Water board in new cuts order

CHAIRMAN: Michael King.

By JOHN VAN KLAVEREN

STATE Government has asked Barwon Water to become more efficient despite already cutting costs by up to 11 per cent after an efficiency review.
Water Minister Peter Walsh said the Government was launching a “major reform to lower household water bills”.
The Government’s Fairer Water Bills campaign would deliver “efficiencies and system-wide cost reductions”, he said.
The campaign would require water corporations to review financial and asset management, procurement practices and shared services to find savings for customers.
“A typical Melbourne household using 165 kilolitres of water per year has seen bills go from around $500 to around $1200 per year because of decisions like the north-south pipeline and the Wonthaggi desalination plant,” Mr Walsh said.
“I believe there is scope for significant productivity and efficiency gains in the urban water sector that will translate to future savings on household water bills.”
Mr Walsh said the Government had asked regional and metropolitan urban water corporations to identify and provide advice on efficiency gains.
The feedback would be subjected to an independent review for the Government to establish efficiency goals for each corporation.
Mr Walsh said a review would reduce regulatory burden and red tape for water corporations.
Barwon Water’s new efficiency targets will take effect from 1 July.
Chairman Michael King said Barwon Water initiated the earlier efficiency and productivity review in December 2011.
“The purpose was to identify corporate and operational savings that would keep down future prices for residential and business customers.
“The review has led to annual savings of between 10 and 11 per cent.
“These savings have allowed Barwon Water’s Board to deliver price cuts of 1.6 per cent, excluding CPI, every year for five years, from 2013 to 2018.
“The savings have been achieved by reducing operational costs, implementing process improvements and changes to service delivery, with no impact on customer service levels.
“In addition, there have been several management restructures and a number of employees have taken up the offer of voluntary redundancy.
“While there have already been significant gains in efficiency and productivity, Barwon Water’s board will continue to investigate cost savings that put downward pressure on household water bills.”

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