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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2011-03-23 Daily Xml
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Ministerial Statement

SA WATER

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Employment, Training and Further Education) (14:37): I seek leave to make a ministerial statement.

Leave granted.

The Hon. J.J. SNELLING: In December 1995, SA Water entered into a contract with United Water by which the management, operation and maintenance of Adelaide's water and waste water systems were outsourced to United Water. The term of the contract expires on 30 June this year. The prices for the services from 1996 to 2001 were specified in the contract. The contract contains a mechanism for the fixing of prices for two subsequent periods: from 1 July 2001 to 30 June 2006 and from 1 July 2006 to 30 June 2011.

In about 2001, SA Water and United Water agreed the prices to be paid by SA Water to United Water for the period 2001 to 2006. In and after 2006, SA Water and United Water attempted to agree prices to be paid by SA Water to United Water for the period 2006 to 2011. SA Water and United Water were not able to reach agreement in relation to those prices.

In 2009, SA Water issued proceedings in the Supreme Court against United Water alleging misleading and deceptive conduct and breach of contract in relation to the agreement between them as to the prices to be paid by SA Water for the period 2001 to 2006. In March 2010, SA Water and United Water agreed to resolve the pricing dispute between them by referring to independent experts the question of pricing both for the period 2001 to 2006 and for the period 2006 to 2011.

The independent experts' role was to establish the prices payable under the contract in two consecutive expert determinations. The first expert determination process, which determined the prices payable for the period of 2001 to 2006, was completed on the 18 February 2011. On 21 March this year, in accordance with the experts' determination, United Water paid to SA Water the sum of $14.061 million, including interest, to 21 March 2011.

Both United Water and SA Water have reserved their rights in relation to the payment and the outcome of the first expert determination. The second expert determination, to determine the prices payable for the period from 2006 to 2011, has now commenced. SA Water is hopeful that the second expert determination will be delivered in September 2011.

Members interjecting:

The SPEAKER: Order!

Members interjecting:

The SPEAKER: Order! There will be order in the house.

Mr Williams interjecting:

The SPEAKER: Order, member for MacKillop!

The Hon. K.O. Foley interjecting:

The SPEAKER: Order, former treasurer!

Members interjecting:

The SPEAKER: Order! Members on my right also will be quiet.

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