ESCOSA executive confirms that SA Water assets are overvalued

A SENIOR Essential Services Commission of SA executive has told a parliamentary committee that he oversaw a report that found SA Water’s assets were overvalued by $2 billion.

• SA Water overvalued by $2b, inquiry hears

A SENIOR Essential Services Commission of SA executive has told a parliamentary committee that he oversaw a report that found SA Water’s assets were overvalued by $2 billion.

Nathan Petrus’ evidence at today’s Budget and Finance Committee is consistent with previous claims made by former ESCOSA chief executive Paul Kerin.

Responding to questions from Committee chair Rob Lucas, Mr Petrus said that the pricing and analysis team, which he headed, drafted the report.

The Committee heard that the overvaluing of assets ultimately results in consumers being charged an additional $150 million a year.

Mr Petrus said local consumers were the third highest charged in Australia during 2013/14, second in 2012/13, and highest in 2011/12.

ESCOSA chair Dr Pat Walsh told the Committee that he could recall the report, but not exact figures contained within it. SA Water’s most recent report values its assets at around $13 billion.

“I’m not sure if the $2 billion figure was mentioned or not, but certainly that was the thrust of the report,” he said.

Dr Walsh said the report, which was ultimately signed off on in June 2014, was drafted in a “turbulent” environment, citing last year’s state election and the subsequent resignation of Dr Kerin.

“The (then) Treasurer (Jay Weatherill) wouldn’t have liked being told by staff of ESCOSA just before the election that his regulated asset base was overvalued by $2 billion and water consumers were being slugged,” Mr Lucas said.

A government spokesperson said arrangements for pricing water in South Australia continue to meet all appropriate regulatory requirements.

“ESCOSA now determines the maximum amount of revenue that SA Water can collect,” the spokesperson said.

Previously, The Advertiser exclusively revealed that Dr Kerin quit his post nine days after last year’s election in a scathing letter of resignation.

He wrote that he was “simply not prepared to waste the next four years of my life” and that “the government and its senior bureaucrats have clearly demonstrated that they have no interest in genuine reform”.

Mr Lucas said the Weatherill Government has portrayed Dr Kerin as a disgruntled former employee, but that it is now clear consumers are being “ripped off”.

“It would have been very inconvenient for the Weatherill Government during an election campaign to have this information become public,” he added.

Business SA’s policy director Rick Cairney said there need to be an immediate independent inquiry into SA Water’s asset base.

“Greater transparency is needed, which is consistent with what Dr Kerin and (former ESCOSA commissioner) Dick Blandy have said,” he said.

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