Barwon Water risks conflicts of interest and losing focus on its “core business” after getting into property development, a community watchdog has warned.
Geelong Ratepayers Andrew Senia said City Hall’s recent multi-million-dollar settlement with Lara’s L Bisinella Developments demonstrated why public authorities should stay out of the private sector.
City Hall’s payout followed Bisinella legal action citing delayed permits and excessive drainage charges as the company tried bringing commercial allotments to market in competition with council’s own blocks in the same area.
“We have a similar situation with Barwon Water, which is involved in land developments at the cost of Geelong residents who pay rates for water. There are at least two major developments being undertaken in a market that has gone quiet,” said Mr Senia, a lawyer.
“According to reports in the Indy, Barwon Water sees land development as a ‘new entrepreneurial’ approach. It will not sell land to a developer, claiming (it’s) maximising the value of (its) land and passing it on to customers.
“However, just how the payer of water rates will benefit has not been fully explained and Barwon Water has declined to comment on any further plans for residential development but did say it was ‘exploring options’.”
Ratepayers Geelong agreed with state shadow minister Steph Ryan telling Barwon Water to “focus on its core job”, Mr Senia said.
“Property development should be left to property developments, as the recent City of Geelong case demonstrates. If Barwon Water has surplus … it should sell that land to experienced and proven developers at the best possible price.
“Barwon Water was not set up to be entrepreneurs. It has a duty to its stakeholders to act prudently and avoid conflicts.
“This ‘new entrepreneurial’ approach should be condemned and Barwon Water should adhere to its charter, core purpose, priorities, and provide value to its consumers. That way conflicts of interest would be avoided and development left to the professionals.”
Barwon Water has told the Indy that revenue from the authority’s Salt and Cumulus developments, at Torquay and Highton respectively, would help keep prices down for ratepayers.
The selling agent for Salt, which Barwon Water has valued at $50 million, said five of 81 allotments sold for $330,000 to $550,000 during the estate’s opening weekend at the start of February.
Barwon Water has declined an Indy request to put a value on Cumulus.
Victoria’s chief lobby group for developers has welcomed Barwon Water’s entry into the market.
The two estates would help meet local demand for residential land, the state branch of the Urban Development Institute of Australia told the Indy last week.