22/03/2012 - 15:30

Labor stirs privatisation pot

22/03/2012 - 15:30


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Labor has accused the state government of secretly privatising Water Corporation services, after raising questions about a contracting deal that was announced by Transfield Services three months ago.

Shadow water minister Fran Logan claimed today the government “deliberately withheld the plan from public and parliamentary scrutiny”.

His attack followed Labor’s recent criticism of another outsourcing contract, between Transfield and Homeswest, which has reportedly failed to deliver the promised savings.

The contentious Water Corp agreement was announced by Transfield on 20 December, but has not been announced by the government or its water utility.

In a brief statement to the ASX, Transfield said the Aroona Consortium - comprising Transfield, Suez Environment and Degremont - had been selected as the preferred tenderer for a production and treatment alliance with the Water Corp.

The Transfield statement said the consortium would deliver “operations, maintenance and asset management through an integrated alliance with the Water Corporation”.

The planned Transfield deal follows multiple alliance contracts between the Water Corp and private partners, for both capital works and maintenance.

Mr Logan said the government didn’t want anyone to know about the new alliance contract because its goes much further than existing maintenance work.

“The new contract, which starts in July 2012, will lead to the private sector controlling and running our critical water and sewerage plants.”

The proposed Aroona Consortium contract will replace a long-term maintenance contract curently held by international engineering company Wood Group PSN.

Water minister Bill Marmion said Labor's claims were a beat up, and noted that the contract has not yet been awarded.

"This is nothing new," Mr Marmion said. "This alliance is an improvement of arrangements that have been in place since 1996. It covers a broader range of services - asset management, operations and maintenance - to provide a more efficient result."

Mr Logan called for more transparency on the proposed alliance.

“No information has been supplied on the cost to the taxpayer, savings that might be made from the contract or if a business case examining the track record of the preferred tenderer companies has been completed," he said.

“Mr Marmion is a serial offender when it comes to contracting out work to Transfield.

“When he was the Minister for Housing he signed a maintenance contract with Transfield for Homeswest homes claiming the new Alliance would save at least $20 million per year.

“These savings have not materialised and there has been a massive backlash by tenants on the standard and timing of work undertaken by Transfield.




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