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Sydney Water’s dirty secret

By Jonathan J. Ariel - posted Friday, 27 September 2013

 “Sunlight is the best disinfectant”, asserted former U.S. Supreme Court Justice Louis D. Brandeis (1856-1941), when referring to the benefits of openness and transparency.

After all, as Wikileaks reminded us, transparency is the lifeblood of democracy. And Sydney, like every other major city, can sure use more transparency, especially in the all-too-opaque world of regulation of monopolies.

Government owned monopolies in particular.


On Wednesday, NSW Shadow Minster for Water, Walt Secord  (MLC, Labour), a former journalist, did the media’s job for them when he discovered that15% of the staff at Sydney Water have been shown the door since the Liberal/National Coalition swept to power in March 2011, after what seemed an epoch of economic maladministration and fetid corruption under Labor.

A total of 459 jobs were axed or outsourced from the 3,005 that held ”full time equivalents” when Premier Barry O’Farrell took the oath of office.

What Secord did not obtain and what has been flying under the media’s radar, is just how the water monopolist makes some of its money. It’s something most of us missed. I too almost missed it, but for two related incidents that got me thinking.

First, I was recently subjected to unjust charges when the monopolist billed me for a very, very simple plumbing job.

I booked a plumber through Sydney Water; was told a price; agreed to that price; the plumber came unprepared; he needed to scoot to a hardware store to buy the parts; he chose to go ignore my directive of driving to a store 5 mins away, and instead travelled 25 mins (each way) to another store; fleeced me two and a half times the price he paid for the goods and had the gall to charge me for travelling and shopping time! I kid you not.

Second, when I contested those outrageous charges and got nowhere with the monopolist’s staff - who are all uniformly honours graduates of the “talk to the hand” school of customer service - I wrote to the minister. And it was then that I learned something quite extraordinary: some charges the monopoly imposes on the public are unregulated and have no ceiling whatsoever. The plumber could literally have gone to any hardware store in the state and I would be liable for his travelling and shopping time. No ifs no buts.


A bit of background first.

Monopolies in vital areas such as utilities are considered “regulated” concerns. The Independent Pricing and Regulatory Tribunal, a NSW government funded but arms-length authority regulates thewater, gas, electricity and transport industries in the First State. Established in 1992 by Premier Nick Greiner, IPART regulates the maximum prices for monopoly services by government utilities and mass transit.

But it doesn’t regulate prices for all the products or services provided. And there’s the rub.

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About the Author

Jonathan J. Ariel is an economist and financial analyst. He holds a MBA from the Australian Graduate School of Management. He can be contacted at

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