I write to respond to Sue Neales’ article that appeared in last Saturday’s edition of The Weekend Australian.
Goulburn-Murray Water having a $150 million debt against a $4.1 billion asset is hardly being “overloaded with debt”. We use debt financing to fund our infrastructure program, as it is a more equitable way to recoup the costs over the life of the asset.
With regard to our “finances being in tatters”, as a natural monopoly G-MW is regulated by the Essential Services Commission on behalf of the ACCC and operates within the financial sustainability measures set by the Victorian Department of Treasury and Finance.
Our connections project will bring substantial opportunity for agriculture and rural communities, with those connected and modernised showing increased productivity, through better levels of service in the delivery of water.
Over the last seven years, around 30 per cent of the water shares within Goulburn-Murray Irrigation District (GMID) have been sold. They were primarily bought by the Commonwealth Environmental Water Holder. This is equivalent to the volume of water within Sydney Harbour.
A 30 per cent reduction in the water delivered through 6000km of channels has resulted in substantially under-utilised assets within the district. In turn this places substantial pressures on charges to our 15,000 irrigation customers, given there are now less people to pay for the largely fixed costs.
If we don’t reshape our infrastructure footprint to match the volume of water now held, charges would go up by 40 per cent to 80 per cent, depending on individual customers.
There is nothing “secretive” about our plans, which are to resize, optimise and upgrade our infrastructure to match the volume of water remaining.
We are also downsizing our business to match the new irrigation infrastructure footprint.
However we do respect the privacy of individuals and their business within our processes.
Our processes to address this are fair and transparent and include an independent appeals panel mechanism.
This is the hard edge of the impacts of the water buyback program and the emergence of the environment as a significant water holder.