public exchanges between the Treasurer and Minister for Local Government, Peter Gutwein and TasWater chairman, Miles Hampton.

In May, Mr Gutwein made a speech in parliament, accusing Mr Miles of being duplicious and self-interested in his opposition to the takeover.

Mr Miles has responded in a letter read out in Parliament saying his reputation had been seriously affected by Mr Gutwein's comments, and that it was disappointing that the debate over the merits of the government's plan had become a “personal attack on my character, motivation and responsibilities as a company director under law”.

More information about the Select Committee inquiry is available here.

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