Business SA is calling for additional reductions to the cost of water and imploring SA Water to decrease its revenue request, along with further justification for new projects, as part of its 2020-24 Regulatory Business Proposal. 

As ESCOSA prepares to release submissions to the proposal, Business SA is releasing its submission, which includes an independent review conducted by specialist consultancy firm Isle Utilities. 

Business SA Executive Director Industry and Government Engagement, Anthony Penney, said the report raised concerns about the cost of providing potable water to remote communities, the justifications for a major metropolitan water quality improvement project and SA Water’s IT upgrades, but welcomed a renewed focus on water main bursts. 

“Business SA is sceptical of the justification for a major capital project to provide non-drinking water quality improvements to 650 remote customers, costing $43 million over 2020-24 for just over half the customers impacted, equating to $126,470 per customer,” Mr Penney said. 

“While there may be merit in reducing prices to customers who are not receiving potable quality water, expenditure of this quantum may not be the most efficient way to achieve the desired result and Isle Utilities has raised concerns around significant uncertainty regarding customer’s willingness to subsidise this project.” 

Mr Penney said Business SA recognised the cost of potable water remained largely contained since 2013, which was positive for business owners and operators. However, the standard potable water price at $3.41 per kilolitre remained roughly triple the rate of just over a decade ago, when it was $1.16 in 2007/08, before the Regulated Asset Base calculation methodology changed and the Adelaide Desalination Plant was built. 

Business SA raised concerns about SA Water’s quality improvement project. 

“We don’t believe there are adequate grounds to substantiate SA Water’s proposed $124m metropolitan water quality improvement project, particularly in the absence of a specific demand from health authorities,” Mr Penney said. “We’re also concerned about the justification for high amounts of spending on IT upgrades.” 

“Business SA supports a focus on infrastructure improvements to manage the number of pipeline breakages, and in particular SA Water’s outage time for burst water mains.” 

Mr Penney also called on the State Government to implement the findings of the recent Independent State Water Price Inquiry, which would conservatively reduce SA Water bills by another 5-6 per cent per annum over 2020-24.
 
To read Business SA’s submission, click here.      

For further information or to arrange an interview please contact Verity Edwards on 0412 678 942.  

15 January 2020