The most substantial PPP arrangement in the Australian urban water sector was established by the South Australian Government in 1995. The main objectives in establishing this PPP was to introduce best-practice management, create cost savings and increase the growth and sales of the water sector through the development of a viable export of water related technologies and services.
A private consortium, United Water was awarded the contract to operate and maintain water and wastewater services, including treatment plants and the network (the arrangement with United Water closely resembles an 'affermage' lease see Table 3 p. 22). Under this PPP arrangement the government owned utility, SA Water, retains ownership and investment control of all assets and investment decisions for rehabilitation and renewal of infrastructure. United Water is responsible for developing and managing the capital works program, including design and project management, but the approval and funding for these works remains with SA Water. United Water is paid for its services through an annual lump sum to cover general management functions, reimbursable costs related primarily to maintenance and charges for design and project management services.
To meet its contractual responsibilities United Water is tasked with meeting 180 performance standards. These standards relate to water quality, quality of wastewater discharged, response times to network events, restoration of interrupted service and new connections. United Water has achieved a 99 per cent compliance with these standards although they are at a higher level than previously set for SA Water prior to the commencement of the contract (Laval 2004). Compliance with these standards has resulted in a consistently high level of customer service.