Why did the government ‘invest’ in a broke water company

IT’S one of the great wonders of the world, why sensible humans pay $4 a bottle for something they can get out of the tap for free, writes Matt Cunningham. But he says another big question is why the cash-strapped NT Government “invested” $10 million of taxpayers’ money into a water company it knew was going broke.

Former chief executive officer and managing director of NT Beverages Hugh Jones in happier times.

ITS’S one of the great wonders of the 21st century. How did otherwise sensible humans all over the western world manage to convince themselves of the need to pay $4 a bottle for something they can get out of the tap for free?

Somehow this happened, and people can now be seen wandering the streets carrying bottles of Mt Franklin, as much as a fashion accessory as a means of hydration.

As I write this, two water bottles sit on my desk, a “Super Pump Spring Water – official water of the AFL”, and a fancy glass bottle of “antipodes”, which the label tells me has been sourced “from the deepest aquifer in New Zealand”. If Jesus was alive today he’d be turning the wine back into water.

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But if our ability to fall for the great water-bottling sham is a modern wonder, then the demise of Darwin water-bottling company NT Beverages is truly a disgrace.

How you can go broke bottling something that costs next-to nothing and selling it for $4 a pop in one of the hottest places on the planet is just the beginning of this sorry tale.

The fact – revealed in Friday’s NT News – that the company was importing “contaminated” Indonesian water and selling if off as pure, home-grown H20 is another damning chapter in this story.

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But the real scandal is how the cash-strapped NT Government managed to “invest” more than $10 million of taxpayers’ money into this company, long after it knew it was going broke.

Here’s a brief timeline.

In June 2017, three years after starting up, NT Beverages had reported a $6.5 million loss and a $13.9 million deficiency in working capital.

Yet despite clear signs the books were cooked, a few months later the Northern Territory Infrastructure Development Fund decided to invest almost $10 million in the company.

This decision appears to have taken place at an NTIDF Board of Directors meeting that took place on February 19, 2018.

Matt Cunningham has developed the reputation as the ‘thinking woman’s crumpet’. Picture: Justin Kennedy

But, despite this being a key milestone for the infrastructure fund, no public statements were made and no media release was issued.

According to a Creditors’ Report from administrators Ferrier Hodgson it was stated on February 26, 2018, that NT Beverages’ “ability to continue as a going concern was contingent upon obtaining the aforementioned NTIDF funding package”.

Than $10 million was gone in just a few short months, and in August 2018 the NTIDF handed over another $401,000 to NT Beverages, with a final $98,700 given in September last year, just before the NTIDF was wound up.

There’s a lot to unpack here. Why was $10 million of taxpayers’ money invested in a company that was clearly failing?

What risks was the NTIDF, and by extension the NT Government, aware of when that investment was made?

Why was an infrastructure fund that was set up to invest in major “infrastructure” (the fund’s own managers had identified road, aquaculture, defence and solar energy as possible projects) pumping money into a water bottling company?

Were there any strings attached when that money was handed over, or was NT Beverages free to spend it as it saw fit?

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Opposition Leader Gary Higgins has asked many of these questions in the NT Parliament.

The answers should be revealing.

But a better question is why the NT Government has refused to launch an independent investigation into this debacle.

“Who gets given $10.5 million of taxpayer money with no strings attached and no explanations required?” independent MLA Robyn Lambley asked in Parliament last month. “No responsibility, no explanation.

“I don’t know about anyone else, but to me, that sounds like collusion, perhaps corruption.”

Ms Lambley said the Government had no appetite to look into the matter.

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But perhaps someone else will. ICAC Commissioner Ken Fleming said the capacity of his three investigators would be taken up very quickly once their investigations began this year.

The NT Beverages scandal alone should be enough to keep them busy.