Water Journal : Water Journal December 2013
DECEMBER 2013 WATER 3 From the CEO CALL FOR A NATIONAL FRAMEWORK OF ECONOMIC REGULATION Jonathan McKeown -- AWA Chief Executive During November AWA and Deloitte released the State of the Water Sector Report for 2013. The survey revealed a broad consensus that the key objectives of providing water security and effective management of sewage are being met. Maintaining and augmenting infrastructure and operational ef ciency, and responding to concerns about rising prices and water security are the main issues. The survey revealed that the industry's concerns about a skills shortage have reduced signi cantly. This may re ect a reduction in large projects; however the industry needs to continue to attract new talent to meet future opportunities. These ndings should also not dilute the need for improved training for operators across the industry -- an initiative that AWA supports through the promotion of the National Certi cation Framework. Obtaining consistent water quality across all geographical locations should remain a strong industry priority. An interesting aspect of the survey was its ndings on economic regulation. There is still a clear divide between those who see economic regulation of the water industry as being effective (47%) and those who see it as not effective (37%). How economic regulation of the water industry is governed is fundamental to the industry's growth and success. The degree of regulation varies across the different states and territories. The various models in practice today provide for an independent regulator to set the price for water and, indeed, to set how and for what purpose the utilities can allocate nancial resources. In other jurisdictions these matters are determined by the utilities themselves, or their shareholders -- the State Governments. Further successful expansion of outsourcing operations to the private sector will be determined by the way economic regulation is governed within the respective jurisdictions. This whole process of outsourcing needs to be driven by one overriding objective -- better outcomes for the customers and the creation and maintenance of more 'livable cities'. The partnering of the private sector with publicly held assets and utilities is a formula that has clearly worked in several locations. To encourage the private sector to take on more responsibilities we need consistency and clarity across all jurisdictions, which could be achieved under a national framework of economic regulation. This framework needs to address the investment environment needed to attract and maintain capital, the methods to equitably transfer risk from public to private partners, and guidelines for transparent pricing mechanisms with exibility to maintain operations capable of meeting customer requirements. For the water sector to continue to meet customer demands and expectations the industry needs to work collaboratively to create the most appropriate partnerships between utilities and the private sector to deliver the product and services they require. This includes delivery of a consistent water quality across Australia, attracting the skills and people the industry needs to prosper, and advocating for a national framework to guide the economic regulation of the industry by the States and the Territories. These are all issues AWA will pursue in 2014. On behalf of all staff at AWA I wish you a Happy Christmas -- and may 2014 be a year of con dence and success for the Australian water industry.
Water Journal November 2013
Water Journal February 2014