Troubled water company’s $150m bailout over botched billing system

An embattled water company had to be propped up with a multimillion-dollar injection of government cash after bungled billing left customers refusing to pay for incorrect, inflated or delayed charges.

Greater Western Water has also lost its chairman and is now under investigation by the Essential Services Commission as the fallout from its botched $100 million-plus upgrade of its billing system continues to grow.

Greater Western Water customer Lissie Fiddian is in dispute with the company over charges. Credit: Luis Enrique Ascui

Customers have been left fuming with complaints including failed direct debits, delays in property settlements, potential data breaches and huge queues for assistance about inaccurate bills.

The botched billing and payment system update has hit Greater Western Water’s bottom line, forcing it to borrow more money from Victoria’s treasury late last year.

While the government and the company refused to detail the size of the loan, a source within the business, not authorised to speak publicly, put it at between $150 million and $180 million.

On Thursday, it was announced that Greater Western Water chairman David Middleton would resign after 10 years of leadership.

Managing director Maree Lang confirmed in a note to staff that Middleton would finish on April 24.

“I’d like to thank David for his commitment to GWW, our customers, community and our people,” Lang wrote to staff.

Water law expert Dr Erin O’Donnell said the “number one goal” of a retail water authority was to keep water flowing and money coming in.

“It’s not so much that they’re too big to fail, but governments will bail them out,” she said. “But it will do that ideally in a way that is in response to an unexpected circumstance.

“So it shouldn’t be a regular thing that a retail water company is receiving or relying on borrowings from treasury.”

In Victoria, water retailers pay dividends to the government when they are in profit, and can borrow money to make ends meet or invest in infrastructure that cannot be funded by customer bills.

“Governments can make money from water corporations or lend them money when there’s a shortfall,” O’Donnell said.

The Essential Services Commission has also confirmed it is investigating Greater Western Water’s billing system, having previously forced the company to forfeit $18.6 million in customer payments because it took too long to inform customers of the company’s billing problems.

A spokeswoman for the regulator said it was “currently investigating allegations” that the company had contravened its obligations.

The Energy and Water Ombudsman has also received about 1200 complaints about the company.

Greater Western Water’s latest annual report – which does not show the full impact of the billing blunders – reveals it paid the government $31.3 million in dividends and capital repatriation of $35.88 million, while owing about $2.3 billion to Treasury Corporation of Victoria.

Water corporations have paid more than $650 million to the state to help repair government finances, The Age reported last year.

Formed in 2021 via a merger of Western Water and City West Water, Greater Western Water has more than 630,000 customers in inner and outer Melbourne and regional Victoria, in an area covering the Melbourne CBD, Footscray, Werribee, Sunbury, Melton, Bacchus Marsh and Macedon. People cannot choose their water company.

Greater Western Water is being investigated by Essential Services Commission and Victoria’s water and energy ombudsman.Credit: iStock

Lissie Fiddian is in a long-running dispute with Greater Western Water after being charged thousands of dollars for two disused water meters attached to her property.

Fiddian lives in an old military drill hall which has been divided into apartments.

“My property has three water meters attached to it. Only one water meter is operational, and the other two meters have not had a drop pass through them for 13 years. And there are no taps or pipes connected to them from my property,” she said.

Fiddian said Greater Western Water refused to disconnect the disused meters and suggested she change the title of her house. Fiddian is now taking the matter to the Victorian Civil and Administrative Tribunal to argue she shouldn’t be charged for a service she isn’t using.

Victorian Energy and Water Ombudsman Catherine Wolthuizen said her organisation had started five potential systemic issue investigations relating to problems identified at Greater Western Water.

The investigations relate to direct debit processes, bill due date representations, contact centre availability, applying concessions and billing apartment complexes.

“These investigations have now been formalised and requests for information sent to Greater Western Water,” Wolthuizen said.

Greater Western Water’s billing system upgrade is being undertaken by American giant Oracle and the platform vendor is DB Results.

Lang has promised the billing schedule will be “back to normal” by the middle of the year.

A government spokesperson said it looked forward to working with the new chairman to “make sure Greater Western Water meets the expectations of Victorians”.

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