Is the Coffs/Clarence water supply up for sale?

Councillors concerned by glacial pace of discussions as Essential Energy calls in the lawyers.

The Nymboida Power station has been inactive since 2013 and could hold the key to the regions water supply.

DURING a process which seems as confusing as it is drawn out, the fate of the region's water supply is very much up in the air.

On Tuesday, Clarence Valley councillors discussed the progress of their efforts to one day take control of the region's water supply from Essential Energy, who hold water rights and infrastructure on the Nymboida River.

Since floods prevented the Nymboida Hydro-Electric Power Station from functioning in 2013, council has been in talks with Essential Energy about how it might divest the assets and signed a Heads of Agreement in 2015.

It was hoped that by completing the HoA the rights and responsibilities would be determined, paving the way for the assets, including the water rights, to be sold.

And while those talks accelerated after Coffs Harbour City Council contracted Clearwater Australia to progress the deal, the minutes from Clearwater's September meeting with Essential Energy have some councillors puzzled.

READ MORE: Glimpse of future for ownership of Valley's water supply

The minutes indicate the power company could be looking at selling the assets to someone else and have entered into a confidentiality agreement with a private party "with interests in power generation".

The minutes also show the power company have sought legal advice on an agreement signed in 2008 which ensured council had the first right of refusal.

And they appear to explain their position by suggesting they "do not want any more delays or promises".

A bridge spans the Nymboida river, key to the Coffs Harbour and Clarence Valley water supplies.

This perplexed councillors who were under the impression that over all these years it had been Essential Energy who were unwilling to progress the HoA and Cr Debrah Novak asked the general manager whether they had made any promises.

READ MORE: Essential Energy target of tirade from Cr Williamson

"I am not aware of any significant promises we have made, it was more a lack of engagemnet from Essential Energy to be honest," CVC general manager Ashley Lindsay said.

"From our perspective it was from their end that there was a lack of attention to the issues."

Cr Arthur Lysaught continued down the same path, describing numerous council meetings in which the past director of works and civil, Troy Anderson, said council were "against a brick wall and not getting any responses" from Essential Energy.

"And yet in the documentation we recieved they seemed to be having a crack at council for not meeting obligations - from my memory the shoe really is on the other foot."

READ MORE: Nymboida Hydro Electric Power Station 'a can of worms'

Mr Lindsay added that the relationship between the parties had broken down as a result of managerial changes at Essential Energy and while he believed they had a valid agreement for first right of refusal, "until it is tested in court we are not going to know".

"Through Clearwater's discussion we are now pushing for Essential Energy to stick to the HoA so that council does have final right of refusal to take on the water supply," he said. "We certainly want the water licence."

Essential Energy refused to answer specific questions regarding the meeting, including whether they were trying to prevent council from being given first right of refusal and what had been meant by "delays and promises".

They also declined to explain why it had taken so long to come to an agreement with Clarence Valley Council, however they provided the following response via a spokesperson.

"Essential Energy has been working since 2015 to progress a Heads of Agreement (HoA) with Clarence Valley Council, with correspondence between Essential Energy and Council maintained throughout this time to advance the process," the spokesperson said.

"Essential Energy's preference was for this matter to be resolved to the satisfaction of all stakeholders by now and it is Essential Energy's desire to resolve this matter as soon as practicable.

"Essential Energy has an obligation to ensure a fair and equitable opportunity for interested parties to provide an Expression of Interest in attaining the Nymboida Power Station and associated assets. Essential Energy is currently investigating its options to run an open market process to dispose of the assets."

Both Clarence Valley Council and Coffs Harbour City Council have both been contacted for comment.