Shared services plan to go ahead

A SHARED services model for the back office systems of Western Power, possibly run as a subsidiary to the networks division, seems almost certain if the power utility is disaggregated.

Business groups, which had initially been opposed to such a move, have now given it their support.

One of the big questions around Western Power’s proposed break up is what will happen to the human resources, payroll and logistics services that are currently provided by the utility’s corporate services?

One plan had been to have each arm – generation, retail, and networks – create their own systems to handle those services, however that option is considered to be too expensive.

Electricity Reform Implementation Unit executive director Steve Edwell confirmed the State Government was heading towards the shared services model for back office functions.

“We want to balance the benefits of competition, which requires the restructuring of Western Power against the needs of certain economies of scale. This leads us to some sort of shared services arrangement,” Mr Edwell said.

“That could be revolving around networks.”

It is understood one of the models being considered involves making the shared services a subsidiary of the proposed networks division.

Mr Edwell said attempts to set up individual back office systems for each different division in the lead up to a disaggregation, such as that considered for Western Power, were often doomed to failure.

The Government wanted to make sure the model chosen would “enhance the employment prospects for people in this area and preserve their conditions of employment”, he said.

Chamber of Commerce and Industry director industry policy, Bill Sashegyi, said the chamber had opposed the shared services model.

“The compelling argument to us shows that if you attempt to build the system for these organisations, they tend to need to be rebuilt later on,” he said.

“It’s really nonsensical to spend that amount of money.”