Water Journal : Water Journal June 2014
2From the President WATER JUNE 2014 ARE ASX-LISTED WATER UTILITIES THE WAY OF THE FUTURE? Graham Dooley -- AWA President The theme of the Ozwater'14 Water Leaders Forum and several of the streams and keynote speakers was the role that investment capital from non-Government sources can have in our industry in the future. The Federal Government has now incentivised the State and Local Government owners of water utilities with a 15% bonus if they sell utilities to new owners outside the Government sector. The states are de nitely in sale mode, at least as far as ports, electricity and other asset classes are concerned. Will they also look at selling water utilities? As far as I can see, several are evaluating options. Having worked for nearly 20 years in a Government-owned water utility and over 20 years in the private sector water industry, I am convinced that the fundamental job of delivering good quality, well-priced water services is not much different between public sector-owned and investor-owned water utilities. Qantas, the Commonwealth Bank, multiple state banks, several small airlines, multiple electricity generators and networks, and several ports are all now owned by investors, having been previously owned by Governments. Water utilities with older infrastructure are particularly capital-hungry businesses that can be owned and operated by any responsible and well-regulated investor. The UK has demonstrated this in spades for 25 years now. Interestingly, the shareholders of the UK water utilities are overwhelmingly super funds, customers and staff. They all appreciate the steady dividend ow. Australian super funds also like this kind of return and there is an enormous appetite to invest in water utilities among the Australian funds that I talk to. Australian funds are substantial investors in both Thames Water and Anglian Water. The issue for AWA, as Australia's peak body embracing members from all parts of the water cycle -- including investment managers, is how we get the best results of such a transition for urban customers, famers, taxpayers, employees and suppliers of goods and services to the industry. There is almost inevitably going to be vast politicking, but AWA is in a unique position to be able to provide industry-wide, objective and factual advice to our elected leaders and the public. We have good regulators in nearly all states that will ensure that customers pay a fair price, standards are met and infrastructure is properly managed. IPART and its counterparts have given good regulatory oversight to our water utilities for two decades now. Being owned by investors imposes some different dynamics on Boards and CEOs, but the clarity of what is good value for money, and the focus on standards and ef ciency, is a pleasure for executives to be part of, I have found. I welcome this issue being raised and believe that AWA can be a voice of objectivity and advocacy of high-quality outcomes for customers, the community and the environment. I look forward to your support of this nationwide discussion and debate.
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