Water Journal : Water Journal July 2011
wateraustralia update 10 JULY 2011 water regular features In my article in the last issue of Water Journal, I described the opportunities open to the Australian water sector by engaging with the US market. This month, I want to go into a little more detail on just one of the 'G'Day USA' water series events that took place earlier this year, and why I and several other participants regard the market so enthusiastically. The mission commenced with the LA Water Forum held on 20 January. It was attended not only by Southern Californian water district officials, but also by their counterparts from states within the Colorado River Basin. Several speakers, both Australian and Californian, drew many parallels between the water issues faced by Australia and those faced by Southern California. There are, of course, significant differences in the structure of the water utilities sector in the US, and in the legislative framework and political environment. These make it difficult to transpose solutions implemented in Australia to southern California, and vice versa. Alliance Contracting An example on the Australian side is the use of alliance contracting to build major infrastructure, such as desalination plants. Alliance contracting is not well supported by the majority of US state governments and is even prohibited by some. This means governments must find or raise the infrastructure funds themselves -- and in the post-global financial crisis economy this is not straightforward. Other political and regulatory impacts of relevance are the barriers presented to desalination technology by environmental laws and the strong Californian environmentalist lobby generally. Can these be positively addressed? Experts on both sides of the Pacific believe that the environmental considerations are not as disparate as they may seem, and that the real issue relates to community engagement. In Australia, decision makers were guided by a genuine water shortage crisis but, in the process, we have built a great deal of capability in major project facilitation, community engagement and project structuring and management. This experience resides in a mixture of the government and private sector and this was the key message of the LA Forum. US audiences have shown great interest in our experiences. However, this is not to suggest that the dialogue is one-way. Orange County has done something that Australian consumers until this point have rejected -- it recycles wastewater directly into drinking water with the full knowledge and acceptance of the residents. Many here assert that parts of Australia will needto do the same at some point in the future, so what can we learn from Orange County to facilitate such projects? A National Approach It was by discussing and exchanging views on these common problems that the idea of a national water sector approach to the US market was first formed -- one which we are now pursuing vigorously. By involving several companies in LA and the wider mission, we could communicate the importance of the public- private sector relationship in Australia in delivering integrated water resource management success. As described last month, most of the participating companies returned home to pursue fresh US opportunities and I am confident of a healthy conversion rate. There are also significant innovations in the US for which Australian companies could provide profitable market access. Understanding each other intimately at the policy and regulatory level should have positive commercial spin-offs both ways. The LA Forum experience was echoed, perhaps even amplified, in other G'Day USA water series events, especially in Denver and Houston. In Denver, the emphasis was on the parallels between the Murray-Darling and Colorado River systems. In Houston, it was on the energy/water nexus, which is of growing significance in our own backyard. All the while, awareness is being created of the products, skills and experiences of the Australian water sector, which should help companies seeking to engage in the US either to pursue niche opportunities there, or collaborate with US companies in other markets. The usual market rules will most definitely apply: to succeed, companies must demonstrate to potential customers some relevant competitive advantage that delivers tangible benefits to customers, whether the advantage is technical or commercial in nature. waterAUSTRALIA will work with the Commonwealth and State Governments, the Australian Water Association and industry to develop this tremendous opportunity for our water sector. The Case for a Sophisticated Strategy Les Targ -- CEO, waterAUSTRALIA Australian innovative technology on show in LA.
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