This paper offers a summary of the mechanisms governing access to water in NSW, including recent changes to policy and legislation.
Water Management Act 2000 (NSW)
Water access licencesLicences are granted to allow water access. These water access licences allow the owners to take a share of the available water in a river or an aquifer. They provide a clearly-defined right to access water, separate from land ownership. The licences specify the share of the water available at a particular source that the holders can take.
Water access licence certificatesA water access licence certificate is similar to a land title certificate. It is a certified copy of the licence information.
2004 Amendments: National Water InitiativeIn 2004 some amendments were made in order to implement the National Water Initiative. These included the creation of perpetual or open-ended water licences and provision for the term of water sharing plans to be extended beyond the initial ten years. Since July 2004 the new licensing and approvals system has been in effect in those areas of NSW covered by operational water sharing plans. (Water sharing plans establish environmental water provisions to protect water sources.) These areas cover most of the State's major regulated river systems.
IPART Report and New Open Access RegimeIn November, 2005, IPART issued a report, Investigation into Water and Wastewater Provision in the Greater Sydney Region. It recommended a blueprint for a state-based access regime for water and wastewater infrastructure and associated services. The NSW Government announced it would adopt IPART's recommendations in the Greater Sydney region.
Under the new open access regime, new entrants will be able to seek access:
- to water infrastructure to inject potable water and transport it through Sydney Water's water networks, in order to compete in retail water services for both residential and commercial customers; and
- to wastewater infrastructure to compete for the collection of wastewater (sewage) from both residential and commercial customers, transport it through Sydney Water's wastewater networks and withdraw it for treatment, disposal and recycling.
The proposed access regime will be:
- State-based, with IPART as the relevant access regulator,
- based on a negotiate-arbitrate model, and
- consistent with the Trade Practices Act and National Competition Policy.
Water Industry Competition Bill 2006 (NSW): Third Party AccessThe Water Industry Competition Bill 2006 opens water and sewerage access to third parties. The bill sets up a framework for private sector players to access water and wastewater infrastructure, giving them powers, protection and restrictions similar to those of public authorities. It encourages private sector innovation and investment in water and wastewater industries. IPART is given a significant role in regulating access.
This project will be delivered by the Transport Infrastructure Development Corporation (TIDC).
Licensing new entrantsPrivate sector players will be able to obtain a licence to supply water or sewerage services (a retail supplier's licence), or to construct, maintain or operate water industry infrastructure (a network operator's licence).
Gaining access to others' infrastructure servicesPrivate sector players will also be able to seek access to water and waste water infrastructure services under a new access regime.
The access regime in the bill is similar to that under the Trade Practices Act - it is based on the declaration/negotiate/arbitrate model and provides scope for access undertakings to be given by water industry infrastructure owners.
Owners of water industry infrastructure services may make access undertakings which set out how they will provide access to their infrastructure services.
If there is no access undertaking, access-seekers must first approach the owner; if they are unsuccessful, and the water industry infrastructure service in question meets certain criteria, access-seekers can ask the Minister to declare the infrastructure to be covered by the access regime.
The exceptions to this are connection and sewage conveyance services provided by means of Sydney Water's Bondi, Malabar and North Head sewerage networks, which will be declared from the outset. Services provided by those networks were declared under the National Access Regime provisions of the Trade Practices Act, as described below.
Once a service is declared, an access seeker will have a right to negotiate with the provider of that service, and if there is a dispute to apply to IPART for the dispute to be determined by arbitration.
A level playing field: powers and protectionLicensed network operators will have powers similar to those of public authorities. The new rights include access to land which grants rights to deal with interference by trees, to clear obstruction of mains, to alter positions of conduits and to read meters.
The access scheme is limited to greater Sydney and Newcastle, but could later be extended across more of the state.
Trade Practices Act (Cth): National Access Regime
Alternatively, third party access to nationally significant infrastructure can be obtained under the generic framework of s 44G of the Trade Practices Act.
In 2004 two applications were received under the generic framework. In December 2005 the Australian Competition Tribunal approved an application by granting access to Sydney Water's sewerage infrastructure to Services Sydney. This is the world's first private sector sewage collection service. Some have suggested that this is a forerunner of many similar applications.