High Asset

Administrator rules out sale of water and waste assets


Administrator Rik Hart has promised ratepayers Central Coast Council will not sell its two major assets for a purely temporary gain to get around a rate rise.

Mr Hart said calls by politicians to sell Council’s Water and Sewer Authority were shortsighted and political.

Suggestions made by suspended councillors to sell Buttonderry Waste Facility have also been rejected.

Hart said the tip has the potential to accept the Central Coast’s waste for 100 years and the only reason someone would buy it would be to fill it up more quickly and make more money out of it.

“If you sell to a private business, it would use the tip’s proximity to the freeway and the rail system to truck in waste from other areas and they would fill it up quickly and make a profit that way,” Hart said.

The Council’s General Fund owns the tip so the Council makes money from that.

Hart said it tipped in approximately $8M per annum to general revenue.

He said both assets brought dividends to the Council that could not be replaced.

The book value of the water and sewerage authority is $3.7B and he said no-one would ever pay full price for the assets.

“Currently water and sewerage is losing money but it will return to profitability,” Hart said.

“The outlook is very, very good once we get charges increased.

“That is our pathway to full recovery for the water sewer business.

“According to the Central Coast Water Security Plan coming to Council in August we don’t have significantly high expenditure until about 2038, so we have 16 years before we need to spend more capital.”

Hart said MP Adam Crouch’s suggestion to sell the water and sewer authority where a likely sale price would be undoubtedly a lot less than the book value and probably in the order of $1B-$1.5B would, in effect, mean the Council would write off $2B of community assets.

“It’s like selling your house to pay the telephone bill,” Hart said.

“It is short sighted and political play.”

Neither Sydney Water nor Hunter Water have approached Council to acquire the asset.

Hart said the Hunter had significant infrastructure costs coming up soon and the Hunter had a water deficit while the Central Coast had a water surplus, so a sale did not make sense from a Central Coast point of view.

“We can’t sell to the private sector; that’s not an option under Government legislation,” he said.

The IPART decision in 2018 to reduce the water rates meant the water authority lost $38M in income.

The Council is working on a submission to regain a large portion of that money, but not the full amount.

The Council is also campaigning to maintain the residential rate increase of 15 per cent in line with the 10-year long term financial plan.

“Once restored, and if the special rate variation is not reduced after three years, we look in good shape,” Hart said.

Merilyn Vale


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