Water Industry (Third Party Access) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 11 February 2015.)

The Hon. G.A. KANDELAARS (15:28): I rise to indicate my support for this bill. This bill is an important step in the water industry reform that this government has progressed since the release of the state's water security plan, Water for Good, in 2009. This government has been committed to the reform of the water industry to encourage the development of a more mature market with greater competition. It was with that in mind that the government brought to this place the Water Industry Bill, which sought to create a level playing field for water businesses and was passed in 2012.

This bill now before us is the next stage in the government's reform. It seeks to amend the Water Industry Act to establish a regime allowing third party access to water infrastructure. The access regime will initially adopt a light-handed approach to suit the stage of development of the water industry. Under a light-handed approach, the parties to an access request are required to negotiate in good faith, but the regulator does not directly interfere in access negotiations. This approach provides for binding arbitration if negotiations break down.

There are mechanisms built into the regime so that, over time, as the water industry develops and demand for access grows, the regime can be reviewed and adjusted. A regulator will be appointed for the access regime and will have a monitoring role making recommendations to the Minister for Water and the River Murray for review or changes to the regime based on access behaviour and outcomes.

The proposed access regime would be fully applied to SA Water's bulk water transport services and partially applied to SA Water's distribution network, bulk sewerage and local sewerage networks, the Virginia pipeline services and the Willunga pipeline services. While access seekers and infrastructure operators are not limited from negotiating commercial arrangements outside the provisions of the access regime, the regime will provide for clarity and transparency to access seekers from the beginning of the negotiation process.

The infrastructure operators would be required to provide basic information such as terms and conditions, application procedures, and contract details to any persons within 30 days. The infrastructure operator would then be required to report to ESCOSA on these requests for information about access to its services. Importantly, where agreement cannot be reached on the access regime, it confers the rights and obligations regarding access.

The bill provides for a process for conciliation of disputes by the regulator and an arbitration framework if conciliation does not succeed. The bill does not seek to alter existing frameworks for public health, safety and environment. The arbitrator cannot make an award that would be inconsistent with the relevant legislation. This requirement applies equally to ESCOSA in resolving disputes.

It is notable that the access regime will be reviewed by ESCOSA by 30 June 2019 and every five years thereafter. The access regime is an important first step in third-party access, but there is scope to grow the regime in future, should it be appropriate. This work on third-party access and the implementation of access arrangements is another key step towards an efficient and dynamic water industry for South Australia. I commend this bill to the chamber.

Debate adjourned on motion of Hon. J.M.A. Lensink.