Background to reforms

The key elements of the Queensland Government’s reform process included:

• the construction of the $7 billion SEQ Water Grid, establishing interconnection of key supply and demand zones in South East Queensland (SEQ) and significant climate resilient sources of supply including desalination and purified recycled water
• the structural consolidation of the fragmented water supply industry in SEQ, which prior to the reform process included 25 different water entities, including 17 different council water retailer businesses.
• significant regulatory reform intended to provide more transparent and effective frameworks for:
  • economic regulation and pricing to incentivise efficient demand outcomes
  • planning and development regulation promoting economic efficiency and total water cycle management from regional to local scales
  • asset management regulation promoting active, whole-of-life asset management
  • SEQ Water Grid market rules.

The reforms are based on the principle that water is a shared regional resource and those who benefit from the arrangements and new infrastructure should share the costs. For the first time, the changes coordinated management of water as a regional resource. Moving water where it is needed was difficult during the millenium drought because of the many service providers across local council boundaries. There were also opportunities to better optimise sewerage and water supply infrastructure planning at a regional scale without the constraint of individual council boundaries.

The first stage of the reform process was the restructure of the bulk water supply sector including the establishment from 1 July 2008 of the new bulk water entities: Seqwater, Linkwater, Water Secure (which later merged with Seqwater in 2011) and the not-for-profit SEQ Water Grid Manager.

The second stage of the reform agenda involved the establishment of three combined distribution/retail entities for the SEQ region. These entities are owned collectively by SEQ councils, but operate as a stand-alone business separate from those councils. They sell and deliver water to customers, collect sewage and deliver it to treatment plants, treat and dispose of the sewage, and purchase treated water from the Water Grid Manager. These entities have been operational since 1 July 2010.