Corporatisation

Case Study – Wide Bay Water

Australia
Hervey Bay Australia
Hervey Bay Australia
 Wide Bay Water Corporation
Some statistics
• Provides water and sewerage to Hervey Bay
• Population served 50,000
• Properties connected 20,000
• 120 employees
• Operating Revenues $AU30 million
• Capital Expenditure (2006) $AU45 million
• Assets owned $AU200 million
Wide Bay Water Corporation
at Work
Options for Water Businesses
 Australian Water Industry

• 300 water utilities – Senate Hearings

• Water infrastructure worth $90 billion
• 20 service 60% of population
• Next 70 utilities service 20% of population
• Over 200 utilities service less than 20%
 Queensland Water Industry
Political / Regulatory Environment

Local
Government
(Share
(Share holder)
holder)

100% Ownership
Rate payers State
Government
Consumers

Regulator
Wide Bay Water
Water
Corporation
 Queensland Water Industry

• 130 Council’s, Water Boards etc each

operating their own water supply schemes
• Most not on river catchment basis
• Fragmented Water Industry
• Problems of competing demands along
river catchments
 Corporatisation
Case Study – Wide Bay Water Corporation

National Competition Policy

3 levels of reform possible
~ Full Cost Pricing (FCP)
~ Commercialisation
~ Corporatisation

Which reform to choose?

 Corporatisation
Case Study – Wide Bay Water Corporation

• The highest form of NCP reform - LGOC

• Separate legal entity
• Wholly owned by a local government
• Independent board with commercial expertise
• Shares cannot be transferred
(no private ownership)
• Run as a business and make commercial
returns
 Corporatisation
Case Study – Wide Bay Water Corporation

Why corporatise?
To make a “water business”-
- transparency

- focus on increasing commercial value

of assets
- service/efficiency
 Corporatisation
Case Study – Wide Bay Water Corporation

COST
$

BENEFITS

FCP Commercialisation Corporatisation

 Corporatisation
Case Study – Wide Bay Water Corporation

How to Corporatise
Process-
• challenges
• opportunities
• timing
 Corporatisation
Case Study – Wide Bay Water Corporation

Challenges
• Political
• Structural
• Industrial
• Operational
 Corporatisation
Case Study – Wide Bay Water Corporation

Challenges - Political
• Manage the stakeholders
• Liaison with State government
• Educate the local elected councillors
• Inform the public
• Manage the media
• Establish a Steering Committee
• Prepare a Corporatisation Charter
 Corporatisation
Case Study – Wide Bay Water Corporation
Challenges – Structural
• What is the business?
• How will the service be delivered?
• Financial
• Systems
• Performance monitoring & reporting
• Accommodation
• Land – who gets what?
 Corporatisation
Case Study – Wide Bay Water Corporation

Challenges – Industrial
• Employees ready
• Unions ready
• Terms of employment
• Superannuation
• Workers insurance
• Workplace Health & Safety
 Corporatisation
Case Study – Wide Bay Water Corporation

Challenges – Operational
• Policies
• Licencing
• Banking
• Delegations
• Records
• Instruments
 Corporatisation
Case Study – Wide Bay Water Corporation

Opportunities
“get it right”
- Business focus
- Employees and employment conditions
- Financial structure
 Corporatisation
Case Study – Wide Bay Water Corporation

Timing - how long did it take?

• Structural – 12 months
• Political – 6 months to 2 years
• Legal – 6 months
• Industrial – 12 to 18 months
• Operational – 6 months
 Business Success
Case Study – Wide Bay Water Corporation
• Drivers – finances,customer satisfaction,
standards of service, investments,environmental
needs, business enhancements
• Strategies
• Performance measures
• Corporate health
• Customer satisfaction
• Vision and leadership
• Improvement by analysis
The Shape of a New Water Business
Case Study – Wide Bay Water Corporation

Post – Corporatisation Reflections

• Major issues worldwide
• Asset ownership
• Speed of decision making
• Efficiencies
• Service delivery
• New business development
For more information contact
Tim Waldron
Chief Executive Officer
+617 4197 4197
Joanne Collins
Executive Manager – Commercial
+617 4197 4120
David Wiskar
Executive Manager – Business Development
+617 4197 4143
29-31 Ellengowan Street, Hervey Bay, Queensland Australia
Phone +617 4197 4197
www.widebaywater.qld.gov.au