ACTEW is wholly owned by the Australian Capital Territory Government and acts as a holding company that directly and indirectly supplies services to the Australian Capital Territory and partly to the region. As a holding company ACTEW has limited resources and requires external parties to deliver gas, electricity and water and wastewater services.
In 2000 a joint venture was developed between ACTEW and a private business Australian Gas Light Company (AGL) to form ActewAGL. This joint venture is an equal partnership between both partners and provides a range of services in the energy sector and also includes the provision of water and wastewater services to the Australian Capital Territory and the region.
The joint venture for operating and maintaining the water supply and wastewater network was previously arranged under a Contactor Alliance Agreement with ACTEW. This agreement placed the majority of risk for the water business and funding on ACTEW. A new Utilities Management Agreement replaced this previous agreement and this redistributed the risk and rewards between both parties. Under this new agreement ACTEW remains the regulated entity and continues to own and invest in the network and hold key operating licences. ACTEW also continues to own the water and wastewater customer relationship and receive regulated revenue from the business. ActewAGL manages, operates and maintains the water and wastewater business according to a schedule of services which include capital works and major maintenance programs (ActewAGL 2005 p.12).
The water business managed by this joint venture consists of two separate operations, water and wastewater services. The water operations involve:
• retailing and distribution of water including billing
• sales, planning, design and maintenance of the network which reticulates water from water treatment plants to customers, and
• the collection and treatment of bulk water supplies.
The wastewater operations involve:
• the management of billing and sales
• the planning, design and maintenance of the network which reticulates sewage from customer installations to sewage treatment plants, and
• the treatment of sewage, grease and oil disposals, to the required standards.
The business functions and operational activities of ActewAGL are governed by the Australian Capital Territory, New South Wales or Commonwealth legislative or regulatory requirements and water pricing and charging is under the control of the Independent Competition and Regulatory Commission and/or IPART.
Q6: | What are the pros and cons of using PPPs as a way of involving the private sector? |