QLD:Councils won't do better: Allconnex

AAP General News (Australia)
08-09-2011
QLD:Councils won't do better: Allconnex

By Petrina Berry

BRISBANE, Aug 9 AAP - Spurned water retailer Allconnex says southeast Queensland councils
won't be able to provide cheaper water.

Redland City Council became the second local government to pull out of Allconnex on
Monday, following a backlash over rising water prices.

The Gold Coast City Council dumped the retailer last month and a third council, Logan,
is re-examining its decision to stay with Allconnex.

Allconnex said it was disappointed by the outcome, but it believed councils wouldn't
be able to deliver cheaper water services.

"Individual councils have no way of being able to provide water and wastewater services
at a cheaper price than Allconnex Water," Allconnex said in a statement on Tuesday.

"Ratepayers across the three councils will not be able to benefit from the economies
of scale that Allconnex would deliver."

The Redland council expects a bill of $3.25 million this financial year for quitting
Allconnex and re-establishing Redland Water, its former water business.

Allconnex says the Redland council was forced into Monday's decision because of the
Gold Coast council's vote to take two-thirds of the water business back to the Gold Coast.

Redland mayor Melva Hobson said her smaller council would pursue the Gold Coast council
for costs, on state government advice.

Mr Clarke on Tuesday maintained the costs associated with dumping Allconnex would be minimal.

"To me the costs are nowhere near what everyone's claiming," he told AAP.

"I still believe the best way is to just change the name of Allconnex and take over
the company structure because of all the contracts they've got under their name.

"So far the costings have been done on the basis of breaking those contracts and paying
them out, then renewing them, which means you're virtually giving a bonus to whoever the
contractor was.

"That doesn't even make sense to me, but we'll be getting in some management consultants
to supervise the move forward and save us lots of money."

An independent arbitrator will be appointed jointly by Redland, Gold Coast and Logan
councils to determine the costs to be borne by Gold Coast City Council.

Premier Anna Bligh said her government would work with all three councils to make sure
the transition away from Allconnex was done smoothly and in the best interests of ratepayers.

But the state government had no intention of handing over responsibility for bulk water
charges - the component that most people blame for rising water bills - to the councils.

"It's not that long ago that in the southeast of our state we were in a desperate situation
and very high risk of running out of water," she told reporters.

"Leaving bulk water supply to numerous councils across a growing region like southeast
Queensland left us in a position where we nearly ran out of water.

"We're not going to be in that position ever again.

"We will now plan for the region ... and that planning and that bulk water supply will
remain with the state government."

AAP peb/jl

KEYWORD: WATER QLD WRAP

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