Pity the poor customers of Victorian government-owned Greater Western Water, who haven’t received a bill for more than a year due to a botched IT system “upgrade” and are bracing for a massive hit when the tally finally arrives.
It’s not like the Victorian government is facing a budget crisis.
The debacle has now been running for about 15 months, after a $100m IT upgrade to the government-owned company’s billing system spectacularly failed to deliver.
Almost 85,000 of GWW’s 630,000 customers fell through the billing cracks in mid-2024 due to the stuff-up. The company says it has slowly been fixing the problem, but couldn’t tell Margin Call on Thursday how many were still affected.
Some might have celebrated the lack of a water bill, or not even have noticed its absence. That will surely be short-lived, as an invoice for the full amount – likely to be in the thousands for larger households – will inevitably arrive. And probably, as these things generally go, right around the time the annual council rates notice arrives.
Until then, instead of a quarterly water bill, affected customers have been getting a polite note in the mailbox once a month or so from GWW, letting them know their bill has “been delayed due to technical issues”, along with a pile of guff about extended payment times and the assistance available for households struggling with finances.
Why the regular letters, you may wonder?
Well, it’s a neat way to bypass the rules put in place by Victoria’s Essential Services Commission to protect consumers from exactly this sort of disaster. Under the rules, water companies can’t pursue underpayments – including where no bill has been issued – if they are more than four months old.
Unless, of course, they write a letter to let you know your bill has been delayed.
Failing to do so early in the piece cost GWW the right to collect about $18.6m in back-bills generated between February and April last year.
GWW was also unable to tell Margin Call how much the company believed it was owed from those customers still affected by the IT disaster. If all the 85,000 customers initially affected by the problem are still not getting bills, however, GWW has probably failed to collect more than $200m in revenue.
Suffice to say that the company reportedly tapped the Victorian Treasury for a $150m loan last year to get it through its time of troubles.
The latest Victorian budget also includes $203m line items for “information technology projects” at GWW. Though, again, the company couldn’t tell Margin Call how much of that relates to a fix for the botched billing system.
Still, there have been at least some repercussions, it would appear, with GWW chairman David Middleton parting ways with the state-owned corporation in March and managing director Maree Lang resigning earlier this month after she and the board reached a “shared understanding that this is the right time for a leadership transition”.
Delayed bills are hardly the worst of it, mind you. The stuff-up has generated thousands of complaints to Victoria’s Energy and Water Ombudsman, including instances of delayed settlements when buying houses, bills generated for defunct water meters, and even a couple of people who have complained that they received the bill for their entire set of strata units rather than just their own.
But those wanting answers should have no fear of a cover-up, for the government has commissioned an independent review of the disaster by the boffins from Nous Group (never far away when a government-linked contract is on offer).
Curiously enough, though, the review is into GWW’s operational response, the people and technical support thrown into the response, how well GWW communicated its problems to customers, how well it was prepared to handle customer needs, and the quality of support given to affected customers.
Little mention of a thorough investigation into what went wrong in the first place.
Still, when you’re rolling in cash like the Victorian Treasury, little things like that are hardly worth the time and trouble.
PointsBet title fight
Finally, after months of shadow-boxing, the fight for control for sports betting outlet PointsBet is on in earnest, after Matt Tripp’s Betr and Japan’s Mixi both lobbed their bidder’s statements on Thursday.
Mixi’s offer is simple enough. It is, as it has been for some time, worth $1.20 a share paid in cash.
Betr is (currently) offering 3.81 of its own stock in exchange for each PointsBet share. That’s about $1.22 a share if you accept Betr’s argument that you should value its scrip at the 32c it got when raising $160m from the market in May to back the takeover bid. If you prefer Wednesday’s closing price of 27c, it’s about $1.03 for each PointsBet share.
Even leaving aside the question of whether PointsBet shareholders would prefer cash or scrip, Betr’s trading price over the next few weeks will be a key factor in whether the company even gets to launch a bid on July 31.
When Tripp snapped up Betr’s 19.9 per cent stake in the rival sports betting company, he paid as much as $1.10 a share. Under the Corporations Act, that’s now the minimum Betr can offer for the rest of PointsBet shares.
Which means that Betr shares need to trade above an average 28.9c a share for at least a couple of days over the next two weeks to ensure Tripp’s bid even gets out of the starting gate.
Given Betr’s volume-weighted trading price averaged 29.4c over the last month, 30.7c over the last two months, and closed at 30c on Thursday, that’s not an impossible task.
Tripp arguably will need to sell the merits of the deal pretty well to match the $1.20 a share in cash on offer from Mixi, mind you.
At the risk of irreparably mixing Margin Call’s sporting metaphors, however, the best bet is still on a 10-round slugfest with Mixi declared the winner on points.
As of Thursday, neither can achieve the knockout 90 per cent shareholding that will allow a compulsory acquisition of remaining shareholders.
Betr already owns 19.6 per cent of PointsBet.
Mixi already has a lock on 9.15 per cent of the company’s shares and, with directors and management signalling the support of their 8 per cent holding for the cash bid, is almost a certainty to wrap up a blocking stake. And given Betr was the only notable shareholder to vote against Mixi at last month’s debacle of a scheme meeting, is a pretty good bet to own a 50 per cent holding and control in pretty short order.
Bizarrely, though, Betr is already flagging a sweetened offer despite only coming out of its corner on Thursday.
“Betr intends to assess opportunities to increase its offer and will continue to update the market as required,” the company said.
Given the months of posturing before now, you’d think they’d already have had enough time to come out a bit higher if that was the plan, surely?
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