Water Industry Competition

Creating a dynamic water industry

Meeting the challenge of securing the water supply of greater Sydney and NSW in the long-term and in drought requires the innovation, resources and cooperation of both the Government and the private sector.

New South Wales has introduced increased competition to the water industry of greater Sydney and NSW to do this, as key actions in the NSW Government's Metropolitan Water Plan and State Plan.

The Water Industry Competition Act 2006 and the Regulations supporting its implementation (the Water Industry Competition (General) Regulation 2008 and the Water Industry Competition (Access to Infrastructure Services) Regulation 2007) commenced on 8 August 2008. The objectives of the Act and supporting Regulations are to encourage competition in the water industry and to foster innovative recycling projects and dynamic efficiency in the provision of water and wastewater services.

The core reforms introduced by the Act are:

• the establishment of a new licensing regime for private sector providers of reticulated drinking water, recycled water and sewerage services
• provisions to authorise IPART to arbitrate certain sewer mining disputes
• the establishment of a third-party access regime for water and sewerage infrastructure.

Key aspects of General Regulation include:

• ensuring new entrants and the public water utilities face similar obligations, where like services are provided
• strict licensing rules to ensure that drinking water meets Australian standards, that recycled water is 'fit for purpose' and that all services are delivered in a safe, reliable manner with minimal environmental impacts
• provisions to prevent retailers from disconnecting small customers for non-payment of debt and to require the implementation of NSW Government social policies, such as pensioner rebates.

Background information

In November 2006, the Water Industry Competition Act 2006 (the Act) was passed by the NSW Parliament.  The Act was developed by the NSW Government as part of its Metropolitan Water Plan to encourage competition in the water industry and to promote the development of infrastructure for the production and reticulation of recycled water.

Regulations concerning the access regime established under Part 3 of the Act were the subject of a separate public consultation process. These were gazetted in December 2007. Go to NSW Legislation to view these Regulations.

A consultation paper on the General Regulation was released in June 2007. The draft Water Industry Competition (General) Regulation 2008 (PDF 704 KB) and associated Regulatory Impact Statement (PDF 553 KB) were released for public consultation in April 2008. You can view the submissions received in response to the draft Regulation. You can also view the Better Regulation Statement (PDF 265 KB) demonstrating the Regulation's compliance with the principles of better regulation.

These are significant micro-economic reforms by the NSW Government. Implementation of these new rules will inject greater competition and innovation into the metropolitan water and wastewater industries, starting with the greater Sydney and Hunter regions, and maximise the opportunities for water recycling projects.

These reforms have been subject to extensive community consultation, including the release of a number of discussion papers, stakeholder briefings and a public investigation conducted by the Independent Pricing and Regulatory Tribunal (IPART).

The Consultation paper: Creating a dynamic and competitive metropolitan water industry (PDF 386 KB) and the Regulations Consultation Paper (PDF 359 KB) have more information.