Tuesday, April 8, 2008

Wide Bay Water's PR machine continues apace

I wonder why Wide Bay Water (WBW) employs a Media, Communications Officer? Surely it is an unnecessary expense when the Chronicle's editor and former Corporation board member does such a fine PR job on its behalf. 
A copy of the paper's story dated April 8 was on its website and featured the usual weekly, piece on the virtues of WBW. Under the catchy heading "Little place, big waves" we had the head of a US water efficiency body "startled to find Hervey Bay had a population of only about 50,000.

Why was the executive director of the federal Chicago-based Alliance for Water Efficiency, Mary Ann Dickinson so startled? Because of WBW's big international reputation. 

Apparently "Ms Dickinson said she would like to see the Wide Bay Water governance model for water utilities replicated in the US. She was, according to the report "shocked" by how small the city was because of the "impact WBW is having on the world stage and in leading worldwide innovation." 

Then came the cruncher. "On the other hand, by being small and set up as a corporation, you have flexibility here that you might not get in a bigger organisation that is part of a council water department. Water utilities can be so conservative."

All this praise and recognition will count for nothing if the people of Hervey Bay face the huge hike in the cost of their water and sewerage, predicted by the AEC Group's Financial Review of Wide Bay Water Corporation, commissioned by the former Hervey Bay City Council.  The report under the heading Return on Council Investment in WBWC states: "The actual achieved return on investment (or the achieved return on capital - weighted average cost of capital) by WBWC has been below the expectations outlined in the corporatisation charter. WBWC has achieved actual average annual rate of return of 3.8%, compared to the average benchmark of 6.8% between 2001/2 and 2005/06. 

"The projected real pre-tax return on capital to be achieved by WBWC averages 2.4% for the life of the financial plan, compared to the benchmark rate of 6.6% determined by QTC for WBWC.

"The inability to achieve the return on capital target effectively means that WBWC is not meeting its legislative requirement to set prices in accordance with full cost. WBWC should be fully recovering three components namely a return on capital invested, a return of capital (depreciation) and efficient operating costs.

To achieve the targeted level of return of 6.6%, the report stated: "Indicative price increases, above inflation, would be required for Water and Sewerage: 2007/08, Water 74%, Sewerage 12%."

It remains to be seen what the new Fraser Coast Regional Council will do with water and sewerage. Hopefully it won't be swayed by the regular PR puff pieces in the Chronicle

There are probably two options to consider, the first, to bring WBW back in-house or the second that WBW remain a corporation and take over Maryborough and Tiaro's water supply. The new council should take a long hard look at the operating efficiency of WBW and compare that to the in-house operating efficiency of Maryborough and Tiaro's water management.

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