Irrigators criticise SunWater's financial discipline

SunWater condemned by irrigators during QCA water price review


News
Irrigators are wary of proposed water price hikes.

Irrigators are wary of proposed water price hikes.

Aa

Irrigator groups aren't happy with SunWater's proposed prices.

Aa

Price hikes proposed by SunWater have been condemned by a chorus of irrigation groups and other peak bodies stretching across Queensland.

The Queensland Competition Authority is currently reviewing irrigation prices charged by state-owned utility SunWater.

A fresh batch of review submissions reveal a widespread dissatisfaction with SunWater's proposed pricing scheme.

The Burdekin River Irrigation Area group used its submission to "draw attention to the proposed high cost increases under SunWater's management" and to highlight issues with SunWater's approach to asset management.

"The cost increases and allocation of costs to the Burdekin scheme proposed by SunWater are not sustainable for irrigators," the submission read.

"SunWater's asset management system should be investigated to ensure it is fit for purpose," it added.

"The large increases in capital expenditure proposed under this system are not well justified and may not be prudent or efficient."

Theodore Water urged the Queensland Competition Authority to scrutinise SunWater's financial planning, which has been criticised for blowouts in non-routine expenditure.

"Theodore Water strongly encourages QCA to determine the level of confidence that can be attributed to Sunwater's future planning and take this into account in recommending final pricing going forward."

Canegrowers Mackay used its submission to highlight difficulties faced by irrigators in the Eton and Pioneer schemes.

"What is of grave concern to us is that we have never been questioned by QCA as to the impact of increasing water prices to the triple bottom line of the communities in our region," its submission read.

"There are enormous environmental impacts not often communicated. This has been sorely overlooked during the previous price paths."

The Queensland Farmers' Federation has raised concerns about SunWater's "consistently unreliable" spending plans and the estimates used to calculate its cost-reflective prices.

The QFF submission pointed to a "112pc blowout" in non-routine expenditure across irrigation schemes for the period 2013 to 2018.

Cotton Australia backed many of these worries in its own submission, stressing the need for SunWater to adopt more stringent financial discipline.

"QFF have identified a 112% blow-out in non-routine expenditure over the 2013-18 period," Cotton Australia wrote.

"This is alarming in both its immediate impact, but it is also likely that forecasts for the new price path period have probably been inflated, and even those inflated figures are likely to blow-out further unless SunWater exercises much greater discipline."

QFF has forecast the price increases faced by irrigation schemes if they are to meet SunWater's cost-reflective estimates.

The Callide scheme faces the biggest jump, with a $74 per megalitre difference between the current price path and SunWater's cost-reflective price in 2020/21, according to the QFF modelling.

Eton ($68/ML), Lower Mary ($44/ML), Barker-Barambah ($44/ML), Bundaberg ($34/ML) and Three Moon Creek ($33/ML) are the other schemes facing significant differences between current prices and proposed cost-reflective prices.

Price increases are capped at $2.38/ML per year plus inflation, meaning a scheme such as Callide could see more than 20 years of steady annual price increases until it meets SunWater's cost-reflective pricing.

A spokesman for SunWater has said the QCA would examine its spending estimates as part of the review.

"The QCA's price review is ongoing and therefore the Queensland government has not made any decision in relation to future prices for irrigation," the spokesman said.

"However, central to the review, the QCA will examine SunWater's expenditure to ensure that only prudent and efficient costs are able to be recovered from customers."

Aa

From the front page

Sponsored by