IMPLEMENTATION OF WATER INDUSTRY REFORMS BY QUEENSLAND LOCAL COUNCILS

Queensland local governments have traditionally been responsible for provision of water supply and sewerage services on tightly controlled budgets. These services represent significant business activities of these Councils and account for some 25% to 30% of total revenue. The implementation of National Competition Policy and Water Industry Reforms have changed the way water related services are provided. In many cases, proactive local governments have used the reform agenda as an opportunity for transforming their water service operations into successful businesses.The objective of this paper is to provide an outline of the approach being taken by Queensland Councils in the implementation of water industry reforms with particular emphasis on the development of commercialized business activities.A key to success has been the redefinition of business activity relationships in commercial terms. Rigorous procedures have been developed to help Local Governments through the process of commercialization including procedures to:overcome the difficulties of multiple accountabilities to customers and shareholders;address the requirements or otherwise for corporate consistency;raise awareness of commercial drivers in the operation of a water service business;establish “commercial” purchasing arrangements, especially for services provided from typical corporate service areas of local government; andposition the business and its services for “contestability”.The outcomes have resulted in some Queensland local governments becoming owners of very viable business undertakings which generate significant dividends and tax equivalent returns.