Home' Future Building: The Australian Infrastructure Review : July 2011 Contents futurebuilding 83
Volume 2 Number 1
The challenges facing regional water equality
Many of New South Wales’ rural and regional
residents are also at heightened risk of drinking water
contamination. In 2008–09, 12 local water utilities
failed to meet minimum microbiological water quality
standards. Between them, these utilities serviced over
25,000 connected properties.
Put simply, higher prices coupled with a heightened
contamination risk mean that large numbers of rural
and regional consumers are paying more than their
city counterparts, but cannot expect the same quality
standards. This could not be any better illustrated than
by the fact that half of the 12 utilities that failed to meet
minimum quality standards in 2008–09 had above
average water prices, including three whose prices
were close to 20 per cent above the average price
across the state.
These facts are certainly concerning, but they are
by no means surprising – having been extensively
documented in recent years.
An AECOM report, prepared for Infrastructure
Australia (IA) earlier this year, found that some
regional communities – particularly in New South
Wales and Queensland – are ‘exposed to a greater
risk of illness from pathogens, algal toxins and other
physical and chemical contaminants,’ with ‘sections
of the community with weakened immune systems
particularly at risk’ (AECOM, 2011). Similar concerns
have also been raised in recent months by the National
Water Commission and the Productivity Commission.
Yet despite this strength of evidence on the
challenges facing the state’s regional water sector, a
clear pathway for effective and lasting reform has
successfully evaded government, at both the state
and local levels.
A new report by Infrastructure Partnerships
Australia (IPA) and Castalia Strategic Advisors seeks
to buck this culture of inaction and to restore price
and standard equality for regional water consumers.
The report, Regional water equality in New South
Wales, brings a fresh perspective to the key challenges
facing the sector, as well as their underlying causes.
The report finds that weak governance frameworks
and a lack of functional separation, corporate
accountability and commercial incentive are all key
contributors to the sector’s underperformance.
By outlining an alternative and practical pathway
for lasting and effective reform of the state’s regional
water sector, the report also builds on the existing
range of reform options.
Reform advocates, to date, have focused almost
exclusively on the forced amalgamation of local
councils into county councils, regional water
corporations or voluntary alliances. Undeniably,
such amalgamations will ensure much-needed scale
as well as other flow-on economic benefits.
Amalgamations also go to the very heart of
the problem; that there are considerably more
utilities operating in regional New South Wales
with the vast majority of these run by general
purpose local councils – compared with other
states (see Figure 1).
Regional water supplies
run a higher risk than urban
supplies of containing
contaminants like green
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