ALLCONNEX TO INCREASE CHARGES

Written on the 12 April 2011

ALLCONNEX TO INCREASE CHARGES

GOLD Coast rate payers will have to fork out up to 15 per cent more for water following a closed meeting between re-seller Allconnex and Gold Coast City Council.

Allconexx increased charges by 2.6 per cent and the wastewater service charge by 2.5 per cent. Consumption charges will also rise with Gold Coast residential customers paying between 12.9 and 15 per cent more overall for their water and wastewater account in 2011/2012.

The average Gold Coast residential customer using 200 kilolitres per annum would pay around $4.00 a week more for water and wastewater. However the prices are not final and are to be finalised by 30 June.

Allconnex chairman John Dempsey says the charges are less than the consumer price index (CPI) for 2011-12. He says a quarter of the price rise was due to an increase in the cost of bulk water charged by the Queensland Government, one of the input costs driving the necessary price increase.

“Our price reflects the true cost of the moving and treating the water, provides a return for Gold Coast City Council, and allows us to build the infrastructure needed to cope with population growth,” says Dempsey.

Under the proposed pricing structure and the current Participation Agreement, the total amount to be paid to Gold Coast City Council for 2011-12 is around $110 million. This includes a dividend of more than $18 million. All distributions from Allconnex flow directly to participating Councils.

“Gold Coast City Council will determine where that can be best spent,” says Dempsey.

Allconnex says business customers are in line with those of residential customers and it will undertake further analysis and meetings with some businesses prior to finalising prices by 30 June 2011.

Allconnex CEO Kim Wood (pictured) says the increases would help pay for more than $700 million of investment over the next five years in Gold Coast water and wastewater infrastructure to cater for expected growth.

However the total necessary infrastructure spend has been slashed by almost $400 million by achieving ‘greater efficiencies’ across Allconnex’s Logan, Redland and Gold Coast regions.

“We have been able to save over $16 million in interest this year and forecast total interest savings in excess of $33 million by next year and continued savings into the future,” he says.

Upgrades are planned for the existing wastewater treatment plant at Coombabah to increase capacity by 22 per cent and the wastewater network and operations in the Merrimac West catchment including works in Nerang, Carrara and Merrimac.

This is part of a combined investment of more than $1 billion over the next five years across the Logan, Redland and Gold Coast to expand and improve water and wastewater networks.

Wood says Allconnex was charged with the ‘difficult task’ of providing vital services now, as well coping with rapid population growth and preparing for the needs of future generations.

“We are a first world country and a basic expectation is safe, reliable clean water, and clean beaches and waterways, particularly as the region is experiencing enormous population growth of approximately 20,000 extra people each year,” he says.

“While we need to spend money on infrastructure to ensure our customers continue to enjoy this service, we also need to be mindful of running an efficient utility.”

Allconnex says it will continue its focus on stringent financial efficiency to meet the loan requirements of the Queensland Treasury Corporation that are also a significant cost to running the business.

The Queensland Competition Authority currently monitors water prices and will regulate pricing from July 1 2013.

Today’s decision follows the three shareholding councils of the Gold Coast, Logan and Redland saying no to a previously indicated 23 per cent rise.


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